Streaming Providers Need To Merge
Liberty Media ( FWONA 0.00%↑ ) founder John Malone is one of the best operating executives of all time, but I disagree with him that “streaming is a crappy business”. As presently constructed streaming may be a crappy business. For example:
ESPN+ (Disney, DIS 0.00%↑ ) has no business charging $10.99 per month for its service (going to $11.99 on October 17th), nor do I understand how Disney can justify $13.99 per month for Disney+ (going to $15.99 on October 17th).
Max (Warner Bros Discovery, WBD 0.00%↑ ) has no business charging $16.99 per month ($20.99 per month for 4K).
Netflix ( NFLX 0.00%↑ ) is a rip-off at $15.49 per month.
The list of streaming providers goes on and on. It would be compelling if Disney and Warner Bros were to combine their full content bundle for a reasonable price. At present, none of the streaming services offer enough quality content to justify present price levels.
Further, if you are John Malone and have interests not only on the content side (Warner Bros Discovery), but also on the distribution side (Charter, CHTR 0.00%↑ ), you are doubly pissed off as your distribution business is not able to charge content providers for the right to use your Broadband pipes.
This is a function of Government regulation - Net Neutrality - whereby broadband and satellite providers are not allowed to charge for usage. This mean that the various content providers, social media companies, enterprise software companies - you name it - can ride for free on the backs of Charter, AT&T ( T 0.00%↑ ), Verizon ( VZ 0.00%↑ ), T-Mobile ( TMUS 0.00%↑ ), and other distributors. Net neutrality is the reason why distributors do not invest in true high speed Internet.
If you are a distributor, why make a large capital investment if the Federal Government says you may not charge for usage of your pipes?
Seems that the content providers will have to merge as we have advocating for almost a decade now. Only Apple ( AAPL 0.00%↑ ) Amazon ( AMZN 0.00%↑ ) and YouTube ( GOOGL 0.00%↑ ) are large enough to where they may subsidize their respective streaming businesses.
Repealing net neutrality laws is also the fair thing to do (getting Government out of the private sector is always the fair thing to do).
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