Both the S&P 500 and Nasdaq Composite hit new record highs in the stock market today. But the focus wasn’t so much on the big picture as it was on streaming.
Disney’s (NYSE:DIS) streaming platform Disney+ launched on Tuesday, as a whole host of new vendors have now popped up in the streaming arena.
Not long ago, top streaming options were limited to Netflix (NASDAQ:NFLX) and Hulu, the latter of which was owned by several different players. Over the last two weeks, two of the largest players in their respective industries have joined the race.
Apple’s (NASDAQ:AAPL) Apple TV Plus launched earlier this month. While it may not have the content library to stack up against Disney’s treasure vault, it does have the distribution via millions of devices. Offering a free year of service with certain hardware purchases is a smart move too, potentially making the service “stickier” for customers. Using free trials is one way the company got its Apple Music service off to such a strong start.
It’s too early to figure out who the winners and losers are. Netflix doesn’t benefit from both Disney and Apple undercutting their price, as the latter two weigh in at $4.99 and $5.99 per month.
However, one could argue these two entering the fray will only increase the conversion rate of streaming content. Think about it. The cable-cutting trend has been in place for some time now. Hulu TV — now majority-owned by Disney — and Google’s (NASDAQ:GOOGL, NASDAQ:GOOG) YouTube TV stream live TV. AT&T (NYSE:T) will launch HBO Max in May 2020, and already has various HBO streaming services available. Of course, Netflix is still available, along with several other services as well.
The point being, at the end of the day Apple and Disney entering the streaming game may not be as much of a loss for Netflix as it is a gain for cable cutting.
Even though Disney+ didn’t get off to a smooth start on Tuesday, its technical issues won’t stymie its long-term potential. Technical issues or not, it also doesn’t initiate a sell-the-news event for DIS stock. Disney was featured in Top Stock Trades column on Tuesday.
M&A and Partnerships
Anheuser-Busch InBev (NYSE:BUD) owns a 31.2% stake in Craft Brew Alliance (NASDAQ:BREW). However, the company announced it will purchase the remaining stake that it doesn’t already own, paying $16.50 per share in cash in the $321 million deal. Assuming the offer passes regulatory and shareholder approval, the deal should close in 2020.
BREW shares more than doubled on the news, after closing at $7.33 on Monday.
Just a few weeks ago, Fiat (NYSE:FCAU) and Peugeot agreed on a merger. While we’re not talking about a tie-up, the desire to team up is in the air. Tata Motors (NYSE:TTM) is reportedly in discussions for a partnership. The company is in talks with Geely, a China-based group that owns Volvo, as well as BMW (OTCMKTS:BMWYY).
Tata, which manufactures Jaguar and Land Rover vehicles, is seeking a partnership as it looks to reduce the cost of building out future generations of vehicles. The costs related to both electric and autonomous systems have been costing automakers a fortune. It’s led to companies like Ford (NYSE:F) to partner with Volkswagen (OTCMKTS:VLKAY), and Honda (NYSE:HMC) to invest in General Motors’ (NYSE:GM) Cruise unit.
Movers in the Stock Market Today
The tech stories continue to garner excitement. Snap (NYSE:SNAP) is rolling out its Spectacle 3 glasses today for $380. The glasses allow videos and pictures to be overlaid with unique augmented reality filters.
The rollout comes on the heels of a report suggesting Apple could have its own AR headset and glasses, but not for some time. The former could take about two years, while the latter may be headed consumers’ way in 2023. With reports like this though, it’s hard to hold your breath.
Apple Pay … why not Facebook (NASDAQ:FB) Pay? The company’s new Pay feature offers users the ability to make “convenient, secure and consistent” transfers to one another over any of Facebook’s platforms. That obviously includes Facebook, but also Instagram, Messenger and WhatsApp.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL, AAPL, T and DIS.
