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   Technology StocksNetflix (NFLX)


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From: Glenn Petersen10/9/2020 6:35:56 PM
   of 2018
 
Quibi is being shopped around.

Quibi approached Apple about a potential acquisition, but Eddy Cue wasn’t interested

Filipe Espósito
9to5 Mac
- Oct. 9th 2020 1:41 pm PT

Quibi was introduced earlier this year as a streaming platform with content targeted to be watched on mobile devices. While the platform slowly grows, a new report from The Information revealed that Quibi CEO Jeffrey Katzenberg is now looking for someone to buy his company, and he even tried to sell it to Apple.

Just like Apple TV+, Quibi focuses on exclusive content and original productions instead of offering a catalog with movies and TV shows from different studios and channels. While it’s hard to imagine Apple taking advantage of Quibi’s platform, the company could release its shows on Apple TV+.

The report mentions that Katzenberg has reached out to several tech and entertainment executives, including Eddy Cue — Apple’s Senior Vice President of Internet Services. However, Cue wasn’t interested in Quibi and the proposal was rejected by Apple. The streaming company also tried to negotiate with WarnerMedia and Facebook, but they all rejected the deal.

The stakes are high for Katzenberg, a veteran of Hollywood. Quibi was an ambitious idea: a service aimed at people on the go, airing episodes of everything from news programs to dramas with episodes of just a few minutes each. Major talent including Kevin Hart and Chrissy Teigen made shows for the service.

Katzenberg raised $1.75 billion to found Quibi, but the platform has struggled to become popular — mostly because it was designed for mobile devices rather than TVs. Quibi currently has 500,000 subscribers, which is far less than any other popular streaming platform.

In order to make the platform more attractive, Quibi was later updated with AirPlay integration and video screenshots in its iOS app, but that wasn’t enough to make it popular. As pointed out by The Information, the Quibi platform has nothing special to offer, so it will be difficult to sell it to another company.

Quibi is available in the US with a $4.99 monthly subscription with ads or $7.99 without ads.

9to5mac.com

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From: Glenn Petersen10/12/2020 4:42:39 PM
1 Recommendation   of 2018
 
Disney says its ‘primary focus’ for entertainment is streaming — announces a major reorg

PUBLISHED MON, OCT 12 20204:15 PM EDT
UPDATED 10 MIN AGO
Sarah Whitten @SARAHWHIT10
CNBC.com

KEY POINTS

-- Disney is restructuring its media and entertainment divisions.

-- In order to further accelerate it’s direct-to-consumer strategy, the company will be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+.

-- The change comes as the global coronavirus pandemic has crippled its theatrical business and ushered more customers towards its streaming options.

Disney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s business.

On Monday, the company revealed that in order to further accelerate its direct-to-consumer strategy, it would be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+.

Shares of the company jumped more than 5% during after hours trading.

The move by Disney comes as the global coronavirus pandemic has crippled its theatrical business and ushered more customers towards its streaming options. As of August, Disney has 100 million paid subscribers across its streaming offerings, more than half of which are subscribers to Disney+.

Only last week, activist investor Dan Loeb called on Chief Executive Officer Bob Chapek to end the company’s annual $3 billion dividend to divert more capital to new Disney+ content.

Loeb’s Third Point Capital is one of Disney’s largest shareholders and bought more shares earlier this year in support of Disney’s repositioning around Disney+, its flagship subscription streaming service.

As part of this reorganization, Disney has promoted Kareem Daniel, the former president of games and publishing within Disney’s consumer products division. He will now oversee the new media and entertainment distribution group.

He’ll be in charge of making sure streaming becomes profitable, as the company continues to invest heavily in its various streaming products. Daniels will hold the reins to all of the company’s streaming services and domestic television networks, including all content distribution, sales and advertising.

Disney is becoming more reliant on Disney+ as movie theaters have been unable to recover after being shuttered in March due to the outbreak. Ticket sales have been particularly lackluster at domestic cinemas since the industry attempted a large-scale reopening in late August.

In recent months, the company pushed back a number of its theatrical releases including Marvel blockbuster “Black Widow.” The much anticipated Pixar film “Soul” has also been postponed. It will now arrive on Disney+ in December.

Analysts are still awaiting word from Disney about how “Mulan” fared after Disney removed it from theatrical release and sold it through Disney+ for $30. It is expected the company will share more details about its performance during its next earnings report in November.

Daniel will be responsible, in part, for making big decisions about Disney’s theatrical and streaming release schedules going forward.

Reorganizing Disney’s media business

Alan Horn and Alan Bergman will remain in charge of the company’s studios, Peter Rice will continue to head the company’s general entertainment group and James Pitaro will stay as head of the company’s sports content.

All will report directly to CEO Bob Chapek. The company’s parks, experiences and products segment will remain under the leadership of Josh D’Amaro and Rebecca Campbell will remain on as the chairman of direct-to-consumer and international operations. Campbell will report directly to Chapek for all things related to international operations but will report to Daniel when it comes to Disney+, Hulu and ESPN+.

“Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” Chapek said in a statement announcing the reorganization. “Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it.”

Under Horn and Bergman, the studios segment will focus on creating content for theatrical release, Disney+ and Hulu. Walt Disney Studios, Marvel Studios, Pixar Animation Studios, Walt Disney Animation Studios, Lucasfilm, 20th Century Studios and Searchlight Pictures all fall under their perview.

Rice’s general entertainment segment includes 20th Television, ABC Signature and Touchstone Television, ABC News, Disney Channels, Freeform, FX and National Geographic.

As for Pitaro’s sports segment, that will focus on live sports programming, sports news and original and non-scripted sports-related content across ESPN, ESPN+ and ABC.

Daniel’s media and entertainment distribution group will manage all distribution, operations, sales and advertising across the three content groups. Daniel has spent 14 years at with company in a variety of positions. He helped transform Disney’s Star Wars property into the two Star Wars: Galaxy’s Edge lands in Disney World and Disneyland as well as aided in bringing Toy Story Land, Pixar Pier and Avengers Campus to the parks.

“Kareem is an exceptionally talented, innovative and forward-looking leader, with a strong track record for developing and implementing successful global content distribution and commercialization strategies,” said Chapek.

This new structure is effective immediately. The company currently expects to transition its financial reporting to reflect these changes beginning in the first quarter of fiscal 2021.

Additionally, Disney announced that it will hold a virtual investor day on Dec. 10.

— CNBC’s Julia Boorstin contributed to this report.

This story is developing. Check back for updates.

cnbc.com

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From: Glenn Petersen10/20/2020 3:50:24 PM
   of 2018
 
Netflix set to report third quarter 2020 earnings after the bell

PUBLISHED TUE, OCT 20 20203:31 PM EDT
Lauren Feiner @LAUREN_FEINER
CNBC.com

KEY POINTS

-- It’s the first report since longtime Chief Content Officer Ted Sarandos was promoted to co-CEO.

-- Netflix told shareholders last quarter that growth was beginning to slow again after an initial uptick when stay-at-home orders proliferated around the world.

Netflix is set to report earnings for its third quarter of 2020 after the bell on Tuesday.

Here are the key numbers:

Earnings per share (EPS): $2.14 expected, according to Refinitiv consensus estimate


Revenue: $6.38 billion expected, according to Refinitiv


Global paid net subscriber additions: 3.57 million expected, according to FactSet

It’s the first report since longtime Chief Content Officer Ted Sarandos was promoted to co-CEO alongside long-time CEO Reed Hastings.

Netflix told shareholders last quarter that growth was beginning to slow again after an initial uptick when stay-at-home orders proliferated around the world. Executives expect to feel the impact of postponed filming more in 2021, but still said last quarter that the total number of original programs that year would exceed that for 2020.

Netflix has tightened up its subscription practices in recent months. In May, the company said it would proactively cancel customers’ subscriptions if they hadn’t watched anything in a year and didn’t respond to outreach messages. This month, several outlets reported that Netflix had phased out its 30-day free trial offer as it experiments with new marketing tactics, like letting prospective customers watch a sampling of shows on their platforms or YouTube.

This story is developing. Check back for updates.

cnbc.com

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To: Glenn Petersen who wrote (1995)10/20/2020 4:21:14 PM
From: The Ox
   of 2018
 
At a glance, trailing EPS/Revs make the stock very pricey. With slowing growth, I think the stock is about 20% overvalued at $500/share. $420ish is more in line based on the current projections for 2021. Maybe a slightly higher multiple due to low interest rates but at $500/share - I think if you're a holder of the stock, it's time to consider taking profits...

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To: The Ox who wrote (1996)10/20/2020 4:59:17 PM
From: Glenn Petersen
   of 2018
 
No argument from me.

I think that NFLX has done a good job of managing expectations. They have not overhyped their pandemic advantage.

Netflix misses on subscriber additions and EPS

PUBLISHED TUE, OCT 20 20203:31 PM EDT
UPDATED 19 MIN AGO
Lauren Feiner @LAUREN_FEINER
CNBC.com

KEY POINTS

-- It’s the first report since longtime Chief Content Officer Ted Sarandos was promoted to co-CEO.

-- Netflix told shareholders last quarter that growth was beginning to slow again after an initial uptick when stay-at-home orders proliferated around the world.
Netflix reported earnings for its third quarter of 2020 after the bell on Tuesday. The company fell short of analyst estimates on earnings per share and global paid net subscriber additions, but exceeded expectations on revenue.

Shares fell as much as 6% during after hours trading.

Here are the key numbers:

Earnings per share (EPS): $1.74 vs $2.14 expected, according to Refinitiv consensus estimate


Revenue: $6.44 billion vs $6.38 billion expected, according to Refinitiv


Global paid net subscriber additions: 2.20 million vs. 3.57 million expected, according to FactSet



Netflix said in its letter to shareholders that the slowed subscriber growth was largely expected. In the same quarter last year, Netflix added 6.8 million subscribers, though this time it’s dealing with the fallout of a global pandemic.

The company attributed to slowed growth to its “record first half results.” The stock was considered a good buy early in the pandemic as stay at home orders left consumers looking for ways to fill their time.

For the fourth quarter, Netflix forecast 6.0 million paid net adds, still well below the 8.8 million it added in the fourth quarter of 2019.

“The state of the pandemic and its impact continues to make projections very uncertain, but as the world hopefully recovers in 2021, we would expect that our growth will revert back to levels similar to pre-COVID,” executives wrote in their letter to shareholders.

Subscribers in the Asia-Pacific region were the largest contributor to paid membership growth — a first for the company — accounting for 46% of all global paid net adds.

“We’re pleased with the progress we’re making in this region and, in particular, that we’ve achieved double digit penetration of broadband homes in both South Korea and Japan,” Netflix said in its letter.

It’s the first report since longtime Chief Content Officer Ted Sarandos was promoted to co-CEO alongside long-time CEO Reed Hastings.

Netflix said it still expects the number of Netflix originals it launches next year to still be up year over year each quarter despite delays to production due to global shutdowns. The company said it’s begun to restart production on some of its most popular titles, like “Stranger Things.”

The company’s free cash flow was positive for the third straight quarter, and is at positive $2.2 billion for the first nine months of 2020. It said it expects to be slightly negative on free cash flow in Q4 as production restarts. It expects free cash flow to be about $2 billion for the full year 2020, up from its previous break-even to positive estimate.

For 2021, Netflix said it expects free cash flow to be -$1 billion to break-even.

This story is developing. Check back for updates.

cnbc.com

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To: The Ox who wrote (1996)10/21/2020 1:09:27 PM
From: bobby is sleepless in seattle
   of 2018
 
would you pay 20/month for their services?

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To: bobby is sleepless in seattle who wrote (1998)10/21/2020 1:59:02 PM
From: The Ox
   of 2018
 
Our family has an account with NFLX. It's a decent product, especially for a family of 4 with different tastes. I don't believe we're paying that much but I don't pay that bill. With the various other streaming services we use, it's not required to keep but it's content is solid.

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To: Glenn Petersen who wrote (1997)10/23/2020 4:54:06 PM
From: Following-Mr.Pink
   of 2018
 
Agreed; I thought earnings were well-managed. It's unfortunate that the growth story couldn't continue to chug along but this is a LT hold for me.

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From: Glenn Petersen10/26/2020 6:59:41 AM
1 Recommendation   of 2018
 
Media executives are finally accepting the decline of cable TV as they plot a new path forward

PUBLISHED SAT, OCT 24 20209:00 AM EDT
UPDATED SUN, OCT 25 202011:08 AM EDT
Alex Sherman @SHERMAN4949
CNBC.com

KEY POINTS

-- At least three large U.S. media companies expect the number of U.S. households that subscribe to a traditional pay-TV bundle to fall to about 50 million in the next five years.

-- At 50 million subscribers, it’s unclear the current pay-TV model can survive without falling further.

-- The jury is still out on if streaming economics will convince investors to breath new life into traditional media companies.

There’s a quiet consensus emerging in the hallways and boardrooms of American media companies.

They expect about 25 million U.S. households to cancel their pay-TV subscriptions over the next five years. This is on top of the 25 million homes that have already cut the cord since 2012. At least three major media companies now expect pay-TV subscriptions to stabilize around 50 million, according to people familiar with the matter, who declined to speak on the record because their company plans are private.

The projected decline in subscribers will mean a drop of about $25 billion in cable subscription revenue plus associated advertising losses for the largest U.S. media companies, including Disney, Comcast’s NBCUniversal, AT&T’s WarnerMedia, ViacomCBS, Fox, Discovery, Sinclair and AMC Networks.

This assumption has created a tectonic shift in the media industry. In the last three months, Disney, NBCUniversal, WarnerMedia and ViacomCBS have all announced major reorganizations. They’ve replaced old leaders, consolidated divisions, laid off tens of thousands of employees, and pivoted to streaming video.

American viewers can now choose among streaming services from most of the major players, including Disney+, WarnerMedia’s HBO Max, NBCUniversal’s Peacock, ViacomCBS’s Paramount+, Discovery+ and AMC+, at prices ranging from free to $15 month. All have launched in the last year or are coming in early 2021.

The plan is simple enough: Hope enough people sign up for subscription streaming services to make up for cable TV subscriber losses.

Why streaming might not save U.S. media

In 2015, Time Warner CEO Jeff Bewkes sat down with his executive team to talk about the future of TNT and TBS, the two flagship Turner entertainment cable networks.

For more than a decade, TNT and TBS ratings had lived off re-runs of hit broadcast shows -- “Seinfeld,” “Friends,” “Family Guy,” “The Office” and so on. Now there was a problem. Netflix, Hulu and Amazon Prime Video had acquired digital rights to the same catalog of re-runs. Instead of having to tune into a cable network at a certain time, viewers could consume entire seasons of shows on demand without suffering through commercial interruptions.

“The streamers simply had superior capabilities,” said Bewkes in an interview. “The basic cable networks didn’t have full video-on-demand. We were reliant on advertising. It’s not that the streamers had superior programming, they had superior technology.”

A year later, Bewkes agreed to sell Time Warner to AT&T for more than $100 billion including debt. The following year, Rupert Murdoch pulled the rip cord, selling the majority of Fox’s assets for more than $70 billion to Comcast and Disney. Both men seemingly came to the same conclusion: The cable bundle had peaked. The longer they waited, the less their assets would be worth.

The cable bundle means that consumers can’t select and pay for cable TV channels a la carte. Instead, they have to buy dozens at a time. Media executives have long referred to it as the golden goose.

Media companies who sell channels into the bundle get paid whether or not anyone is watching. Don’t watch sports? You’re still paying $20 or $30 a month (depending where you live) for sports in a standard cable bundle. Don’t watch reality TV? You’re still paying for Bravo, E!, TLC, HGTV, and so on.

Better yet, every popular cable network has been nearly guaranteed distribution -- and payment -- because if an operator like Comcast decided it didn’t want to pay for ESPN, competitors such as Dish and AT&T’s DirecTV could steal its sports-hungry customers.

“Media companies have had a fabulous distribution system for decades,” said Tom Rutledge, CEO of Charter Communications, the second-largest U.S. cable company. “Every distributor had to carry their product, because if they didn’t carry networks, the competition would. In a direct-to-consumer world, the whole ecosystem is smaller. It doesn’t mean you can’t win, but there will be a lot of losers.”

Some streaming services already have enough library content to thrive in this smaller ecosystem of streaming services.

Disney+, with decades of kid-friendly movies and TV shows plus the Pixar, Star Wars and Marvel franchises, has already surpassed 60 million subscribers, hitting the low range of its 2024 goal in less than a year.

What about the smaller players? Can they compete for new originals against Netflix, Amazon and Apple -- companies with massive balance sheets -- to have the best content going forward?

“The answer is no,” said Bewkes. “These companies are competing against Netflix and Amazon, who have massively more scale for both subscription and advertising at a global level. They’re all going to be collapsed. Only Disney will have enough subscribers and global scale under a distinctive family brand to make it.”

Even Disney will need to keep growing those numbers to make up for impending cable TV losses. Each lost cable customer costs the company about $17.62 each month -- excluding advertising -- according to Kagan estimates. Most of that has to do with ESPN’s value, which commands about $10 per month per subscriber on its own.

Disney charges $6.99 per month for Disney+ and bundles ESPN+, Hulu and Disney+ together for $12.99 per month. And Disney+ doesn’t include advertisements.

At those prices, a one-for-one swap of a cable customer for a streaming customer will mean less money for Disney. This doesn’t even account for potential revenue loss from password sharing. While stealing cable TV is quite difficult, it’s a lot easier to share a password for a streaming service, and it’s more common among younger viewers. In 2019, research firm Magid estimated 35% of millennials share passwords for streaming services.

“It’s just too easy to get the product without paying for it,” said Rutledge.

Moreover, a vicious cycle is settling in that could accelerate cable bundle defections. Distributors like Comcast and Charter no longer care that much whether or not a customer buys traditional pay-TV. The price of a video bundle has gotten so high, there’s little margin for them -- especially compared to broadband internet service.

“You get to that point of financial indifference, then you’re seeing the EBITDA margins go in the right direction and continue to increase,” Comcast CEO Brian Roberts said last month at the Goldman Sachs Communacopia Conference. “That’s one of the big pivots of Comcast the last decade.”

So instead of threatening blackouts to lower rates, pay-TV operators are accepting rate hikes, passing them along to subscribers, and accepting the fact that price-sensitive customers will cancel TV and go to internet only.

Meanwhile, media companies are shifting their best content to their new streaming services. The result for consumers is higher and higher prices for lower and lower quality.

And certain networks, like ESPN, which keep millions of Americans hooked to cable today, may need to pull back on programming costs if too many people cancel. That will only cause more people to cancel. Stabilizing at 50 million (or 55-60 million, as AT&T CEO John Stankey said this week) may be a pipe dream.

“The only thing left holding the bundle together today is sports,” said former AOL CEO Jonathan Miller, who stepped down from the board of AMC Networks in July. “There is nothing any of the networks can do about it. The only question now is how far does it fall and how fast, and is there a bottom. And I don’t know if there’s a bottom.”

Then again: Why streaming might save U.S. media

The best path forward for media companies is if Americans suddenly decide to stop canceling cable. That cash flow can then be redirected to streaming services as the industry’s new global growth engine. There’s at least a chance a combination of live news and sports, combined with inertia and laziness, can keep a diminished bundle alive.

Charter actually added 102,000 pay-TV subscribers in the second quarter. But that’s almost certainly an anomaly. Comcast reported a net loss of 477,000 video subscribers (427,000 residential) last quarter. AT&T, which owns DirecTV, reported a net loss of 886,000 video subscribers in the same quarter.

Media companies could team up and decide to recreate the bundle model with their new streaming services. Unlike the cable bundle, a streaming bundle wouldn’t eliminate the “make your own” option, as each service can be purchased a la carte. But investors may not mind if companies take revenue discounts if it means growth.

It’s also possible that Wall Street will give a window to legacy media companies to let them spend billions on streaming content, giving them a greater chance of finding the next “must-see” shows. Activist investor Dan Loeb has already called on Disney to eliminate its annual dividend and use the cash on original content spend for streaming services.

“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote in an October letter to Disney CEO Bob Chapek. “These incremental dollars would, based on our analysis, generate returns that are multiples of the stock’s current dividend yield.”

Netflix has proved that market validation is more important than business fundamentals in terms of growing valuation. Netflix has burned through billions in cash for years, spending borrowed money on content to grab subscribers, and investors haven’t cared.

Maybe media companies won’t have to worry about how to replace revenue from each cable subscriber with a corresponding streaming subscriber. Perhaps simply showing there’s a new growth engine that looks more like Netflix will push investors toward valuing the entire industry higher.

Right now, the market doesn’t seem to think existing media companies are capable of this. Discovery’s enterprise value/EBITDA multiple is 3.5 (7.5 on a blended class share basis). AMC’s multiple is 2.3. Those are terminal values. The average S&P 500 company typically has a multiple between 11 and 15. Netflix is valued at 33.5.

But even if the market is right and media companies can’t stabilize revenues in the shift to streaming, that’s not a death knell. Profit and cash flow could conceivably rise as cable networks are folded and jobs are eliminated. Sometimes industries need a refresh, but it’s not necessarily a funeral.

There’s also the “Underpants Gnome” argument. In a 1998 episode of Comedy Central’s “South Park,” a group of gnomes steal people’s underpants. Their plan is: Phase 1: Collect Underpants, Phase 2: ? and Phase 3: Profit.

A lot will happen between now and 2025. New technologies emerge. Tastes and habits are fickle. Companies acquire other companies. CEOs change.

It’s hard to predict the future. Sometimes fighting to survive turns into actual survival.

The likely endgame

Cable networks continue to be profitable, and recent distribution deals ensure they’re not going anywhere.

Still, some companies probably won’t make it in a streaming world alone. They may need to merge to survive.

Billionaire media magnate John Malone has mused about the consolidation of networks for years, advocating putting together “free radicals” to merge assets. AMC’s “The Walking Dead” may not be enough to keep a streaming service viable, but if joined with Lionsgate’s “Mad Men,” MGM’s “James Bond,” and Discovery’s “Top Chef” and “Deadliest Catch,” such a service may have enough content to remain relevant for a while. Malone has a stake in Discovery and also owns some of Charter -- either of which could act as the vehicle to buy up cheap networks.

The problem is many of these companies may have missed their ideal window to sell. Disney executives looked at the media landscape after its deal for Fox and decided it had no interest in acquiring any existing traditional media company’s content, according to a person familiar with the matter. If a technology company or large media company such as AT&T or Comcast bought a smaller legacy media company today, the acquirer’s shares would likely plummet.

Instead, what’s likely to happen in the next five years is the systematic consolidation and elimination of cable networks. NBCUniversal and ViacomCBS are both considering shuttering networks, though nothing is imminent or particularly close given current distribution deals, according to two people familiar with the matter.

“Media companies can consider consolidating underperforming networks with core channels, hoping to extract additional carriage revenue from a beefier network,” said Kirby Grines, founder and CEO of 43Twenty, a consultancy and marketing firm that provides streaming video strategy advice. “Consumers have loyalty to content and perhaps the companies they transact with. I’m not sure where networks fit into that equation, but it’s somewhere in a meaningless middle.”

ViacomCBS has already identified CBS, MTV, Nickelodeon, Comedy Central, Smithsonian and BET as its tent-pole brands, which show up in the company’s CBS All Access streaming application (soon be renamed Paramount+). Other ViacomCBS networks -- VH1, Logo, PopTV, CMT -- are absent from the streaming platform. That may be a sign they’re at risk of eventual shutdown or rebrand.

Still, most media companies will try to perform a delicate dance, shifting most premium content to streaming while still giving some A-level shows to networks to buoy the bundle for as long as possible.

The forcing function on change will be Wall Street. If valuations keep declining, media companies will have to act.

LightShed’s Greenfield recommends a ripping-off-the-band-aid approach: Divest the networks now.

“Disney should divest its broadcast and cable networks, Comcast should divest the NBCUniversal cable networks, and there’s no reason why AT&T needs to own the Turner networks,” Greenfield said. “Cable networks are structurally broken.”

Divested and merged media companies will lead to more robust streaming services. This is why Disney agreed to buy Fox’s entertainment assets, including “The Simpsons” and movies such as “The Shape of Water” and “Avatar.”

But it may also accelerate the death of cable TV.

“The total bundle is going to shrink,” said Bewkes. “Whether it disappears, I don’t know.”

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

cnbc.com

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From: Glenn Petersen10/29/2020 6:05:02 PM
1 Recommendation   of 2018
 
Netflix raises prices on standard and premium plans

PUBLISHED THU, OCT 29 20203:10 PM EDT
UPDATED 20 MIN AGO
Todd Haselton @ROBOTODD
CNBC.com

KEY POINTS

-- Shares of Netflix were up nearly 4% on the price change before settling later in the evening.

-- Netflix on Thursday raised the prices of its standard and premium plans to $13.99 and $17.99 per month, respectively.

-- The entry-level basic plan remains at $8.99 per month, the same price that was introduced last year.

Netflix on Thursday raised the prices of its standard and premium plans to $13.99 and $17.99 per month, respectively. Prior to Thursday, those plans were priced at $12.99 and $15.99, respectively.

Current Netflix customers will see the updated prices on their bill over the next two months, Netflix told CNBC. Customers will get a warning 30 days prior to the change.

The entry-level basic plan remains at $8.99 per month, the same price that was introduced last year. It’s the first increase since Netflix boosted the cost of its service in January 2019. Prior to then, the basic, standard and premium plans were available for $8, $11 and $14, respectively.

On the company’s latest earnings call, chief operating officer Greg Peters hinted that a price increase might be coming. He said if Netflix continues to do a great job investing in original content to deliver more value for users, then Netflix feels like “there is that opportunity to occasionally go back and then ask for members, where we’ve delivered that extra value in those countries, to pay a little bit more.”

Netflix’s standard plan offers up to 1080p quality and allows people to watch on two screens at the same time. Its premium plan includes support for sharper 4K resolutions and HDR and up to 4 screens at the same time. The basic plan supports 480p, about the quality of a DVD.

Shares of Netflix were up more than 4% on the price change before settling later in the evening. Disney shares were also up more than 3% in late trading, building on gains earlier in the day.

cnbc.com

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