Property Management Service Agreement: Fill & Download for Free

To make sense of this decision, we have to both step back and look forward a bit.(Disclosure: I don’t currently own any Disney stock, though I do expect to take a long position once my new brokerage account is ready. I may also short Netflix, though likely not in the next 30 days.)Media LandscapeLet’s start by looking at what all the recent mergers and acquisitions have left us with.In terms of film production, there are five major studios (parent co. in brackets):Disney (Disney)Paramount (Viacom)Universal (Comcast)Columbia (Sony)Warner Bros. (AT&T)There are a few other mid-major / smaller studios of note, but these will likely be acquired over time — as it’s getting impossible for them to compete.As for TV, we have the four major networks:ABC (Disney)NBC (Comcast)CBS (CBS)FOX (New Fox)As well as a bunch of major cable conglomerates (owned channels in brackets):Disney (ESPN*, A&E*, History Channel*, Lifetime*, FYI*, FX, National Geographic, Disney Channel, SEC Network)Comcast (MSNBC, CNBC, NBC Sports, USA Network, Syfy, Bravo, E!, Oxygen, Golf Channel, Telemundo)AT&T (HBO, CNN, Cartoon Network, Adult Swim, Cinemax, Turner Sports, TNT, TBS, and half of The CW)CBS (Showtime, The Movie Channel, and the other half of The CW)Discovery Inc. (Discovery Channel, Animal Planet, TLC, HGTV, Food Network, DIY, Travel Channel, Investigation Discovery, GolfTV, and half of the Oprah Winfrey Network)Viacom (BET, CMT, Comedy Central, MTV, Nickelodeon, VH1)New Fox (Fox News, Fox Business, Fox Sports, Big Ten Network)[*All the stations marked by stars are co-owned by Disney and Hearst. Disney also only owns 73% of National Geographic. Plus I may have missed a few other co-owned situations, as there are a lot of them, and many are complicated.]Breaking that down, we have a few clear winners:Disney (major movie studio + major TV network + huge collection of cable channels)Comcast (ditto)AT&T (ditto, except no major TV network)The others still have loads of value, but are in a distinctly lesser tier, mostly because they can’t aggregate enough consumer demand online. This is why Old Fox sold most of their assets to Disney. They saw the future and realized they weren’t on track to win it. While they’ll still make good money from sports and live programming, there just isn’t room for them in the scripted content business. The others (Viacom, CBS, Discovery, Sony) haven’t quite admitted their own defeat yet, but have no real chance of catching up.As to why, let’s take a look at the two big ideas behind these recent waves of activity.#1: Demand AggregationThere are two basic ways of selling something:Create a product and look for customers to buy it.Round up customers and look for products to sell them.In the traditional media model, a production company would come up with something customers might want (a show or whatever), then shop it to networks and studios, who leveraged their customer bases and marketing infrastructure to actually sell the thing to end users. It was a tidy enough system, and it worked well for a long time.Then came Netflix. Their gambit was simple (if poorly understood at the time): grow their own customer base by licensing and re-selling old products that networks/channels and studios didn’t value appropriately (basically old movies and TV shows that had already earned the bulk of the money they were likely to earn in the outdated “big release -> DVD/syndication” model). Once Netflix built a large enough audience, they then moved on to phase two: creating their own products. And now they’re in the third phase: letting those original licensing deals lapse. They have the customers (aggregated demand) now, and they can fill the supply themselves, saving them lots of money.(This gambit only worked because Netflix was the first to really understand the value of engineering/innovation in the context of media delivery. But their basic model was otherwise just aggregate demand -> fill demand themselves.)The networks and studios somehow managed to remain blind to the natural consequences of this. They under-valued longtail rights, and failed to match Netflix’s investments in internet/mobile delivery. Their rather late and lame solution was Hulu, the collective child of NBC (Comcast), Fox, Disney, and WarnerMedia (AT&T). The service did attract some customers, and served them well enough. But to whose benefit? Netflix grew value for Netflix. Who was Hulu growing value for?Well, we got that answer today. Disney had previously moved from 30% to 60% ownership of Hulu with their acquisition of Fox, then to 70% with the buyout of AT&T/WarnerMedia (who is moving their assets to a new streaming service of their own). And now Comcast, who is working on — you guessed it — their own streaming service has thrown in the towel, offering up the remaining 30% in context of a three-to-five-year exit plan.But before we get more into how lopsidedly great this deal is for Disney, we have one more factor to consider.#2: Vertical IntegrationSay you wanted to create a lot of products that made customers really happy, and you wanted these products to be of exceptional quality, and you wanted to be able to price them attractively — how would you go about that?First, consider the old model and the various parties involved — each with their own incentives, each taking their own piece of the pie:Production company comes up with an idea.Studio funds it / buys rights / oversees quality.Distributor takes cut to get the product to consumers.Now, imagine that the production company and studio and distributor were all the same company. That would be pretty great, eh?This is what AT&T, Comcast, and Disney are doing now. And they aren't just going vertical — they’re going horizontal too.AT&T will roll up all their cable properties and content libraries into a streaming service (HBO+ or whatever they call it), which will host all Warner Bros. movies (which includes the DC Extended Universe), which they will distribute at a discount to AT&T subscribers.Comcast will roll up all their cable properties and content libraries into a streaming service (NBC + or whatever they call it), which will host all Universal movies (which was supposed to include the terribly conceived Dark Universe of old school movie monsters), which they will distribute at a discount to Comcast subscribers. They’ll also use their IP to drive visitors to their theme parks.Disney will roll up all their cable properties and content libraries into a suite of streaming services (Disney+, ESPN+, Hulu), which will collectively host all Disney/Pixar/Lucasfilm/Searchlight movies (which includes the MCU, which itself outperforms nearly all other studios on its own), which they will distribute to customers directly as an internet product. They’ll also use their IP to drive visitors to their theme parks.Ok, now let’s tie this all together.2029 Landscape(Making some predictions here, some of which will inevitably be wrong, but which give a sense of current trajectories.)Most people will have packed in their cable TV subscriptions, having moved entirely to internet delivery, which will consist of the following options:Amazon, who only ever cared about adding a bit of value to Prime, and thus stuck to a few tentpoles, having otherwise lost interest in competing with all the others. (Amazon also lets you access all the other content providers through Alexa-enabled TVs.)Apple, who produces a handful of solid shows as part of their Apple TV+ efforts, but who mostly offers the best platform for buying/viewing content created by others — especially in context of VR, given how many people now own iSee headsets.Netflix, who owns the best collection of foreign content, and has since acquired a few smaller players and their libraries, having realized that their Originals weren’t enough.Comcast’s NBC+, which basically just offers The Office and a bunch of other stuff no one cares about.AT&T’s HBO+, which made up for the sin of Game of Thrones Season 8 by coming up with a good mix of prestige TV, GoT sequels, Daily Show knockoffs, and large Ricky & Morty orders.Disney’s suite, which includes ESPN+, Hulu, and everything ever produced under the Fox, Disney, Pixar, Lucasfilm, and Marvel brands.Just to add a few details about how big Disney’s advantage is here:Hulu isn’t just a good repository for Fox-acquired content that’s too adult/off-brand for Disney+. It comes with Hulu Originals (which will grow at Netflix’s expense), and Hulu Live (which is and will remain the best of the pure “full cable TV on the internet” services, being that it can be priced more attractively than its competitors).The big six are all going to chase gems like Discovery, AMC, Lionsgate, Viacom, Sony, and MGM. If you were on the board of those companies and you were comparing bids, you’d be inclined to ask “which of these bidders will make best use of our assets?” — which is going to point you to Disney. Why? Demand aggregation. They’ll have way more viewers, which is a lead that will only compound. (Apple is starting from zero and has meh offerings. Amazon is niche, and will likely remain so. Comcast won’t have their service online for a year or two, and doesn’t have a great scripted library. AT&T has a great library, but is also going to be playing from behind, and has more antitrust risk given their involvement in the cable/mobile industries. Lastly, Netflix isn’t profitable, which will become a problem sooner than later.)So, this context all in mind, time to answer the original question.Why did Disney agree to take full control of Hulu now despite Disney+ launching so soon? Because it meant gaining sole possession of the aggregated demand (i.e., existing subscriber base) of the most serious Netflix competitor, which Disney now gets to bundle to fuel even more growth. They get to keep all 28 million subscribers, and the former Hulu partners get to start from zero. Disney also gets a fully-stocked service that’s already online, which puts them a year or more ahead of the competition.By the fall or so, Disney is going to be rolling out packages that combine Disney+, ESPN+, and Hulu — which is going to win them an awful lot of subscribers (and, more importantly, timeshare from those subscribers, thanks to having a much better content library). Hence why I’m going long on them and short on Netflix (who I don’t feel did enough to build on their early lead).(One other lens to consider: Disney is going to own something like 33-40% of the global box office for years to come. This is going to give them enormous amounts of leverage in terms of extracting favorable terms from theaters, and is going to make the value proposition of a Disney+ subscription at $7/mo even more incredible. It’s hard to imagine any family not paying for one, and easy to imagine a family cancelling Netflix once it’s used far less often.)Notes:Viacom actually has its own non-media parent company, but the relationship is complicated and not really something we need to factor here. (They may also re-merge with CBS, but that feels irrelevant at this point.)I’m eliding all the complications caused by shows being owned by production companies that are themselves sometimes owned by competitors to the networks that said shows were originally licensed to (e.g., AT&T now owns Friends, despite it having aired on NBC, a Comcast network). The whole industry is a tangled mess of rights agreements.Building on the above: the idea of demand aggregators creating their own content is a bit tricky. Lots of TV shows are produced by individual production teams, not by the aggregators directly. It comes down to whether the aggregator owns all rights or not. If they do, it’s “their” show, regardless of who produced it.I’ve focused on English-speaking programming in North America, mostly to contain scope. Global competition is an even more complicated story for another day (short version: Disney and Netflix have massive advantages there).Comcast is (I think hilariously) framing this as a win — which it is if you only focus on cash. They’re going to get continued royalties from Hulu and Netflix, plus a handsome payday in a few years when Disney has to actually close the buyout. But Comcast was a heavy bidder for Fox for a reason. They lost here, and they know it. Now they’re just spinning for shareholders.

Here some reasons why India does not join to RCEPIt was destined to become the largest free trade agreement with 40 percent of world trade and 35 percent of GDP involving 16 countries, home to 3.6 billion people or half the world's population. Now more than a third of that population group will not be part of the Regional Integral Economic Association or RCEP."Neither the Gandhiji Talisman nor my own conscience allows me to join RCEP," Prime Minister Narendra Modi said Monday in Bangkok when India left negotiations on a free trade agreement that began seven years ago.The other 15 countries decided at the insistence of China to advance in an attempt to "isolate" India. The 16 members of the RCEP negotiations were 10 ASEAN members plus Australia, China, India, Japan, New Zealand, and South Korea. Without India, however, RCEP does not seem as attractive as the trade pact it had promised during the negotiation phase.By refusing to become a member of the RCEP, Prime Minister Modi said the Pact is not satisfactorily addressing the outstanding issues and concerns of India. RCEP supporters complained that India launched their "last minute" demands. However, India had raised the issue during the negotiation phase, as industry and farmers had expressed serious concerns about CERs.ECONOMIC RALENTIZATIONThe Indian economy is going through a difficult time. The GDP growth rate has been delayed for five consecutive quarters, ie from January to March 2018. GDP growth rates have been an inverse curve since the introduction of the tax on goods and services.In combination with the demonetization movement in November 2016, the GST implementation turned out to be a double disruption of the economy, which has not yet reached full agreement with these two important decisions.While the industry is under pressure and the government is tackling the domestic economic situation, a massive free trade pact such as RCEP has exposed Indian companies and agriculture to uneven competition from countries lurking like giant sharks in exports.COMMERCIAL DEFICIENCYIndia as a whole is a 'bad' business entity. It has huge trade deficits with almost all the economic powers of the world. Of the 15 RCEP countries, India has serious trade deficits with at least 11.India's trade deficit with these countries has almost doubled in the last five or six years, from $ 54 billion in 2013-14 to $ 105 billion in 2018-19. Given the comparison of exports and imports with the bloc, a free trade agreement with the group would have increased it even more.India currently spends 20 percent of all its exports to the RCEP countries and receives 35 percent of all imports from these countries. China is the master of ceremonies for this export and import circuit. It is the largest exporter to almost all countries in the group, including India. Of the $ 105 billion trade deficit in India with the RCEP countries, China represents $ 53 billion.The expansion of the trade deficit would empty India's foreign exchange reserve faster. And the depletion of the external reserve is never good for an economy and is less desirable for those trying to recover.INDUSTRIES AND FARMERSRCEP was one of those pacts that both industry and farmers opposed. The manufacturing sector in India is in crisis. The sector has contracted in recent months. Industrial production grew at the slowest pace in two years in October, according to the INPMI = ECI index of Nikkei Manufacturing Purchasing Managers compiled by IHS Markit.The service sector has also not been good lately. In the NPMI = ECI survey, you have seen the first consecutive monthly delay since July-September 2017 in October. China and the ASEAN countries have a solid service sector and free access to these players can harm the sole savior of the Indian economy in these times of crisis.In agriculture, domestic players involved in dairy products, spices, mainly pepper and cardamom, rubber and coconut, would have to deal with the dumping of spices from South Asia. Sri Lanka is already giving Indian spice producers a difficult time.Vietnam and Indonesia export very cheap rubber. Australia and New Zealand are waiting for free access to India for their dairy products. Indian companies would be hit hard because RCEP offers them insufficient protection.PAST EXPERIENCENiti Aayog had published a report in 2017 that noted that free trade agreements did not work well for India. He analyzed several free trade agreements that India has signed over the past decade. Among them were the free trade agreement with Sri Lanka, Malaysia, Singapore, and South Korea.The analysis by Niti Aayog showed that imports from free trade countries increased while exports to these destinations did not coincide. Even India's exports to the free trade countries did not exceed the overall growth of its exports. Niti Aayog discovered that the use of TLC by India was enormously low between 5 and 25 percent.CHINA GAMEFinally, RCEP originated as a Chinese game plan to prevent its production industry from falling apart due to its own weight. Various industrial actors in India marked the Chinese agenda to flood the Indian market with the RCEP countries as a liaison network.China has already covered most of the united markets under the RCEP umbrella. The same report by Niti Aayog noted that China changed the trade comparison with ASEAN countries after the signing of NAFTA, which represents the ASEAN-China free trade agreement, in 2010.ASEAN-6 (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) had a trade surplus of $ 53 billion in 2010, which in 2016 became a trade deficit of $ 54 billion.India, with its 1.3 billion inhabitants, offers the largest free access market to Chinese companies feeling the squeeze of the US-China trade war, with Donald Trump's government facing the production giant for the past year and a half.China needs more access to the Indian market to maintain its manufacturing industry. The inability to find a market will have a step-by-step effect on the Chinese economy and the global ambitions of President Xi Jinping. In Bangkok, Prime Minister Modi simply refused to be a voluntary dump of China's commercial imperialism.India wanted a key clause to be included in the RCEP Pact for the automatic activation mechanism as a shield against the sudden and significant increase in in-country imports (read China). The RCEP covers trade in goods and services, as well as investment, economic-technical cooperation, competition, and intellectual property rights.