Netflix and its competitors have entered the second major phase of the history of streaming wars

The media and sports business takes pleasure in managing the three elements of traditional history: planning, conflict, and decision making. The first act of streaming video has come to an end. Every major media and technology company that wants to be in the streaming game has raised a banner, blocking a surprise entrance. New streaming services such as Disney +, Apple TV +, Paramount +, Peacock, and others are gaining popularity around the world.

“The rule of thumb is land acquisition,” said Chris Marangi, media investor and portfolio manager at Gamco Investors. “Now we are in the middle.” Last month, the midterm battles of the infighting came to the fore. The company was plunged into turmoil after Netflix announced its first quarterly decline in subscribers in more than a decade and warned subscriber losses would continue in the near term.

Those reports set concerns about the future of streaming and cast doubt on whether a growing number of platforms could become profitable. Risk is the costs of the world’s largest media companies and entertainment companies – Disney, Comcast, Netflix and Warner Bros. Discovery – and the tens of billions of dollars spent each year on new original streaming content. As of October, Netflix, whose hit series “Strange” back on Friday, had a market cap of more than $ 300 billion, Disney’s highest at $ 290 billion. But its shares have fallen over 67% since the beginning of the year, reducing the company’s value to around $ 86 billion.

Disney shares are among the worst performing stocks on the Dow Jones industrial average this year, down by about 30%. That is despite the fact that series like “Book of Boba Fett” and “Moon Knight” helped Disney + gain 20 million subscribers in the last two quarters. The highly anticipated “Obi-Wan Kenobi” show premiered on Friday. Warner Bros. Discovery’s HBO and HBO Max services also added 12.8 million subscribers last year, bringing the total to 76.8 million worldwide. But the shares have been down more than 20% since the stock market started trading in April following the merger of WarnerMedia and Discovery.

No one knows whether the final action of the streaming will pave the way for a game or which players can dominate. Not so long ago, the formula for streaming success seemed straightforward: Include subscribers, see climb market prices. But the surprising return of Netflix has forced executives to reconsider their next transfers. “The pandemic created a buzz, with all these new subscribers becoming well at home, and now a bust,” said Michael Nathanson, a MoffettNathanson media analyst. “Now all these companies need to make a decision. Do you continue to pursue Netflix around the world, or do you stop the fight? ”

Efforts are not profitable yet, and losses are accumulating. Disney reported a loss of $ 887 million related to its streaming services in the last quarter – increasing on a loss of $ 290 million a year ago. Comcast estimates Peacock will lose $ 2.5 billion this year, after losing $ 1.7 billion in 2021. Media executives know it will take time for streaming to start making money. Disney estimates Disney +, its signature streaming service, will become profitable in 2024. Warner Bros. Discovery’s HBO Max, Paramount Global’s Paramount + and Comcast’s Peacock predict the same game time.

What has changed in Netflix’s pursuit does not appear to be a winning strategy because investors are happy with the idea. While Netflix said in the last quarter that growth will accelerate again in the second half of the year, a sharp fall in its share suggests investors no longer see the total market of streaming subscribers as high as 700 million to 1 billion homes, according to CFO Spencer Neumann has said. , but instead a figure close to Netflix’s total global total of 222 million.

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