While Hollywood opens its doors to streaming, Wall Street may soon award them as well.
Editor's Note
On March 27, local time in the United States, Apple's Apple TV+ became the first streaming service to win the Academy Award for Best Picture with the movie "Listening Girl". Just two years ago, the Oscars didn't take Hollywood's new business model seriously, requiring movies to be shown in theaters to be shortlisted. At a time when theaters are closing and more and more people are using streaming services due to the pandemic, a large number of films that are not shown in theaters and are watched at home by most audiences will be shortlisted in 2022. Warner Bros. Dune won six awards, making it the film with the most awards. Will Smith won best actor for his performance in King Richard, also produced by Warner Bros.
While Warner Bros., which won the seven awards, is a traditional media company, it still marks a triumph for streaming: All movies produced by Warner Bros. in 2021 premiere simultaneously on theaters and streaming service HBO Max. Disney's studios also won two awards in one fell swoop; Searchlight Pictures, which is wholly owned by Disney, won three awards; and Disney's streaming service Hulu won one. The most nominated Netflix eventually won an Oscar: Jane Campion won Best Director for "The Power of Dogs." There were four nominations for Amazon's Prime that didn't win.
Barron's latest cover story noted that while acceptance has been rising, the performance of streaming company stocks has not caught up. After a sharp rise in stock prices driven by a surge in user numbers during the pandemic, new challenges for streaming companies are emerging. However, the trend of viewers shifting from cable tv services to streaming services continues, and the development strategies developed by some streaming companies have also helped to gradually narrow losses and eventually achieve profitability. For investors, some streaming companies will be long-term winners to watch.
The 94th Academy Awards ceremony was held on March 27, local time in the United States, and this year a series of films that have never been shown in theaters have been shortlisted. Streaming giant Netflix (NFLX) received 27 Oscar nominations, more than any other film studio; AppleTV+ received 6 nominations and Amazon Studios received 3 nominations. In addition, films that premiered on both theater and streaming platforms by Disney (DIS) and Warner Bros have received multiple nominations.
Hollywood has opened its doors to streaming, but its original "patrons"—Wall Street investors 3,000 miles away from Hollywood—seem to have lost faith in them.
While Netflix's stock price has risen sharply during the pandemic, it has been sideways overall over the past three years. Over the past year, Netflix has underperformed not only the broader market, but also U.S. theater chain operators AMC and Cinemark Holdings (CNK). Disney shares, which operate Disney+, the second-largest streaming platform, have fallen 27 percent over the past year.
Netflix and Disney have given back almost all of the gains that have occurred during the pandemic
While receiving unanimous praise from the film industry, streaming media also faces some serious problems. With the exception of Netflix, other streaming outlets are not yet profitable, and the industry is still in the stage of preemptively seizing the market, with companies investing tens of billions of dollars in original series and movies, marketing and promotions to win subscribers. Goldman Sachs analysts estimate that the top ten streaming companies will invest about $130 billion in content in 2022, a 10 percent increase over last year.
Subscriber growth once drove Netflix and Disney's stock prices soar, but that alone is no longer enough.
Highlights:
1, investors are now more concerned about profitability than user growth, where is the difficulty for streaming media companies to make money?
2) What are the advantages that Netflix and Disney have that promise to be long-term winners?
3) At present, the valuations of Netflix and Disney are very low, how much room do analysts see as an upward trend?
4) Amazon and Apple's streaming business is growing, why hasn't it brought a significant boost to the stock price?
5. Discovery and AT&T's Warner Media may complete the merger in April, and the combined company Warner Bros. What are the prospects for Discovery? Is its stock worth buying?
6. Further integration may be a necessary condition for the success of streaming media, what M&A transactions will there be in this area?
7. What other companies in the streaming media field have unique strategies and are expected to achieve profitability?