THE GHOST TRAIN
THE FINANCE GHOST: MultiChoice vs the streamers
There’s no guarantee that the likes of Netflix and Disney+ will become economically attractive. Is this a winner-takes-all industry, or does everyone (except the consumer) simply suffer?
Here’s something to remember: if the consumer is getting a far better experience than ever before, at prices that are almost too good to be true, it means the companies in the sector are taking pain. The prices are too good to be true, but there’s enough capital behind the companies providing the service to ensure those prices will continue for a long time.
In winner-takes-all economics, you have a scenario where a company has created a shift in consumer preferences (for example hailing an Uber instead of driving a rental car) that cannot be delivered profitably at anything less than substantial scale. Everyone loses money until a winner eventually emerges, by which stage there is an unassailable competitive advantage. This is the theory, at least...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.