down 10pct more since this was written. interested in any assessment you find on if great recession/depression imminent what that will do to prices and revenues and valuations too
That's a great question! I think the answer depends on many factors and is especially dependent on your view of streaming compared to cable. In my opinion, streaming has 2 advantages over cable. 1. Streaming apps are more scalable than cable networks, which means streaming can get more global subscribers than cable can. 2. Streaming allows more targeted ads, which means that ad revenues will be greater from streaming than cable. However, cable is more sticky than streaming. This is because streaming subscriptions can be cancelled with the press of a few buttons, whilst cable subscription is usually bundled with other services. Because of the above characteristics, streaming revenue is likely to be more volatile than revenues from cable tv. This means in a depression, revenues of streaming companies (especially ad revenue) are likely to fall more than revenues from cable networks. In this sense, DIS, WBD and PARA have an advantage.
Therefore, based on my perception of streaming vs cable business, I think that streaming companies in the future should trade at multiples at least equivalent to multiples of cable companies in the past. As such, I think that if we can buy these traditional media conglomerates that are transitioning to streaming at multiples lower than their average historical multiple when they were purely cable companies, it would be a relatively safe play. That is my thesis. My valuations on WBD will be out on the 7th of Oct!
Thanks
When will part 2 be ready?
It will be released in 3 days time!
Looking forward to the second half
Any time frame for that?
down 10pct more since this was written. interested in any assessment you find on if great recession/depression imminent what that will do to prices and revenues and valuations too
That's a great question! I think the answer depends on many factors and is especially dependent on your view of streaming compared to cable. In my opinion, streaming has 2 advantages over cable. 1. Streaming apps are more scalable than cable networks, which means streaming can get more global subscribers than cable can. 2. Streaming allows more targeted ads, which means that ad revenues will be greater from streaming than cable. However, cable is more sticky than streaming. This is because streaming subscriptions can be cancelled with the press of a few buttons, whilst cable subscription is usually bundled with other services. Because of the above characteristics, streaming revenue is likely to be more volatile than revenues from cable tv. This means in a depression, revenues of streaming companies (especially ad revenue) are likely to fall more than revenues from cable networks. In this sense, DIS, WBD and PARA have an advantage.
Therefore, based on my perception of streaming vs cable business, I think that streaming companies in the future should trade at multiples at least equivalent to multiples of cable companies in the past. As such, I think that if we can buy these traditional media conglomerates that are transitioning to streaming at multiples lower than their average historical multiple when they were purely cable companies, it would be a relatively safe play. That is my thesis. My valuations on WBD will be out on the 7th of Oct!
ditto!