I will try and keep this brief given that there are likely 10 auction “takes” in your inbox by now. Bottom line is that Verizon’s $50 billion “win” is not as robust as it appears and Cabletown’s C-Band goose egg might not be the end game for their wireless aspirations. There were no big surprises in the overall results. Yes, it’s true that Ergen is typically a wild card in everything that he enters, but given Dish’s existing depth of … Continue reading Our Take On The C-Band Spectrum Results
With Roku’s market cap north of $50 billion, investors are clearly looking at something well beyond 2020 platform revenues of $1.3 billion, which will likely grow to over $2.1 billion in 2021. In fact, near-to-intermediate term revenue, let alone profitability, appears completely beside the point to investors as there is not enough revenue or growth to justify current valuation. More Than a Connected TV Gatekeeper. Roku has clearly positioned itself as the “gatekeeper” to the connected TV ecosystem, as Liberty’s … Continue reading Is Roku Using a Trojan Horse to Devour the TV Ad Market?
In less than three years, Spotify has transformed from the world’s largest music platform to the world’s largest audio platform. Spotify held its one and only investor day in early 2018, just ahead of its direct listing as a public company, laying out a strategic vision that completely centered around music (our handbook and questions for that event can be found here, with #9 being non-music ambitions such as podcasting). On Monday, Spotify is hosting an event called Stream On, … Continue reading 6 Questions for Monday’s Spotify “Stream On” Event: OnlyFans, Clubhouse, TikTok & More
While we understand investor excitement over streaming subscriber growth, especially with Netflix at a ~$250 billion market cap generating positive free cash flow, along with the accelerating shift of advertising dollars to connected TV from linear TV (albeit, off a small base), legacy media stocks that have to balance old/new business models are unlikely to be the optimal long-term investments to create value from these two secular trends. Cord-Cutting Forcing Legacy Media to Lean Into Streaming There is no longer … Continue reading Legacy Media’s Leaky Bucket: When Will Investors Care?
Telesat will not become a public company until mid-year, but investors can buy Loral, which owns 63% of the company. Telesat will offer an opportunity to invest in a new LEO satellite constellation called Lightspeed that is targeting a different market than SpaceX’s higher profile Starlink project. Telesat is also uniquely positioned to benefit from the demand for deep C-Band spectrum needed to enable 5G in Canada. These new opportunities are backed by a declining, but free cash flow generating, … Continue reading The Back Door Into Lightspeed, A New LEO Constellation. Initiating Loral With Buy Rating
We have two main questions for Comcast today, neither of which relates to Q4 financial results: Is an Early Hulu Exit Coming in 2021?Why Keep Comcast/NBCU/Sky Together? Hulu Exit in 2021? Should we expect Comcast to exit its Hulu joint venture with Disney in 2021 as we predicted in our Top 21 for 21 (link)? The Hulu joint venture appears to have outlived its usefulness, with Comcast and Disney both increasingly focused on their own direct-to-consumer platforms. Hulu appears to … Continue reading The Two Most Critical Questions Comcast Needs to Answer
When WWE launched the WWE Network in 2014, direct-to-consumer was not in the vocabulary for most traditional media companies and content creators. The idea that WWE could circumvent MVPD gatekeepers to make more money by offering significantly more value to its audience was met with skepticism from investors and industry executives alike – never mind the concept of using first-party data and analytics to better serve and monetize its fanbase. It turned out WWE was ahead of its time. As … Continue reading Is WWE Ahead of Its Time Again as It Abandons Its DTC Effort?
The COVID-19 pandemic has fundamentally changed the way we live, work, interact and entertain ourselves. As we rapidly adapted to life at a physical distance, technology has replaced critical elements of the real world. Almost as soon as lockdowns began in March 2020, the video game ecosystem not only surged in engagement, but took attention away from other forms of media. It is not just that “gamers” have more time on their hands; established gamers and new players have sought … Continue reading YouTube is to Video as Roblox is to Gaming, with Music Having a Starring Role in Both
Ahead of Verizon’s Q4 2020 earnings call tomorrow morning we wanted to lay out nine questions investors should be asking management as we enter 2021. 1. What Is The 3-year Capital Budget? We expect Verizon to be the leading buyer of spectrum in the C-Band spectrum auction, adding 100 MHz to its existing 133 MHz sub-6 GHz spectrum position. We believe this could trigger a new multi-year capital investment cycle into Verizon’s macro tower network. However, it’s unclear if Verizon … Continue reading Nine Questions For Verizon’s Q4 Earnings Call Tomorrow Morning
After a dramatic surge in Netflix’s stock price in 1H 2020, shares have been effectively stuck at the ~$500 level over the past six months. The recent underperformance has largely been driven by fears of a COVID-19 pull-forward creating challenging comps for 2021 and rising concerns about intensifying streaming competition. While there is little doubt that the pandemic pulled forward sub growth, more importantly, it accelerated the industry shift to streaming television and movies – a meaningful positive for our … Continue reading Nine Questions for Netflix’s Q4 2020 Earnings Interview Tonight