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Netflix (NFLX), Disney (DIS): A Look at the Path to the Streaming Services Market

Netflix (NFLX), Disney (DIS): A Look at the Path to the Streaming Services Market

Power services enjoyed a boom during the COVID-19 pandemic and witnessed a normalization since then after easing restrictions and reopening economies. Despite the tough competition in the market and the struggle to retain the interest of viewers, streaming services are expected to see growth in the long term.

A report from PwC says that after an increase in 2020, over-the-top (OTT) video grew a further 22.8% in 2021, pushing revenue to $ 79.1 billion. It says that the pace of OTT revenue growth is expected to moderate, growing by 7.6% CAGR through 2026, when revenues will be $ 114.1 billion.

The report also says that traditional television, characterized by competition from OTT streaming services, will see global revenues shrink to -0.8% CAGR from $ 231 billion in 2021 to $ 222.1 billion in 2026.

Revenue and user growth

If we look at some of the major OTT players, Netflix (NASDAQ: NFLX) has always managed to increase its revenues consistently, but over the last few quarters, revenue growth has slowed. From 24.2% in the first quarter of 2021, it has decreased to 9.8% in the first quarter of 2022. For the second quarter of 2022, revenues are expected to grow by 9.7% to $ 8 billion. In the second quarter of 2021, revenues increased by 19.4%.

After increasing the number of subscribers in the last four quarters, Netflix lost 200,000 subscribers in the first quarter of 2022. The company attributed this loss to the suspension of the service in Russia. Excluding this impact, paid net premiums were reported to be 500,000. For the second quarter of 2022, Netflix has forecast a decline of 2 million subscribers due to slow acquisitions and typical seasonal variations.

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Disney (NYSE: DIS) reported revenue of $ 4.9 billion from the Direct-to-Consumer segment during the second quarter of 2022, which was up 23% year-over-year. The company added 9.2 million subscribers to its streaming services to end the quarter with 205 million subscriptions.

Disney + added 7.9 million subscribers in Q2 to end the period with nearly 138 million subscribers. The company is still on track to reach 230-260 million Disney + subscribers by FY2024.

For the first quarter of 2022, AT&T (NYSE: T) reported total global HBO Max and HBO subscribers of 76.8 million, up 12.8 million years.

Content investment and market expansion

Netflix has continued to invest in original content and its hit programs such as Bridgerton and Inventor Anna has contributed to drive commitment and growth. It also expects much of the growth to come from outside the US in the long run and continue to invest in producing regional content.

Disney’s vast body of content, especially the franchises of Marvel, Star Wars and Pixar, is its greatest strength. It gives the company many resources to utilize to create new content.

Disney has 500 local original titles in various stages of development and production, and the company believes these, along with branded content with wide international appeal, will attract new subscribers and drive engagement. By the end of the third quarter, the company plans to roll out Disney + to 53 new markets across Europe, Africa and West Asia.

The growing number of players in the electricity market has led to fierce competition, and against this backdrop, large electricity companies continue to make significant investments to attract new subscribers and engage. In the long run, these investments are likely to pay off and generate growth for the power companies.

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