IPO Corner: The Ubiquitous Streaming Wars

Much the same way the airplane was dismissed as wild fantasy, so too was television… called impossible, the radical dream of mad visionaries. And as sometimes happens, those visionaries turned out to be correct. Now, we stare down at our hands all day… holding a magic black box that beams all the world’s information into our eyes 24/7 at speeds also once thought impossible.

That was only around one hundred years ago or so, which is a blip on the radar in cosmic terms, but a vast lifetime when we’re talking about the history of the television broadcasts. The technology, developed in the 1920s, had a couple of fantastic names proposed before television was settled on, including the televista and the telephote… and this invention made today’s world possible.

Can you imagine trying to explain to someone five generations ago that we now carry tiny, moving pictures in our pockets? That these sleek, expensive contraptions let us communicate with anyone, anywhere in the world, at any time… regardless of age, language, or station in life? We can bet that more than a handful would question your sanity, yet here we are… streaming and telecasting our little hearts out. Makes you wonder why we bother mocking the dreamers…

Big Business Now

Quantum leap to today and these “moving pictures” are now big business… the streaming and telecasting business. A manner of war has been raging in the space, a conflict for the pockets of consumers thirsty for content. Especially now that the pandemic has upended the world and our views on content consumption with it. We’re moving from an outward focus to a more local, inward focus. People are remembering the value of a night in with the kids and a good movie. Or, with inflation on their backs, they’re remembering how economic a night in streaming can be.

And, as always… big revenue means people will try to find ways to skim off the top. It’s not only legitimate players traversing the waters here, it’s illegal streamers and those looking to get around controls. It’s enough of a problem that legislators have gotten involved, with a federal judge recently ordering all ISPs in the United States to block three pirate streaming services altogether, by any means technologically possible.

This is more than Netflix (NFLX). It’s more than Disney (DIS), Apple (AAPL), Amazon (AMZN). It’s the future.

Universal Opportunity

Lawmakers and businesses alike understand the possible financial losses faced by legitimate services in this space… the global video streaming market was valued at $372.07 billion in 2021, $473.39 billion this year, and will fatten up to a plump $1,690.35 billion by 2029. That’s incredible considering where we were just a century ago. And, while video streaming usually conjures images of Netflix and YouTube, it’s a whole lot more than that.

We’re seeing all aspects of life incorporate streaming, video on demand (VOD), and telecasting. We learn at home, do court remotely, stream extreme athletes base jumping, game in tournaments held simultaneously around the world, go to work as holograms in virtual meeting rooms, work out at home with our trainers streaming on our machines, use VR to take tours of engineering drawings before moving forward with projects… the world has already made the magic leap inside the box, and we can only expect this trend to accelerate.

Recent Deals

Let’s take a look at a few companies in the know in this space, and ready to make their IPO debuts: AMTD Digital and Triller. Both are looking to slice out a cut of the market for themselves and we’re here for it.

AMTD Digital (HKD) is a subsidiary of AMTD Group that bills itself as a “one-stop comprehensive digital solutions platform” offering “digital everything”, including digital financial services, digital media content and marketing, digital investment, and their own SpiderNet Ecosystem, which connects entrepreneurs and businesses. The company has managed to develop an entire ecosystem within the Asian market with their forward-thinking products focused on a digital world.

While AMTD isn’t technically a streaming service, what they are is a company that realizes streaming and digital must be a part of their offerings to succeed, and they are joining the ranks of companies swallowing up media brands (digital finance media company DigFin, in AMTD’s case) and incorporating them to stay relevant… and their IPO just happened. They were able to raise $125 million through 16 million shares at $7.80 each. It turned out to be the largest NYSE IPO by a Chinese company so far this year . . . a little small and overheated for me, but you never know.

Triller is a short-form video platform based in Los Angeles that was launched in 2015. If you’ve heard of TikTok, then you are already at an advantage, because that’s the type of content Triller allows users to make… short videos set to music. So far, the company has done pretty well for itself. Their application has been downloaded hundreds of millions of times and has become the stomping grounds of well-known figures like Kevin Hart, Cardi B, and even a few former presidents.

Some may recognize the name from their announcement in December that the company was planning to float via merger with US entity SeaChange, but those plans have been scrapped. Now, the company has shifted gears and has filled to go public on the Nasdaq via a direct listing. According to a statement from Triller, the change in plans is the result of “global macroeconomic conditions”, and the company expects an approval for their listing by Q3.

It might be timely too… with SEC hounds on the heels of TicTok, asking Apple and Google to remove the application from their respective app stores. The SEC is charging that the application has become nothing short of a sophisticated data harvesting and surveillance mechanism for malicious actors. This could make the TikTok rival a popular alternative… and the CEO of the company, Mahi de Silva, is promising the IPO will be the “largest creator IPO in history.”

The “streaming wars” are real… as evidenced (very scientific here) by pop culture, with wildly popular shows such as South Park pointing out the absurdities that sometimes come when a space is being innovated and evolving… and we think it’s great. When competition exists, innovation persists… and we plan to be here, poised to jump into action and alert you if any of these companies should land on our Buy List. See you next time!