Strategic partnerships with studios and networks such as US based Showtime could be the future of Nine Entertainment Co Holdings Ltd (ASX: NEC) through its investment in Stan.
Stan, the video on demand streaming service similar to Netflix has experienced significant subscriber growth due to the popularity of its shows led by Showtime's "Billions".
A market update by Nine today showed that in just the 3 years since 2015, Stan now has over 930,000 subscribers and expects to become cashflow positive late FY 18 to early FY 19.
It's no surprise then that Nine expects video on demand as well as premium TV & digital to constitute a bigger part of its revenue going forward.
Foolish Takeaway
I think the trend towards on demand video and music streaming is undeniable which is positive for Stan & Nine. There is however the risk that Netflix might take market share from Stan by spending more on content.
