Kris’ note: As you know, we believe that a once-in-a-generation change is happening in technology. And it’s all thanks to the rollout of 5G networks. Our own in-house expert, Dave Forest, has explained the full story here.
And while we’re on the subject of 5G, we came across the following excellent essay from Eoin Treacy. Eoin has been in the markets for 20 years. He has a unique take on trading and investing in the markets. He uses extensive technical analysis skills along with an ability to take big picture views of where the economy and industries are heading next.
In today’s guest essay, Eoin profiles one key industry that is set to benefit the most from 5G technology. Read on below…
By Eoin Treacy, co-editor, Market Minute
Do you remember what watching your favorite shows was like before Netflix came around?
You couldn’t binge watch anything unless you owned the whole DVD box set… And waiting for a new episode of your favorite show to air every week was painfully slow.
After all, customer service should be about giving people what they want, not making them wait for it.
Then, Netflix revolutionized entertainment…
They gave us everything on demand. We could watch what we wanted, when and where we wanted to.
But despite focusing on global market domination, most of Netflix’s programs are in English. That’s because the company sees its biggest opportunities in markets like India, where a sizeable number of people speak English.
Right now, the global streaming market is primarily focused on English speakers. But that’s changing.
Netflix has dabbled in Spanish too. Yet they’re still struggling to supply enough new material to satisfy the growing demand for Spanish-language programs across Latin America and the U.S.
That’s why the announcement of a merger between industry titans Televisa and Univision was so warmly welcomed by investors in April. Televisa produced 80,000 hours of programming last year. Most of that was in telenovelas, or Spanish-language soap operas. In comparison, Netflix created a mere 2,769 hours in 2019.
The sheer creative output of the Televisa team is breathtaking. The company’s stock has long suffered because they lacked a distribution network to maximize their production capacity. That’s where Univision comes in.
They have distribution channels in both the U.S. and Mexico. The plan is to create a streaming service aimed at the roughly 600 million people who speak Spanish as their primary language globally.
Streaming is rapidly becoming a truly global phenomenon and there’s a market for every major language. The market for telenovelas is about to get a big boost from the Televisa/Univision merger. At present, they don’t have a lot of competition… Univision is the largest Spanish-language content provider in the U.S.
And it’s not just the Spanish-language streaming market that’s growing… The Asian streaming market is going global too.
This Streaming Shakeup Equals Profits
Netflix first entered the Asian market in 2018 by partnering with South Korean streaming service LG U+. In China, tech conglomerate Tencent continues to open new partnerships with their streaming service, WeTV.
And in Japan, streaming service Rakuten hosts the largest soap opera service in the country via Viki.
Rakuten has also invested heavily in Mandarin subtitling as they actively export South Korean programs into the Chinese market. Mrs. Treacy is a big fan and I’ve even been roped into watching a few myself. The World of the Married was one of the best shows.
Despite growing competition for your attention each day, Netflix still remains the 800-pound gorilla in the streaming industry. It pioneered an entirely new business model that had never been seen before – radically changing the way we watch entertainment.
By shaking up the creation and distribution sectors, it’s killed off legacy businesses and encouraged competition. In the U.S., major content providers like Disney and HBO both have their own streaming services now. Internationally, competition is only just beginning to heat up.
So even though AMC is a favorite among some day traders right now, the company’s business model is seriously challenged by the growth of streaming services. Meanwhile, the companies focusing on streaming have the whole global market to compete for.
The Roundhill Streaming Services & Technology ETF (SUBZ) was launched in February to invest in this booming sector. It’s been easing back since inception, but the sector remains a high-growth candidate, and the fund is truly internationally focused.
Considering just how large the global streaming market is about to become, this looks like an attractive way to participate for investors looking to gain exposure.
All the best,
Co-Editor, Market Minute
Kris’ note: The global streaming market is set to explode… along with the rise in 5G wireless technology. And it could have an even bigger impact on the world.
As we’ve mentioned before, Dave is on top of this trend. He says it’s the single best investment opportunity investors will see this year. It’s hard to argue with that.
You can check out Dave’s research here.