The Bear Case For Digital Media
2007–2018 BitTorrent usage and mentions of major piracy hubs like The Pirate Bay dropped by 77% to 91% from their 2007 peaks as streaming libraries expanded but ever since 2018 piracy rate have increased again according to data from Infegy, mentions and activity related to illegal streaming sites (e.g., 123Movies clones) saw a 114% increase between December 2018 and 2022 as consumers faced subscription fatigue and content fragmentation
Why did this happen and what does it mean
I am still bullish on digital media as a whole I think everyone can admit its not going anywhere nobody is gonna start buying bluray again but the problem is nobody is buying the digital media
streaming made piracy too much work compared to paying a monthly subscription and it was a cheaper alternative to cable that included way more content but recently all media companies have started their own subscription services HBO Hulu Disney+ Amazon Prime Tencent Video Paramount+ Hotstar Apple TV ESPN AMC+ Fubo TV and many more I cannot possibly list here
one thing you might have noticed is lots of these names you might recognize they used to be from cable and now they are doing streaming aswell which has become a problem for the industry when everyones making shows on their own platforms they are constantly competing for content to make their subcription stand out a weakening economy less consumer spending leading to less subscriptions of these services and the purchases that remain are spread out between all of these different services reducing the revenue of every single streaming service company
companies that focus entirely on just streaming like Netflix have been struggling falling significantly since 2025 due to not missing earnings but missing the growth of the earnings the average household in America has over 5.2+ different streaming service site subscriptions according to these companies have been priced in as growth companies and they are missing the growth but still profitable
Why I am bearish but not short I believe all of these corporations that are struggling 100% notice this and are thinking of ways to "solve" this even if I don't believe they can solve this just a headline of a potential solution can destroy a short within minutes and a lot of the most popular streaming service companies are down 20-40% YTD I think we arent late to this but we arent early and I think shorting now wouldnt be a good move but I wanted to talk about how I viewed all of this
Disclaimer: This content is for educational and informational purposes only. It does not constitute financial, investment, or legal advice. The views expressed are solely my own opinions. I may hold positions in securities discussed. Always consult a qualified financial advisor before making investment decisions. Past performance is not indicative of future results.
