Are Streaming Video Stocks Making Promises They Can't Keep?
There's a two-act play serving as a recurring performance this earnings season when it comes to most streaming service stocks. Whether it's a stand-alone business or a segment within a media or tech giant, it's largely the same:
Losing money now makes sense. There are a lot of hungry players in this now-crowded market for your streaming attention. It's not cheap to crank out the kind of content that viewers will pay to watch. It also is expensive to stand out in this environment, so platforms trying to grow their audiences need to invest aggressively in marketing campaigns and promotional activity.
It makes sense in theory, but it shouldn't pass your sniff test. If they're almost all losing money now, they certainly won't all be rolling in the black sustainably in a year or two. There will be a shakeout. There will be failures. There will be crystal balls smashed to bits.
Source Fool.com
