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ValueTheMarkets News Commentary - More than 3 billion people around the world streamed or downloadedvideo at least once a month in 2020 according to Statista, with thisprojected to rise to 3.5 billion by 2025. A number of companies areseeking to take advantage of this huge opportunity. This articlediscusses the issue with reference to Netflix (NASDAQ: NFLX) , Walt Disney Co (NYSE: DIS) , Amazon (NASDAQ: AMZN) and QYOUMedia (TSXV: QYOU) (OTCQB: QYOUF) .
QYOUMedia (TSXV: QYOU) (OTCQB: QYOUF) operates as a media company.The business produces and distributes content created by social mediainfluencers, artists and digital content creators on televisionnetworks, satellite television, over-the-top media and mobileplatforms.
QYOUMedia also manages influencer marketing campaigns for major filmstudios and key household brands.
The company primarily operates in India, where itaims to take advantage of rapidly increasing adoption of smartphoneand smart TV technology. The business has launched five entertainmentchannels aimed at the young Indian demographic through its The Q Indiabrand. These include its flagship channel, The Q, which was thefastest growing channel in the entire nation last year.
Viewers can watch thesechannels across a number of platforms, including QYOU Media’s freead-supported QPLAY app, which allows users to tune into the company’s fivedifferent TV channels through smartphones or smart TVs.
Now, the business isexpanding beyond video streaming too, having just acquired a controlling stake in mobile gaming specialistsMaxamtech Digital Ventures. With KPMG estimating that more than 420million Indians are online gamers, the business will be hoping thismove will spur further growth.
QYOUMedia’s Indian offering is growing alongside its revenue. Itsmost recent earnings update , which covered the three months ended 30 June2022, saw the company return record quarterly revenues of CA$6.9m,which represented year-on-year growth of 163%.
Adjusted EBITDA lossalso saw an improvement in the period, with a 33% reduction in loss.Net loss did widen by 7%, but the company attributed this to thelaunch of new channels and programming as the business rapidly expandsits entertainment footprint.
Netflix ( NASDAQ:NFLX ) operates as a subscription streaming service andproduction company. The company offers a wide variety of TV shows,movies, anime and documentaries on internet-connected devices. Itserves customers worldwide.
Netflix is a company synonymous with streaming,having revolutionized the way in which consumers consume entertainmentin their homes.
The company’s most recent quarterly earnings showed something of a return to form though,with paid subscriber numbers climbing by around 2.4 million after twoconsecutive quarterly declines.
Even so, the company appears to have been spookedby the decline and the rate of growth seen in the most recent quarteris still far slower than Netflix had become accustomed too. Thishardship has led the company to move towards some sort of ad-supported offering, while also seeking to block users frompassword sharing.
These moves will bolster existing revenue streams and add a newone as the business faces increasing pressure from competition. Newsubscribers could be attracted to the service by an upcoming cheaper$7 per month offering , which includes around five minutes of advertising perhour of programming.
However, the success of this significant change in thebusiness’ model is yet to be determined.
Walt Disney Co ( NYSE:DIS ) operates as an entertainment and media enterprisecompany. The company's business segments include media networks,parks and resorts, studio entertainment, consumer products andinteractive media. The business serves customers worldwide.
Another major player inthe streaming landscape, with its Disney+ offering reaching 221million subscribers in its most recent quarterly results to make Walt Disney Co the biggest streamer inthe world.
Theenormous growth of its streaming service has propelled major revenuegrowth for Walt Disney Co, with revenues climbing by an impressive 26%compared to the same quarter 12 months prior.
However, analystshave warned that the service could lose as many as 20 millionsubscribers in South Asia after it failed to secure the rights to theIndian Cricket Premier League.
Vivek Couto, executive director of Media PartnersAsia, told Bloomberg : “IPL drives customer acquisition.It’s regarded as entertainment not just sports by Indian households- women and men.”
Perhaps this is part of the reason behind Walt Disney Co’sdecision to follow some of its competitors in creating an ad-supported subscription offering, while also hiking the pricefor viewers who want to enjoy Disney+ without commercials.
Jeff Bezos’ Amazon( NASDAQ:AMZN ) is an online retailer that offers a wide range ofproducts. The company’s products include books, music, computers,electronics and numerous other products.
The business offers personalized shoppingservices, web-based credit card payment and direct shipping tocustomers. It also operates a cloud platform offering servicesglobally.
Havingmade a name for itself in the world of ecommerce, Amazon entered thevideo streaming fray all the way back in 2006. The service has grownsignificantly, with its popularity bolstered by the fact thatsubscription includes faster ecommerce delivery options, as well asebook, music and grocery shopping services.
But the company’sstreaming service appears to be building its own successful nichewithin this array of services, with Prime Video shows securing 30 Emmynominations during the company’s last full quarter .
Most recently, Amazon has been making entertainment newsheadlines with its Lord of the Rings prequel show The Ringsof Power . The fantasy series, which has been promoted through anenormous deluge of marketing, reportedly cost as much as $1bn to produce.
Millions initially tuned in to the show but reaction from audiences has been mixed, with some reviewerscomparing the show unfavorably with Peter Jackson’s film adaptationsof Tolkien’s Middle Earth world or fantasy TV peer House of theDragon .
Thiscould indicate that the show may not drive subscriber growth as muchas Amazon had been hoping.
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