Over the past decade or so we have witnessed a significant transformation in the methods of content delivery. We have shifted from traditional linear broadcasting to the prevalence of streaming platforms (think Netflix).
The initial stage of streaming was characterized by its flexibility, allowing content consumption across a wide range of devices, and presenting consumers with an enticing dollar value proposition. Nonetheless, the cost associated with streaming has consistently risen beyond the initial “no brainer” price thresholds.
This upward trajectory in pricing aligns with the analysis of the financials of streaming companies, which have been marked by substantial cash outflows.
This serves as a reminder that the dynamics within the industry, particularly thinking about pricing power is an important aspect of equity analysis. So far we are seeing pricing power take fold.
Twitter: @_SeanDavid
The author or his firm may have positions in the mentioned companies and underlying securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
