My friends over at Alley Insider (I am an angel investor there) have a good read up on the death of TV. They are on top of their game at the moment. The site is cranking and the headlines and content are always inviting.
They have written hundreds of posts on the death of TV since 2010. I get it. They think TV is dying.
Jim Edwards, the author of most of these, is not a guy you want near your stock portfolio though.
In Jim’s defense, ‘Death’ is a better traffic term than ‘life’ or ‘birth’ unless it’s … ‘Silicon Valley Entrepreneur Gives Birth to 8 Children who Started Coding Immediately’.
I live with teens and I am deeply engaged in their media lives. I buy their digital toys, I send them email, texts, apps to try and I watch Netflix with them both every every evening. We engage in all this media on screens. Some TV, mostly an old Apple monitor. TV is just part of it all. There is no life, there is no death, just immersion.
Here is how a group of ‘television’ stocks have done since Jim and AlleyInsider began covering their death:
CBS.A data by YCharts
What stands out is netflix is winning. That makes sense.
TIVO, which was supposed to ‘kill’ television’ has always been the closest to death.
With respect to the rest….people die, television executives will always be assholes, but cash flow is life!
Netflix is almost in last place there… The supreme irony of your post (which I thought you were getting at, then failed to reach) is that traditional stocks (cable and content providers) have dominated the ‘new wave’ of NFLX. You should also throw $LGF on there for another content provider.
for the moment in last place…from the bottom where they switched models, they are in first place and growing in engagement and attention and brand. They are TV at this point for the under 20 generation. if we look a tt this chart in next three years it will probably look amazingly different.
I have covered Netflix extensively over the past 2 years with a few articles on Seeking Alpha and I beg to differ on the long-term. Netflix adds little value beyond the UI as the true power is in both monopoly infrastructure (cable– your CCast, Cox, TW, Verizon) and content production (DIS, LGF, HBO). NFLX is attempting to break into the latter, which is a brilliant business move, and they have had critical success (House of Cards namely), but by many accounts they are far overpaying.
Netflix has massive debts, mostly in the form of content obligations which makes their current enterprise value in the range of nearly $30B. The Icahn thesis for investing in NFLX is entirely wrong (content costs are rising faster than subscription revenues versus their claim of massive sub growth and ‘fixed’ content), and operating results continue to reflect this. However, the majority of analysts only care about subscriber counts, show developments, content deals, and viewing hours.
We are literally back into the late 90s of “clicks and eyeballs” with NFLX and I wouldn’t be surprised by a 2-3 year price of under $100, perhaps under $50.
I have been busy lately, but I will have an article out with the full model here in a week or so.
well you lose me at seekingalpha. sorry.
I have to agree on the immersion of TV and internet media on a broad spectrum. At Keplar Agency we are constantly searching how to connect old school with new media. We are trying to merge offline and online on a daily base and the developments are at the beginning what’s t come.
The TV-Share app we developed tracks the audio on a TV-program you are watching which it interprets much like Shazam recognises songs and melodies. Knowing what you’re watching the app tells you who in your social community is watching the same program, what inside info is available and which products are being displayed.
Sounds nice, but still just the beginning of what is awaiting within a digital revolution that has been going on for 20 years and is hyperbolising towards space!
We don’t own a traditional TV and don’t have a cable subscription but we subscribe to Netflix, use Hulu and buy season passes on the Apple store. Seems like the trend is for young people to just never get a cable subscription (unless they need to watch live sports) like we never got land lines.
TV as a way of broadcasting is in a secular decline, but good content has never been so valuable. Market is discounting the engagement (the content), not the platform.