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Bollore: Streaming Music & Cash Flows

Finally, the size of the market is likely to grow because it is easier to listen to music now than at any point in history. Today every person who owns a smartphone (81% of the population in the U.S.) basically has a “Walkman” in their pocket. Smart speakers bring music cheaply into every room of the house. The ubiquity and cheapness of the internet will lead to connected cars (my Tesla Model 3 comes with a built-in wireless service), and streaming music will be just another app in our cars. Tesla (NASDAQ:TSLA) already has two built-in music streaming apps, including Spotify.

Once you have the ability to listen to any music ever created at any time anywhere, a streaming music service will become another utility, like electricity, water or Netflix (NASDAQ:NFLX), that you cannot live without.

There is an interesting contrast between Netflix and music streaming services.

When Netflix started its streaming service, everyone thought that streaming would increase the value of its movie library. This has not happened. Netflix has started a new arms race in movies and shows – the quantity and often the quality of new video content being created by Netflix, Amazon (AMZN), Apple, Hulu and others is staggering.

As a side point here, this dynamic has inflated the costs of creating movies and shows – the talent demands more money for their work (Apple is paying $15 million per episode of “The Morning Show”), so money buys a lot less in the movie industry today than it did five years ago. This will end too – probably badly.

Since our everyday ability to watch

Article source: https://finance.yahoo.com/news/bollore-streaming-music-cash-flows-205111708.html

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