If Spark and Sky are worried that no one really makes money out of streaming, then it's best not to take a peak at Netflix's third-quarter results.
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The global streaming giant did book another profitable quarter for the three months to September 30.
Net income rose 65 per cent to US$665 million revenue rose 32 per cent (on the back of price hikes) to $5.25 billion as it added 6.77m paid subscribers for a total 158m members worldwide, putting it well ahead of its two closest rivals, Amazon Prime Video (around 96m) and the Disney-backed Hulu (around 30m).
But its long-term debt ballooned from the year-go US$10.4 billion to US$12.4b.
Netflix says its costs to buy, produce and license content will be around US$15 billion this year (around US$8billion of which will be on original content) from US$12 billion in 2018 and it will spend another US$2.9 billion on marketing. Hence its big deficit overall.
That means it outspends every other streaming service on the planet, and every TV broadcaster bar sports specialist ESPN.
Netflix ramped up its spending on original content because it anticipated, quite correctly, that content makers like Disney would at some point figure out there was no point in a middle-man in the age of broadband-delivery (hence as it launches its $9.99/month Disney+ streaming service next month in New Zealand, Disney will also be pulling its two Disney channels from Sky and its Marvel content from Netflix).
Similarly, NBC Universal recently said it would forgo its annual payment of US$90m ($134m) a year for licensing Friends to Netflix in favour of running it on its own streaming service from January 2021.
The "long-tail" of library content - much vaunted as Netflix's killer strategy when it launched streaming - is dead. Now, content is king - you've got to make your own, or control exclusive content. Not being able to compete in entertainment, Spark and Sky have decided to concentrate on sport.
More competition is coming over the hill.
Disney+ will be joined by the $8.99/month Apple TV+ (also launching in NZ) and HBO Max (which will initially be US-only).
"The launch of these new services will be noisy. There may be some modest headwind," Netflix said in its third-quarter letter to shareholders, issued on Friday.
That they will. Apple has spent some US$6b to build a library of content for its Apple TV+, and will be looking to get tens of millions onboard, pronto as it takes on incumbents from Netflix to Hulu to Amazon Prime Video.
And in the US, Disney is taking the hyper-aggressive approach of bundling Disney+, ESPN+ (in which it holds an 80 per cent stake) and Hulu (the Netflix competitor in which it holds a 50 per cent stake) for just US$12.99 per month - nullifying the traditional objection that it can be more expensive to subscribe to multiple streaming services than a traditional pay-TV provider.
It's a fight drenched in blood, or at least red ink. Disney will reportedly lose US$500m this year on Hulu, and some US$650m on ESPN+.
Some would call it a land-grab phase.
While still Sky chief executive, John Fellet said the low-pricing of streaming services represented a "mutual suicide pact."
Certainly, it will be a war of attribution as to who can endure losses the longest (or, for the likes of BT, Optus and Spark, who is the canniest in using streaming a loss-leader for broadband).
One interesting footnote: Netflix began as a DVD rental business, and although its disc-rental business is fast diminishing, it still contributes a meaningful amount to its bottom line.
For the three months to September 30, Netflix said it made a net profit of US$44m from its DVD business in the US (down the year-ago quarter's US$161m).
Some 2.3m Americans still belong to its DVDs-by-snail mail service. That's down from 2.8m this time last last year, but the old discs are still hanging in there and Netflix says its profit margin on the business line has remained steady at 50 per cent.
Sky closed its DVDs-by-mail service Fatso in late 2017.