Media firm Discovery (Nasdaq: DISCA) has seen its post-Christmas rally stall earlier than most other stocks.Past predictions on Discovery have been accurate 73% of the time.
With global paying customers increasing by 26% y-o-y to more than 139 million -- coupled with a forecast-beating addition of 8.84 million subscribers during the quarter -- there is little room for doubt that the streaming giant is an ongoing success.
Reasons for this booming number of subscribers?
Netflix is known for the abundance and quality of content, and since its inception, the company has worked hard to analyze and interpret viewers’ demand patterns.To reach this spot, the company used data from review aggregation sites like the Rotten Tomatoes to understand people’s choices, and now Netflix boasts of 596 ‘certified fresh’ movies that give its content a richness unmatched by other streaming sites.
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This brought total paid members by the end of the year to 139 million, up 26% on a y-o-y basis.
Out of the total 29 million new members Netflix added in 2018, 8.84 million joined during the company's fourth quarter.The company's decline in EPS came as Netflix's operating margin narrowed from 7.5% in the year-ago quarter to 5.2%, reflecting significant content investments during the quarter.
Further, the company added that its cash burn is expected to in 2019 and then likely to drop off in years ahead.
As for Netflix, this increase won’t be small: prices across all three of its streaming plans are now 13% to 18% higher for new users as of Wednesday morning.
Besides Netflix, Disney increased Disneyland ticket and pass prices by 7% to 10% last week.Earlier this month, AMC also boosted its monthly rates by 10% to 20% across some of the country’s most populous states.
But aren’t they afraid of losing customers because of increased subscription rates?
The answer is no.
Reason being, when you're the world's leading premium streaming service provider, theme park operator or multiplex ticket taker, you'll stretch your pricing elasticity to explore your customers’ limits.
Increased prices haven’t deterred Disney’s attendance levels through most of its gated parks.
The company projected a negative free cash flow of $3 billion in 2018, and has similar expectations for this year. Increase in subscription prices could potentially be a way to ease cash outflow pressures, especially as the company seems gung-ho on bulking up programming.
The company reported last quarter that it had more than 58 million subscribers in the US, and 137 million globally.Piper Jaffray's Michael Olson mentioned in a report last week that the streamer will add more subscribers in the U.S. than Wall Street analysts are expecting.
Netflix’s price hike and plans of beefing up content come at a time when competition looks to get hotter in the online streaming space.
Netflix, Hulu and Roku Inc. all recently declared strong subscriber and ad revenue growth in 2018 -- proving that streaming and digital media is not only here to stay, but also remains on a strong growth path.
Hulu, a joint venture with Walt Disney Co., Twenty-First Century Fox Inc., and Comcast Corporation, announced its largest annual increase in history in 2018: adding 8 million live TV and on-demand subscribers, putting it over the 25 million subscriber mark for the first time.The company also reported its ad revenue at just under $1.5 billion, up more than 45% over 2017.
Hulu’s announcement is followed by Roku’s, which reported that its fourth quarter active accounts went over 27 million -- up about 40% on a y-o-y basis -- and that its streaming hours were over 70% from the same quarter last year.
According to analysts, these reports underscore steaming digital viewing on the rise, which is also good news for advertisers.
Roku Inc. gains on people’s peaking streaming habit.
The digital media player maker reported its preliminary fourth-quarter data, revealing a +40% year-over-year surge in active accounts to top 27 million in the quarter.The number of streaming hours spent by viewers using Roku’s devices/services increased +68% year-over-year to 7.3 billion hours.
"Strong active account growth and accelerating streaming hours point to consumers' growing enthusiasm for streaming, making Roku America's largest and fastest growing TV streaming distribution platform," said Roku CEO Anthony Wood.
Roku shares jumped +20.6% on Monday.
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for 2018 “Black Panthers” grossed around $700 million, while "Avengers: Infinity War" and “Incredibles 2” raked in roughly $678 million and $608 million respectively in the U.S. (based on data from Box Office Mojo).Within that, Disney's "Avengers: Infinity War" and "Black Panther were the top two contributors.
In 2018, Disney announced one of its biggest acquisitions – that of the entertainment assets of 21st Century Fox for more than $71 billion.
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Netflix launched an interactive feature the allows viewers to choose how a story develops.
The streaming giant used an extended 90-minute episode of the British TV series "Black Mirror" to unveil the new technology on Friday.Viewers get to click on either "Yes" or "No" for the choices available.
This would be Netflix’s first major attempt at interactive storytelling – something that the company is probably hoping to bolster user engagement with, amidst the apparently heated competition in the online video streaming industry.
That would include overseeing deals with longtime collaborators Shonda Rhimes and Kenya Barris who created hit shows for ABC.
Dungey is joining Netflix at a time when competition among online video streamers seems to be heating up, with some traditional broadcast players also expanding their own digital content.Netflix announced last year of its plans to spend as much as $8 billion on content for 2018.
"Channing is a creative force whose taste and talent have earned her the admiration of her peers across the industry.
In a recent media release, Walt Disney Company (DIS) revealed that it chose Google Ad Manager as its new digital advertising handler for an undisclosed amount, after sidelining its previous handler, Comcast's FreeWheel.
Under this multiyear and multimillion-dollar deal, Disney is set to move all of its digital brands and properties worldwide — including Disney, ABC, ESPN, Freeform, Marvel, Pixar and Star Wars — to Google’s advertising platform.
With Google Ad Manager serving as DIS’s principal ad-technology platform, it will bring Disney’s entire global digital video and display business across multiple channels, including live streaming and direct-to-consumer content offerings, under one platform.
This consolidation should allow Disney to standardize its ad-technology under one global platform.It will also allow them to build a cutting-edge video experience and refine the way ads are stitched into live video, so that there’s a more seamless viewing experience
Walt Disney Co. and 21st Century Fox are being sued by Malaysia’s casino & hotel company Genting Malaysia Bhd for abandoning a Fox World theme park deal.The park was scheduled to open its gates next year, with Genting having invested around $750 million in the project.
Disney is in the process of acquiring Fox's entertainment assets. In the lawsuit filed on Monday, Genting indicates that it is Disney that apparently wants to distance itself from a gambling company in order to avoid risking its “family-friendly” brand image.
On Tuesday morning, 21st Century Fox is launching its new online video streaming platform called Fox Nation.
With a focus on entertainment and political opinion, the streaming service apparently promises to offer content in addition to what viewers get on its decades-old cable TV channel Fox News.
Fox Nation will have upto 30 hours of new programming per week, and will also stock archives of Fox’s radio programs.The streaming platform has also lined up live shows such as 'UN-PC' with hosts Britt McHenry and Tyrus, 'Liberty Files with Judge Napolitano', and 'Reality Check with David Webb'.
The launch of Fox Nation seems to be 21st Century Fox’s attempt at expanding its footprints in the rapidly growing online streaming industry.
The escalating trade war between China and the U.S. spurred concerns for the impending deal between Walt Disney and 21st Century Fox.
But with Chinese regulators finally approving Walt Disney's $71.3 billion acquisition of nearly all 21st Century Fox’s film and television assets, the most important hurdle for the blockbuster deal has been cleared.
With the news hitting the market, shares of Disney rose nearly 1% while shares of Fox rose 3%.
Although the deal still needs regulatory approval from several other nations, this unconditional Chinese approval is the biggest stepping stone towards successful execution of the deal amidst ongoing geopolitical tensions.
With the deal expected to be complete within the first half of 2019, it would transform the entertainment landscape as it gives Disney access to key film brands such as Avatar and X-Men, as well as some of the big TV hits such as “Atlanta,” “It’s Always Sunny in Philadelphia,” and “American Horror Story.” Furthermore, it wou
In the second quarter, Netflix reported lower-than-expected subscriber growth and took a share price hit almost immediately, as investors worried about the company's strategy and future.
But now, after a strong third-quarter earnings report, investor concerns took a back seat as it became evident that the company's 'original content' strategy was finally paying off.
The main concern for the company in Q2 was related to subscriber growth, which grew by only 5.15 million -- missing its own estimate of 6.2 million.But in Q3, this it was adequately addressed as the company added nearly 7.0 million subscribers against an estimate of 5.0 million.
Focusing on original content proved beneficial for Netflix, as it’s expected to help the company save big on licensing costs over the long term.
On Monday, Netflix announced that it will issue new debt of $2 billion.
As the online video-streaming giant continues to up the ante on content (up to $8 billion could be spent on content this year) amidst prolonged cash outflows, the company seems to be relying on even more debt to for its operations.This year’s interest costs (excluding those on the latest debt issue) has climbed to $291 million from $238 million of full year 2018.
However, Netflix chief financial officer David Wells tried to sprinkle some hope for investors during the third-quarter earnings call with analysts where he said, “Netflix is approaching a point where the growth in operating profit is going to grow faster than our growth in content cash spend, and that’s really going to drive the free cash flow towards improvement – it will eventually break even,” and added that he projects a “material improvement” in cash flow by 2020.