As tech giants compete to win subscribers, which one are you going back to?

This is the year when Netflix, Disney+, Amazon and the other streaming services seem determined to show skeptical investors that there really is no business like show business.

According to the consulting firm Ampere Analysis, these giants will spend more than $230 billion on movies and other content by 2022, double their numbers a decade ago.

But the magnitude of this expenditure, which aims to attract more subscribers and generate much more revenue, is putting the industry in the spotlight at a time of increased scrutiny of all technology stocks.

Streaming, which gained a huge fan base during lockdowns, is becoming an increasingly competitive area.

Other names in the fray include Viacom CBS — owner of Paramount — and Warner Media, whose HBO Max gave us Succession, the family drama about the powerful media-owned Roy clan.

Warner Media is merging with Discovery this year to create yet another contender.

Particular focus is on the aspirations of Apple, which became, albeit briefly, a $3 trillion company earlier this month.

The group, whose Apple TV division has delivered shows like Ted Lasso, is somewhat of a co-star but could easily afford to spend billions more than its rivals in the streaming wars.

Shares in the market leader Netflix, creator of Bridgerton, Emily In Paris and many other hits, have recently fallen. Some enthusiasts see this as an opportunity to support a company whose stock has risen 5000 percent to $530 in a decade.

But given Apple’s ample finances, it makes sense to support Netflix, a $259 billion company.

It will have to deliver more hits, such as the surprising Squid Game 2021, and also make video games a success.

Squid Game, a Korean drama about a competition where competitors play deadly versions of a child’s game, could be a metaphor for the current state of the streaming industry, where survival will be difficult and more consolidation is very likely.

The market feels that the big gains are now made and future gains are hard to come by. Many agree with Michael Nathanson’s assessment of analysts Moffett Nathanson.

He says, “We think we’re on the cusp of an inflection in investor thinking. This is not an issue for the faint of heart, short-term people, or those constrained by non-essential concerns such as free cash flow or net debt.”

Investing in every aspect of entertainment is always an exciting ride. I have shares in Walt Disney and Netflix is ​​in some of the funds I own.

It is also in the portfolios of several well-known investment trusts such as Alliance, F&C, Polar Capital Technology and Witan, and is held by Monks and Scottish Mortgage, two trusts in the Baillie Gifford stable.

One of the challenges combatants in the streaming wars face is tighter oversight by US regulators of tech companies.

One deal that could be affected is Amazon’s $8.45 billion purchase of MGM, a deal struck to turn James Bond, the studio’s main asset, into a Marveltype franchise.

The kingdom of Walt Disney may include Marvel, Star Wars, Disney, Pixar and other franchises whose global appeal is supported by the resorts and theme parks.

Still, its shares have fallen 13 percent to $152 in the past 12 months, largely because Wall Street appears unsure whether Bob Chapek, who took over as CEO a year ago, has the superpowers to delay the Disney+ filings. .

This doubt has led Morgan Stanley to lower its price target for the stock from $210 to $185, raising the question, “Disney has the substance, can it execute?”

Goldman Sachs’ goal is $205. Netflix’s growth was also less spectacular after the 2020 pandemic wave, which added about 37 million new subscribers.

In next month’s annual results, it should announce it has 222 million worldwide, a respectable but not remarkable increase from 18.4 million.

There is already talk that the UK could be on ‘peak Netflix’.

Younger demographics have been gaining, but older generations are more resistant, suggesting that the 25-year-old company may be entering “the mature phase” in the sense that its early rapid expansion could be coming to an end.

David Coombs of Rathbones says households of all ages can cut their spending on subscriptions to these services as the cost of living rises, instead relying more on free services like those from the BBC and Channel 4.

In the coming months, there will be a lot of focus on subscriber numbers for all companies in the streaming business.

A drop will hit stock prices, providing an opportunity to buy if you have nerves of steel.

In the long run, the performance can be dazzling, but there will be many shocks and surprises along the way.

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