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Commentary: Could Netflix’s decline end up as Sony’s gain?


The success of Netflix, in the meantime, has emboldened extra content material suppliers to arrange their very own streaming providers, ravenous Netflix of out of doors content material and in mixture, beating Netflix of their vary of exhibits. That vary will grow to be even larger now that COVID-era manufacturing constraints are ending.

CONTENT IS MORE VALUABLE THAN THE PLATFORM

For believers within the Sony technique, the Netflix incident is encouraging. If we’re certainly getting into a part during which cost-conscious households begin rationalising their streaming providers, then massive unattached content material suppliers comparable to Sony carry extra weight. 

The music business, says Jefferies analyst Atul Goyal, is the mannequin right here: Sony, Warner and Common Music had been at all times extra beneficial than Spotify, and this Netflix episode ought to clarify to traders that content material is extra beneficial than the platform.

Others disagree, nevertheless. Netflix’s forecast of a subscriber contraction may cement the parameters of the whole video streaming market of their present place, making a far uglier battle for market share and, doubtlessly, the scope for consolidation. 

If Netflix’s shareholders contract its finances for getting and financing exhibits, squeezing content material suppliers, this might present a headwind for the Sony mannequin.

But that’s much less seemingly if the sport stays one in all beating all-comers. Earlier than consolidation units in, overcapacity is primarily an issue for the streaming providers: As a significant producer of movies and TV, Sony’s arms supplier mannequin works very properly. As soon as consolidation begins, nevertheless, the facility shifts decisively to the winners and Sony turns into the traditional price-taker.



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