General Description

The CMC Markets Streaming Share Basket tracks the performance of an initial 10 shares with exposure to the streaming industry chosen by the Share Basket Review Panel.

The Share Basket was created with a base level of 4,000 as of 31 December 2019.

Streaming is one of the 16 trending share baskets you can now trade on. Trading share baskets allows you to diversify your risk, so a sharp movement in one company’s share price doesn’t have a disproportionate effect on the overall holding.

The streaming media stock wars

When Netflix was founded all the way back in 1997, in California, video streaming was a rather quaint concept, at a time when companies like Blockbuster and LoveFilm dominated the video market, by way of physical rental and return.

In 2002, Netflix floated on the US stock market, selling 5.5m shares at a price of $15 a share, raising $82.5m in the process. Over three years later, Amazon launched Amazon Video, an on-demand service that sowed the early seeds of what was set to become a two-horse race between the two to launch an online streaming service.

Why trade on streaming media?

With the recent global launch of Disney+ and its 24 March arrival in the UK, Ireland, Germany, France and other European nations – and with a mid-2020 launch scheduled for more European countries – the battleground is hotting up. Subscribers will be able to watch a host of Star Wars, Disney and Marvel content, essentially anything either Disney-related or Disney-owned.

And the European launch comes at a time when, due to the global coronavirus crisis, more people than ever are spending time at home either self-isolating or practising social distancing measures as governments battle to control the spread of the virus.

THE BULLISH STANCE

• Greater numbers of people that ever are using streaming content as their preferred means of consuming programmes
• Consumers are able to stream media in a large variety of ways, which means people have lots of choice and the means readily-available to be able to access and watch shows
• More providers are entering the market, driving up competition and potentially pushing down prices

THE BEARISH VIEW

• As more providers enter the market, each platform’s overall programme quality could become more disperse, potentially driving some customers away if they don’t feel they are receiving value for money
• Consumers are unlikely to have more than one streaming media subscription due to the costs involved
• Streaming services’ global energy consumption increased by 84% in 2019 to 451,000 megawatt hours – which is the equivalent of powering 40,000 average US homes for a year. Digital technologies now account for more carbon emissions than the aerospace industry, according to a study by the Shift Project