Mobile Technology
Mobile technology is an integral part of our lives. Picture it: you get up, check your messages/emails, check-up people you love and work with, catch up on the news and other developments, and do much more on your mobile phone. And these are just some basic things people do on their phones, laptops, and other mobile devices.
Mobile technology’s key components include general packet radio service (GPRS), short message service (SMS), multimedia messaging service (MMS), global positioning service (GPS), and WAP, among others.
[Invest in 5G: What every investor needs to know.]
But “mobile” is a broad term. It essentially covers all hand-held mobile devices: mobile phones, laptops, tablets, smartwatches, and virtually any mobile device that can communicate with other devices.
Mobile technology, as mentioned, is shaping many aspects of human life: how we communicate, work, and live! The concept was mostly theoretical about three decades ago, but we now live in an age where our lives are heavily dependent on this technology.
Why Invest in Mobile Technology?
According to Morgan Stanley there have been four major computing cycles thus far: mainframe computers in the 60s, minicomputers in the 70s, personal computers (PCs) in the 90s, and desktop internet in the 2000s.
One eye-catching finding of this study is each of the subsequent computing cycles grew by a successive, continuous rate of 10X – the minicomputer cycle grew to ten times the size of the mainframe cycle and so on. The world is past the desktop internet cycle, and all focus now is on mobile technology.
The mobile technology cycle is expected to experience a boom ten times bigger than the desktop boom experienced in the 2000s – this is immeasurable, considering how big the 2000s boom was. The desktop cycle, however, was not as versatile and entrenched as the mobile technology cycle is. As such, we will likely see exponential growth as the world becomes more and more digitized.
Internet & Smartphone Penetration: There are about 14 billion mobile devices in use around the world today, according to Statista. 5.28 billion of these devices are in people’s hands, which accounts for about 68% of the world’s population.
Over half of the world’s population (about 3.5 people) is active online. 80% of internet users (about 2.8 billion people) own at least one smartphone – a sizeable fraction of this population owns more than one smartphone, which is especially well documented across Asia.
Internet penetration by mobile phone was about 48% in 2014. It grew to 61.2% in 2018 and reached 63.4% in 2019. It is estimated that mobile phone user internet penetration will be over 80% by 2022. The average mobile internet user spends about 3 hours online per day.
Smartphones are driving mobile technology. Their small size makes them convenient and hence more preferable to laptops and other larger devices.
Smartphone manufacturers have been recording increases in the number of devices they make, and this trend is expected to continue for the foreseeable future. Apple, which is one of the largest smartphone makers, sold more than 210 million iPhones in 2016 alone. It is now the first trillion-dollar company in the world, and it still plays second to Samsung.
The world aims to achieve close to 100% internet penetration in the coming decades. The internet is also expected to grow larger and more dynamic over the coming decades.
Currently, about 1.56 billion smartphones are sold to end-users annually. This number has been growing steadily over the past two decades, and it is expected to grow exponentially as the smartphone market expands.
Cloud Computing: The cloud has proven invaluable in more ways than one. Most notably, it is one of the few avenues left for businesses and people to use following the outbreak of the COVID-19 pandemic.
The global cloud computing market is currently worth about $236 billion, up from $87 billion five years ago. The market is expected to grow to about $623 by 2023, which would signify a CAGR of 18%. Its uses are also expected to expand over time, and they will overlap with the new opportunities brought about by 5G technology.
5G Networking: The mobile technology revolution is just beginning. It promises great things, such as Artificial Intelligence (AI) and Internet of Things (IoT) – IoT will also contribute to an exponential growth of mobile technology as it will connect virtually everything to the internet. 5G networking has emerged as the answer to bringing these innovative technologies to fruition.
5G technology is expected to be more than 100 times faster than the current 4G technology – to put this into perspective, 5G supports download speeds of up to 1.4GB per second. This will revolutionize technology across industries such as education and healthcare. For instance, hospitals will transmit large MRI files instantly, and surgeons can perform surgeries in virtual presence from anywhere in the world.
Mobile technology will help shape the future of mankind. Billions of people around the world are already dependent on mobile technology for their day-to-day living, and billions more are catching up. Soon, it will become necessary to join the grid just to keep up with the human race.
How to Invest in Mobile Technology
However, like many types of new technology, investing in mobile technology does come with potential risks. mInvesting in the sector via an ETF or mutual fund, however, is a good way to counter these risks while still gaining exposure to this high-potential segment. A search on Magnifi indicates there are a number of ways for investors to access mobile tech this way.
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]
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5G
Although 5G appears to be a relatively new trend, it has been in the works for much of the last decade. This new type of internet access, which is anticipated to potentially replace in-home WiFi in the near future, is beginning to emerge among a few select carriers. Verizon, T-Mobile, and other popular carriers are making it easy for their current customers to transition from 4G LTE to 5G mobile internet, which is a stepping stone for applying the technology to other Wi-Fi-enabled devices in the future.
[5G is Just Part of it. Invest in Mobile Technology as a Whole.]
But investing in 5G while the concept is still relatively new, you can gain an edge over the competition by being one of the first to support an up-and-coming service that is likely to have a strong impact on the future of mobile internet.
What Is 5G?
Although some people may simply think of 5G as a replacement for WiFi, the overall potential of the technology is much more complex. First and foremost, 5G is beginning to replace the 4G LTE connection that most cell phone carriers currently use to provide internet access when a reliable WiFi connection is not available. 4G, which came out approximately a decade ago, was a modern replacement for the primitive 3G and 2G mobile internet of early cell phones. Each version made new features possible, increased the speed and capability of cellular data, and boosted the range at which cell phones could get a reliable signal. Like previous upgrades, the widespread release of 5G technology is expected to increase our ability to immediately access the information we need from anywhere in the world.
[What will 5G mean for the future of video streaming?]
5G coverage is divided into three groups: low-band spectrum, mid-band spectrum, and high-band spectrum. High-band spectrum, which is the classification that most major carriers are currently focusing on, generally provides the strongest and fastest signals. However, this type of spectrum has a much more difficult time reaching through buildings than low-band and mid-band spectrum. For this reason, it is important to carefully consider the pros and cons of each type of spectrum to get an idea of which is likely to be the most successful in your area before choosing one to purchase or invest in.
Why Invest in 5G
Although the 2020 5G market is expected to be in the range of $5 billion, 5G technology is anticipated to grow exponentially over the next five years, reaching over $650 billion by 2026.
The reason for this is the fact that widespread 5G coverage has not yet replaced 4G LTE and WiFi, in part because of regulatory hurdles and delays. Once those issues are resolved, it is expected that 5G adoption will take off nationwide, but it’s still not clear what that timeline will look like and how soon all of this will happen. Still, that explosive potential is why this up-and-coming form of mobile internet is an important area for investors that are interested in the latest technology to keep their eyes on.
After all, like many emerging industries, 5G technology is being pioneered by a handful of standout companies, both large incumbents and fast-growing startups. And it’s still early in this cycle. Investors who get in on 5G now will have far more upside to ride up than those that wait until the technology is fully rolled out and in broad use.
How to Invest in 5G
However, like many types of new technology, investing in 5G does come with potential risks. Although 4G, WiFi, Bluetooth, and other older signals have been studied in-depth as far as both immediate and long-term safety, not as much is currently known about the impact of long-term exposure to 5G’s electromagnetic fields. What’s more, it’s not yet clear how soon the national 5G roll-out will actually happen nor which companies will take the lead.
Investing in the sector via an ETF or mutual fund, however, is a good way to counter these risks while still gaining exposure to this high-potential segment. A search on Magnifi indicates there are a number of ways for investors to access 5G this way.
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the April 8, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Video Games
If the image that comes to mind when someone mentions video games is a teenage boy sitting in their parent’s darkened basement playing Mario Kart, surrounded by discarded Mountain Dew cans and Doritos bags, then it is time to discard this outdated stereotype.
Whether or not you yourself enjoy playing video games in your leisure time, gaming has evolved considerably and expanded well beyond its niche origins to sit squarely in the entertainment and cultural mainstream. Fortnite, you may recall, became a global cultural phenomenon following its 2017 release, with everyone from World Cup soccer players to Michelle Obama getting in on the dances popularized by the game.
The demographics of gaming are rapidly evolving with this expansion into the cultural mainstream. In a recent study by AARP, the percentage of adults age 50-59 who play video games at least once a month increased from 38% in 2016 to 44% in 2019, with women more likely than men to regularly play.
Gaming’s explosion in popularity is due, at least in part, to transformative changes in the video game industry over the past decade.
Ten years ago, if you wanted to play the latest game, you would go to a local store (GameStop, for instance), buy the game for around $60, and take the discs home to install/play. These days, mobile gaming (primarily on smartphones) accounts for the largest share of total gaming revenue worldwide, and popular games are often free to download and play. Developers monetize these free games by offering players in-game purchases.
Another relatively recent development is the rise of subscription gaming, which offers players access to a multitude of games for a monthly subscription fee. Similar to the “streaming wars” between Netflix, Amazon, Hulu, etc., developers are scrambling to build competitive subscription services as they work to attract larger shares of the growing market.
For those interested in the investment potential of this dynamic market, there are a few important points to understand.
What Are Video Games Circa 2020?
The Cambridge Dictionary defines a video game as “a game in which the player controls moving pictures on a television screen by pressing buttons or moving a short handle.”
Video games have been around in one form or another for decades, beginning with arcade gaming in the 1970s and transitioning to home gaming in the late 70s and early 80s with popular titles such as Space Invaders, Frogger, and PacMan.
Gaming today largely falls into three distinct categories: console gaming, personal computer (PC) gaming, and mobile gaming. Console gaming happens on devices that are built exclusively to play video games (think PlayStation, Xbox, etc.), while PC gaming happens on high-performance personal computers, and mobile gaming, as the name implies, happens on your mobile device (such as your smartphone or tablet).
Until relatively recently, console and PC gaming were the dominant forces in the video game industry, but the recent explosion of smartphone use and internet connectivity globally has dramatically reshaped the industry.
According to market research firm Newzoo, mobile gaming is currently the fastest-growing segment in the video game industry, and revenues from mobile gaming account for 46% of the total gaming market in 2019. This isn’t to say that dedicated gamers are ditching their consoles and PCs in favor of games on their smartphones; rather, the market is expanding as more people gain access to free or inexpensive games through their mobile devices.
This expansion and diversification of the gaming ecosystem have given rise to novel revenue streams; most notably, live streaming and esports.
Live streaming involves gamers broadcasting themselves playing video games live on the internet. The practice has become wildly popular, as evidenced by Amazon’s 2014 acquisition of the streaming startup Twitch for $1 billion.
Esports, meanwhile, refers to competitive, organized video gaming. You may recall the story about the 16-year-old who went home with $3 million after winning the 2019 Fortnite World Cup.
Global revenues from the burgeoning esports market exceeded $1 billion in 2019, an increase of 26.7% over 2018 revenues. The emergence of live streaming and esports has fueled greater interest in gaming while offering outside investors a new way to reach this diverse group of consumers.
Why Invest in Video Games?
According to Newzoo’s 2019 Global Games Market Report, there are more than 2.5 billion people globally who play video games, and global revenue from gaming reached $148.8 billion in 2019. The U.S. market alone generated about $35.5 billion in 2019.
As a point of comparison, the 2019 global box office for films reached a record $42.5 billion, and the U.S. box office finished with $11.4 billion. This means that in 2019, people spent more than three times as much on video games as they did on seeing movies.
This remarkable performance comes amid a changing revenue landscape in which console and PC gaming account for less and less consumer spending.
Mobile gaming comprised about 46% ($68.2 billion) of overall market revenue in 2019 – an increase of 9.7% over 2018 revenues. Though smaller than mobile, console gaming continues to see healthy growth, occupying 30% of the market ($45.3 billion) with an increase of 7.3% from 2018.
Newzoo forecasts that video game revenues will grow to $196 billion by 2022 at an annual growth rate of 9%. Mobile gaming will continue to grow over the next several years, increasing from 46% of the total market in 2019 to a forecasted 49% by 2020 ($68.2 billion to $95.4 billion).
Mobile gaming’s expansion in the market may even be accelerated by outside factors, including the rollout of 5G networks (faster connectivity means better gameplay in more places) and further advancement of augmented/virtual reality (think Pokémon GO).
The video game market offers a unique investment opportunity because the industry is projected to continue its extraordinary performance in the coming years, and the various segments offer a wide variety of options when it comes to risk vs. return.
How to Invest in Video Games
However, despite their popularity and long-standing growth, investing directly in the video gaming sector can be challenging. There are hundreds of different companies working on individual gaming properties, and the rise of mobile gaming has introduced new players to the sector, such as mobile providers and hardware manufacturers. However, a search on Magnifi suggests that there are a number of other ways to profit from the growth of video games as a whole.
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
This blog is sponsored by Magnifi. The information and data are as of the Mar 17, 2020 (publish date) unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]
Unlock a World of Investing with a Magnifi Account
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the January 22, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Cybersecurity
Upon arriving for work on March 19, 2019, employees of Norwegian aluminum producer Norsk Hydro found alarming signs posted throughout the office notifying staff that the company had been hacked and to not use any network devices. Locked out of all company computers, and unable to even use the office printers, desperate employees drove to local print shops to make the signs.
What happened at Norsk Hydro in early 2019 was a significant, and increasingly-common, type of cyberattack in which hackers gain entry to a company’s secure network, encrypt important data, and hold it hostage until the company agrees to pay a ransom. Norsk Hydro decided early-on that it would not pay the ransom and would instead endeavor to retrieve the data from back-up servers. While Norsk Hydro scrambled to address the attack, no company computers or devices could be used, which meant that the 35,000 employees across 40 countries were, temporarily, reliant on pen and paper to conduct business.
Ultimately, the attack cost Norsk Hydro an estimated $71 million.
The threat of cyberattack is becoming more sinister as life moves increasingly online. Hackers continuously probe systems for vulnerability, and individuals, businesses, and even governments are learning (sometimes the hard way) that cybersecurity needs to be taken extremely seriously.
[Cybersecurity matters more than ever in today’s Blockchain-enabled economy. Here’s how.]
The World Economic Forum’s 2019 Global Risks Report, which annually identifies the most pressing global challenges, ranked cyberattacks among the top 10 risks globally in terms of overall impact. Facing this looming threat, organizations around the world are investing heavily in cybersecurity solutions.
For instance, federal funding for the newly-created Cybersecurity and Infrastructure Security Agency increased by $334 million between 2019 and 2020. In addition to building internal cybersecurity capability, businesses are under increasing pressure to comply with new data privacy laws, such as the recently implemented General Data Protection Regulation in the European Union. Implementing strong cybersecurity practices is increasingly seen as essential for organizations of all sizes, and businesses offering cybersecurity solutions are in high demand.
For those interested in the investment potential of this booming market, there are a few important points to understand.
What Is Cybersecurity?
According to the National Institute of Standards and Technology Framework for Improving Critical Infrastructure Cybersecurity (often referred to as the NIST Cybersecurity Framework), cybersecurity is defined as “the process of protecting information by preventing, detecting, and responding to attacks.”
[It’s not all virtual. Here’s how to invest in… Military & Defense]
A successful cybersecurity strategy involves multiple layers of protection integrated across an organization’s technology and workforce. This involves securing devices, the network, and cloud with advanced protection technologies that prevent outside intrusion and bolster internal security. Educating people on basic cybersecurity principles is equally as important as implementing advanced security tools; even the best security systems can fail if people are careless or unaware of potential threats.
Organizations that implement a successful cybersecurity strategy often do so with the help of a cybersecurity framework, which helps inform decision-making when it comes to thinking critically about cybersecurity risks within an organization. The NIST Cybersecurity Framework is one such framework, and it is increasingly implemented by private companies in the U.S. as cybersecurity concerns increase.
Still, cyberattacks are becoming more sophisticated as technology becomes increasingly interconnected, and organizations of all shapes and sizes are scrambling to update their cybersecurity strategies. Unfortunately, hackers adapt, and the threats evolve just as fast as the defenses. There is a growing gap between the need for cybersecurity solutions and the ability for organizations to produce those solutions in-house.
Increasingly, organizations are looking to third-party security providers to help cope with complex, evolving threats. Even a robust, well-trained staff of IT professionals may not be sufficient to protect an organization from these threats. As such, there is growing interest in companies like Splunk, which specializes in analytics-driven security solutions. Splunk is valued at more than $25 billion, and the company’s total revenues increased 36% over the past year.
The U.S. Department of Defense recently announced that it is buying Splunk software as part of a 10-year, $820 million purchase agreement.
Why Invest in Cybersecurity?
The global cybersecurity market is growing rapidly. According to market research by Mordor Intelligence, the global cybersecurity market was worth about $161 billion in 2019 and is projected to grow to about $363 billion by 2025 at an annual growth rate of 14.5%.
However, market research by International Data Corporation (IDC) paints a more conservative picture, valuing the 2019 cybersecurity market at $106 billion and growing at an annual rate of 9.4% to $151 billion by 2023.
Regardless, the trend is undeniable: cybersecurity is a healthy and growing market.
All the fundamentals are solid, and powerful global trends are pushing cybersecurity toward the forefront of all conversations surrounding technology for years to come (data privacy issues, the internet of things and increased connectivity, grid vulnerabilities, etc.).
Mordor’s research notes that the cybersecurity market is somewhat fragmented, meaning that it is highly competitive and not completely dominated by a few powerful companies. For potential investors, this diverse market offers real opportunities for sustained and potentially rapid growth.
Venture capital (VC) funding in cybersecurity companies has been increasing rapidly over the past several years. According to KPMG, VC funding of cybersecurity companies in 2018 reached a record $6.4 billion, and 2019 funding numbers are expected to exceed that figure. Given that technological innovation and adoption are accelerating globally, and that cyberattacks are occurring more frequently and with greater impact, investment in cybersecurity solutions will likely continue to grow for the foreseeable future.
For the savvy investor with an eye on the future of technology, the cybersecurity market offers excellent growth potential.
How to Invest in Cybersecurity
However, as an emerging and highly-technical industry, jumping right into cybersecurity by investing directly in one of the field’s leading firms can bring with it undo risk for investors. As with any tech investment, it’s important to understand the products and services that these companies are offering their customers, and how those offerings truly set them apart from the competition, in order to accurately gauge the potential growth as well as the potential risk in any cybersecurity investment.
A search on Magnifi suggests that there are a number of mutual funds and ETFs available that offer exposure to the growing field of cybersecurity requiring investors to get a PhD in technology first.
Unlock a World of Investing with a Magnifi Account
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the February 26, 2020 (publish date) unless otherwise noted and subject to change.This blog is sponsored by Magnifi.
Internet of Things (IoT)
If you were among the lucky attendees to the 2020 Consumer Electronics Show (CES) in Las Vegas, you likely would have noticed that “connectivity” was one of the show’s most prominently featured trends.
CES bills itself as the “world’s largest and most influential tech event,” and many companies at the show chose to display “smart” products that feature internet connectivity as a means by which the product becomes more useful to the consumer. For instance, Weber, the company famous for its round, charcoal kettle grills, featured its new “Weber Connect Smart Grilling Hub,” which promises to serve as a kind of “step-by-step grilling assistant that sends notifications directly to your smart phone on everything from a food readiness countdown, to when it’s time to flip and serve.”
Kohler, the company primarily known for its plumbing fixtures, featured its new voice-controlled “Moxie” showerhead/wireless speaker, which “lets you stream your favorite music, news or talk radio right in the shower with you.”
Smart devices like these are becoming increasingly popular as daily life becomes more connected to and shaped by the internet. The interconnection of our devices via the internet is often referred to as the “Internet of Things,” or IoT for short.
An entrepreneur named Kevin Aston first coined the term “Internet of Things” back in 1999 in an attempt to describe the connection between physical objects and the internet. At the time, Aston was working on linking Procter & Gamble’s supply chain to the internet through RFID tags.
These days, IoT encompasses the vast, interconnected ecosystem of devices, sensors, computers, and networks that communicate with each other and with us. There are more than 20 billion devices with internet connectivity in use today, and there is enormous value in the data that these devices generate.
This value extends well beyond the realm of consumer electronics. For instance, IoT is considered the driving force behind Industry 4.0, a term described by Deloitte as the “new industrial revolution—one that marries advanced manufacturing techniques with the Internet of Things to create manufacturing systems that are not only interconnected, but communicate, analyze, and use information to drive further intelligent action back in the physical world.”
For those interested in the investment potential of this innovative technology, there are a few important points to understand.
What Is the Internet of Things (IoT)?
According to research and advisory firm, Gartner, IoT is the “network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.” The overarching purpose of IoT is for physical objects to sense and report information in real-time so that a process can be made more efficient, convenient, or safe.
The practical applications of IoT are vast, and faster, more affordable technology is driving innovation across very different industries.
Let’s start with the problem of traffic safety. The City of San Jose, California, is currently integrating IoT solutions in order to make intersections safer for pedestrians. For instance, IoT sensors communicate with traffic signals when someone crossing an intersection may require a bit more time before the signal turns green.
Another problem IoT is helping to address is that of food waste. According to the UN, roughly one-third of the world’s food production is lost or wasted every year. The Danish supply company, Globe Tracker, is working to fix that by offering IoT solutions that keep a close eye on food as it moves around the world in shipping containers. Globe Tracker’s sensors continuously record and transmit data on the container’s location, temperature, humidity, etc.
This kind of data is highly valuable in all supply chains, but it is especially valuable in perishable food supply chains. Innovators in business and government are going to increasingly adopt IoT solutions to address the complex problems of the 21st century, and providers of such solutions will increasingly innovate and drive IoT technology forward.
Why Invest in the Internet of Things (IoT)?
By all accounts, the IoT market is thriving, and there is good reason to think that even greater growth may be on the horizon.
According to a 2019 report by the International Data Corporation (IDC), global IoT spending in 2019 was forecast to reach $745 billion, a 15.4% increase over the $646 billion spent in 2018. IDC also projected that global IoT spending would surpass $1 trillion in 2022, with manufacturing, consumer, transportation, and utility industries accounting for a significant portion of the spending increase.
Adoption of IoT is happening worldwide and across industries at a rapid pace. Mordor Intelligence projects that the compound annual growth rate of the IoT market is 21% between 2020 and 2025. Internet-connected devices are also getting cheaper to produce and are becoming more widely available. McKinsey & Company projects that the number of internet-connected devices will increase to 43 billion by 2023, a nearly 300% increase from 2018 numbers.
Underlying all these positive numbers is an enormous potential boost that is somewhat difficult to quantify: 5G. Mobile carriers are currently in the process of deploying 5G (the fifth-generation wireless network) across the U.S. and around the globe. 5G provides considerably faster mobile connections and will, according to Qualcomm, “seamlessly connect a massive number of embedded sensors in virtually everything through the ability to scale down in data rates, power and mobility to provide extremely lean/low-cost solutions.”
The 5G rollout will take time, and as with current data coverage, not every location will get lightning-fast speed. Those locations that do benefit, however, are in for a potentially transformative period of IoT innovation.
How to Invest in the Internet of Things (IoT)
Despite all of this growth and potential, the Internet of Things remains a developing, high-volatility sector, meaning that it can make for a risky investment when bought directly. Rather, a search on Magnifi suggests that there are a number of other ways to profit from IoT innovation via mutual funds and ETFs that cover this fast-growing sector.
Unlock a World of Investing with a Magnifi Account
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the February 12, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Virtual Reality
Our addiction to screens isn’t anticipated to change anytime soon, but with the growth of virtual reality, how we relate to our screens is sure to.
The proof? Headset sales are booming. Over the holiday season, Facebook’s popular Oculus Quest virtual reality headset sold out and is now on a two-month back-order.
In other words, when it comes to virtual and augmented reality, the technology is ready and so are the users.
So, what exactly is virtual reality?
Virtual reality is a type of technology that “shuts out the physical world,” creating a completely immersive experience in digitally created “real world” or imagined environments.
This is slightly different from augmented reality, which adds digital elements to our real-life view. Think of Pokémon Go, for example, which digitally plants Pokémon characters around real-life cities and towns for players to physically go and find. That’s augmented reality.
What Can Virtual Reality Do?
Both virtual reality and augmented reality are changing the ways that almost all industries deliver goods and services to consumers.
First, and maybe first to come to mind for most people, is virtual reality’s place in the gaming world. The video gaming industry is anticipated to grow to as large as a $300 billion industry by 2025. Virtual reality will no doubt help to stimulate that growth, transforming the gaming world by dramatically changing the dynamics of how players relate to their games.
After all, games are no longer built like the old Nintendo or Atari platforms. New games allow players to be real participants in the action, and virtual reality is just the next step in this direction.
For instance, the much anticipated virtual reality game, Half Life: Alyx, is set to release a sequel more than a decade after its first iteration. Other highly anticipated virtual reality video game releases include The Walking Dead: Saints & Sinners, The Walking Dead Onslaught, and Iron Man. These games have a ready market and mountains of consumers that have or have yet to order their headsets.
Virtual reality and gaming, yes. But what about virtual reality and spas? Yes, it’s a thing.
The Four Seasons Resort in Oahu is now offering the world’s first multisensory virtual reality and wellness experience in what it calls the Vessel. And, it’s not alone. Spas across the U.S. now offer similar experiences in a device known as the Somodome, a self-contained meditation pod.
Virtual reality is challenging companies to reimagine how they engage consumers of all kinds. This includes retail, even though online shopping seems to be doing just fine without it. Consider virtual reality shopping. Soon you may be sipping coffee and exploring the various kitchen options from the comfort of your couch thanks to Ikea’s Virtual Reality Showroom.
Beyond consumer goods and services, virtual reality has huge potential to improve training for higher education and corporate entities alike. Walmart is on board, training employees with virtual reality programs that offer new hires the opportunity to experience specific customer situations. The military is also using virtual reality for training purposes, and even the Denver Broncos football team is using virtual reality as a tool for training new and injured players (quarterbacks specifically).
The technology also has the potential to be used for highly sophisticated simulations in the healthcare field. Emmanuel Hospice, a non-profit hospice company, offers patients the ability to leave their rooms with virtual reality-based therapy. Using the technology, one patient went on a virtual trip to Frederik Meijer Gardens and Sculpture Park, and another to Ireland.
The possibilities are endless and virtual reality technology is everywhere.
Why Invest in Virtual Reality
With all of these different applications, it should come as no surprise that the VR industry is set to grow rapidly. The global virtual reality market is anticipated to reach $120.5 billion by 2026, a dramatic increase from $7.3 billion in 2018.
And, the market is ripe for investment. As the technology advances, virtual reality is expected to play an increasing role in training and education, entertainment, retail, healthcare, and more.
Not only is the technology required for virtual reality improving, but the costs associated with it are decreasing. Quality virtual reality experiences require both a headset and a powerful graphics card. These two elements have big-name companies like Sony, Samsung, and Facebook, as well as lesser-known companies, competing for market share in each. As virtual reality becomes increasingly mainstream, these companies are poised to benefit.
Beyond these two primary technology elements, virtual reality is also primed to create new investment opportunities in the industries that adopt it. Whether it’s the next big game, the next big hospital training platform, or something we have yet to imagine, industry-specific virtual reality solutions are sure to create a buzz and further stimulate consumer adoption.
When it comes to virtual reality, opportunity abounds. You can invest in the technology itself, or the products, services, and solutions that it delivers.
How to Invest in Virtual Reality
Of course, virtual and augmented reality are high-growth, high-volatility sectors, meaning that they can make for risky investments when bought directly. Rather, a search on Magnifi suggests that there are a number of other ways to profit from virtual reality innovation via mutual funds and ETFs that cover this fast-growing sector.
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The information and data are as of the January 22, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Bitcoin
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Globalization is driving the economies of the world toward greater and more profound integration. People across the globe are now connected through vast, complex supply chains that span oceans and continents.
From the comfort of your home in the U.S., you can log on to Etsy and order a beautiful, handmade blanket from Turkey that will arrive at your door in a few weeks. You do not need to travel to Turkey to purchase the blanket, and the Turkish vendor is happy that their products are available to a global market.
The growth of these kinds of international peer-to-peer transactions is hindered by the fact that most countries each have a distinct currency that is government-controlled and that generally cannot be spent elsewhere. The process of transferring money between people in different countries can be quite complex as the funds need to pass through intermediary banks along the way. This complexity takes time and adds a cost to the transfer in the form of fees.
A little over a decade ago, an ingenious new digital currency known as Bitcoin was launched that sought to address these and other global currency problems.
An unknown individual (or group of individuals) going by the name Satoshi Nakamoto invented Bitcoin (and the underlying blockchain technology) and shared the idea in a groundbreaking 2008 paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System. The introduction of this paper states that: “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.”
Bitcoin relies on what Nakamoto refers to as “cryptographic proof” (hence, cryptocurrency) instead of trust. This proof comes in the form of Bitcoin’s blockchain ledger, which unlike the ledger of a traditional bank, is open to and shared amongst users in the Bitcoin network.
As a complete reimagination of the traditional currency and banking system, the transformative potential of Bitcoin is enormous. A decentralized digital currency that is free from government control offers users an entirely new way to move and make money.
For those interested in the investment potential of this innovative new currency, there are a few important points to understand.
What Is Bitcoin?
Bitcoin is a decentralized digital currency. It is not backed a government or issued by a central bank, and its value relative to local currency moves with the forces of supply and demand.
As of early 2020, there are roughly 18 million Bitcoins in “circulation,” with another 3 million yet to be added. New Bitcoins enter circulation by a process known as “mining.” People using powerful computers (“miners”) compete with each other to solve complex mathematical problems in a race to verify a new set of Bitcoin transactions. The first miner to do this correctly is rewarded with a certain number of Bitcoins.
Mining is a costly, energy-intensive endeavor, but it is not the only way to acquire Bitcoins – most people simply buy them. The process is relatively straightforward. Start by downloading a digital wallet, which is a kind of program that stores your Bitcoins and payment information. Next, simply go to the Bitcoin website (or an exchange where Bitcoin are traded), link your digital wallet, and select how much Bitcoin you would like to purchase. Once your payment goes through and after the transaction is verified by miners, you will be the proud owner of some quantity of shiny new Bitcoin.
As a decentralized alternative to the traditional banking system, Bitcoin can be bought and sold anywhere in the world where there is an internet connection.
This is an important point because traditional banking does not adequately function in many places across the world. Take Venezuela, for instance, where hyperinflation over the past few years has led to a rampant devaluation of the nation’s currency, causing food to become extremely expensive and widespread hunger to run rampant. Venezuela’s leaders staunchly refused humanitarian aid from outside countries and slapped heavy fines on incoming money transfers.
Desperate citizens turned instead to Bitcoin for help. Bypassing the incompetent Venezuelan government entirely, people from around the world sent Bitcoins directly to Venezuelan families in need.
Why Invest in Bitcoin?
As an investment, Bitcoin is undeniably in the high-risk, high reward category. Bitcoin prices have fluctuated wildly over the past several years. A single Bitcoin cost about $1,000 at the beginning of 2017, and by December 17, 2017, Bitcoin hit a peak price of about $20,000. You may recall that there was something of a Bitcoin “frenzy” during this price runup. Alas, the party was not to last, and prices fell sharply throughout 2018 before rebounding moderately in 2019 to a respectable $7,200 by New Years Day 2020.
Volatility aside, it is hard to deny Bitcoin’s outstanding performance when looking at the entire price history. According to data compiled by Bloomberg, Bitcoin posted gains of more than 9,000,000% since July 2010. As a point of comparison, the S&P 500 and Dow Jones each roughly tripled during the same period.
Past performance is, of course, no guarantee of future results, and radical changes are underway in the cryptocurrency market that will create heavier competition for Bitcoin.
Facebook is planning to launch a digital currency called Libra, and countries such as China, Russia, and Iran are looking to create their own forms of cryptocurrency to circumvent U.S. sanctions.
Bitcoin is the original cryptocurrency and has been around long enough to work through many of the kinks that have arisen. Interest in Bitcoin is likely to remain high for the foreseeable future, and it will continue to be a potentially highly-lucrative, if risky, investment option for adventurous investors.
How to Invest in Bitcoin
There’s no arguing the investment potential of Bitcoin and its related technologies. But the fact remains, with that high upside comes the risk of big downsides as well, and Bitcoin prices have been on something of a roller coaster over the last two years.
However, investing in a mutual fund or ETF that offers exposure to the Bitcoin market and its underlying technologies can be a way to temper some of this volatility. Although there is still no pure cryptocurrency ETF available, a search on Magnifi suggests that there are a number of funds available today for those investors interested in investing in the technology without buying Bitcoin directly.
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The information and data are as of the January 17, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Blockchain
It seems as though every time we turn on the news there are new stories about enormous data breaches.
There was the massive 2013 Yahoo breach in which all 3 billion user accounts were compromised, and then there was the 2017 Equifax breach that exposed the personal information of 147 million people.
Data breaches are becoming more widespread and impactful, with 2019 set to be the worst year on record. It is perhaps not surprising that, according to the Pew Research Center, 70% of Americans feel that their personal information is less secure than it was just five years ago. Businesses and governments are tasked with securely storing mountains of complex and highly-personal data, and they are beginning to turn to a novel technology known as “blockchain” to help.
Blockchain is a technology solution that solves some of the problems associated with data storage and security. When an organization is solely responsible for maintaining its database, valuable information may be lost in the event of a breach or disaster. A freak hurricane could damage vital data centers (as happened in 2012 during Hurricane Sandy), or an adept hacker could detect a vulnerability in a government’s website and hold critical data hostage (as happened in 2019 in Baltimore, Maryland). With blockchain, data is securely shared across a distributed network in which all parties have access. The nature of the technology is such that damage to one part of the network does not compromise the rest. For this reason, among many others, businesses and governments are turning their attention – and investments – to blockchain.
For those interested in the investment potential of this innovative technology, there are a few important points to understand.
What Is Blockchain?
According to the software company SAP, blockchain is most simply defined as a “reliable, difficult-to-hack record of transactions – and of who owns what. Blockchain is based on distributed ledger technology, which securely records information across a peer-to-peer network.”
The “block” in blockchain describes the data that is entered into the network, while the “chain” in blockchain refers to the chronological sequence in which blocks are entered. Data is approved for entry via consensus of other network participants, and once entered it cannot be changed. In this way, there is a complete, sequential, and verifiable record-keeping of the network’s data that is available to all participants.
At first glance, this may not seem like a revolutionary concept, but it is important to note that the decentralized nature of blockchain is highly novel and has far-reaching applications.
An unknown person (or persons) going by the name Satoshi Nakamoto invented the blockchain concept and shared it with the public in a groundbreaking 2008 paper about a proposed digital currency system. That currency system became known as Bitcoin, and the spread of blockchain technology gave rise to a vast ecosystem of other cryptocurrencies.
While most people only associate blockchain with Bitcoin and cryptocurrency, the technology has much broader applications across a variety of industries. For instance, logistics firms are turning to blockchain technology to modernize their supply chains. Danish shipping company Maersk recently launched a blockchain-powered logistics platform called TradeLens, which it says will provide improved visibility into the movement of shipments around the world.
Healthcare is another sector that stands to benefit tremendously from the adoption of blockchain technology. As any adult in the U.S. can attest, healthcare records are notoriously scattered from provider to provider. Implementing blockchain technology has the potential to make critical health data more accessible and secure while eliminating barriers that currently stifle communication between doctors, patients, and insurers.
Data is at the core of any modern organization, and it seems likely that blockchain will be an increasingly important tool in the modernization of data management practices.
Why Invest in Blockchain?
Blockchain is an extremely valuable technology with significant investment potential.
As noted by James Wester, Research Director at International Data Corporation (IDC): “Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase.”
IDC estimates that global spending on blockchain solutions will reach nearly $2.9 billion in 2019, an increase of nearly 88% from 2018. IDC expects annual spending to climb to $12.4 billion by 2022, with a 76% annual growth rate between 2018 and 2022.
Investment in private blockchain companies is also quite robust. In the U.S., for instance, investments reached about $1.1 billion in 2019 – a healthy figure considering recent corrections in cryptocurrency markets.
Big technology companies understand blockchain’s potential and are adjusting their services accordingly. Companies such as IBM, SAP, and Oracle offer blockchain-as-a-service to help businesses create their own blockchain networks. Companies that are prepared to offer innovative blockchain solutions are well-positioned for the coming changes to the data management landscape, and startups researching blockchain solutions are likely to garner significant interest from established companies. These market dynamics are likely to create a rich environment for outside investment.
Governments around the world are also taking notice of blockchain’s enormous potential. The U.S. Department of Homeland Security is investing heavily in blockchain startups because of the technology’s cybersecurity advantages in making digital systems more resilient. The Republic of Georgia recently partnered with Bitfury, a Netherlands-based blockchain technology company, to digitize and migrate the country’s land registry onto a blockchain-based network. Meanwhile, Chinese President Xi Jinping recently announced that China will make blockchain a top priority in the country’s new innovation push, a move that may galvanize more investment and research in the West.
In this space where both business and government recognize blockchain’s potential, savvy investors are well-positioned to capitalize on novel applications of this innovative technology.
How to Invest in Blockchain
But, despite all of this potential and recent growth, blockchain remains a very early-stage technology. It has only existed in its current form since 2008, and the industry that has sprung up around it is even younger than that. With that youth comes volatility, which investors are seeing in the prices of pure-play blockchain stocks. However, investing in a mutual fund or ETF that offers exposure to blockchain can be a way to temper some of this volatility. A search on Magnifi suggests that there are a number of funds available today for those investors interested in investing in blockchain technology without buying shares in the associated companies themselves.
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the January 9, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
3D Printing
At a time in the not too distant future, a patient suffering from organ failure may not need to wait on a donor transplant list in order to acquire a new, healthy organ. If researchers at Wake Forest University continue their remarkable progress, a doctor may be able to simply “print” a new organ for the patient. This treatment may seem straight out of a science fiction movie, but it is grounded in a real manufacturing process known as 3D printing.
3D printing has been around since the 1980s, but it is only in the past decade that the technology has really taken off. Recent advancements in material science and design software have propelled the technology into the mainstream, and an increasing number of innovative companies are adopting the technology to optimize supply chains and address complex problems.
Modern 3D printers are capable of producing objects from a wide variety of materials, and they can quickly print objects that are larger and far more complex than was possible only a few years ago.
3D printing is an essential component of Industry 4.0, a term described by Deloitte as the “new industrial revolution—one that marries advanced manufacturing techniques with the Internet of Things to create manufacturing systems that are not only interconnected, but communicate, analyze, and use information to drive further intelligent action back in the physical world.” 3D printing is helping to drive this new industrial revolution by democratizing the design and manufacturing process.
As 3D printing becomes more advanced and cost-effective, the technology is gaining greater exposure and novel applications are being pioneered left and right. For instance, international nonprofit New Story, in partnership with Texas-based digital manufacturing company, ICON, are using a massive 3D printer to “print” homes for impoverished residents in rural Mexico.
Many remarkable applications are being developed in the field of regenerative medicine, such as research at the University of Arizona where shattered bones are being healed by inserting synthetic bones created using a 3D printer. The applications of 3D printing are only limited by one’s imagination, and the transformative potential of the technology is staggering.
For those interested in the investment potential of this rapidly-growing sector, there are a few important points to understand.
What Is 3D Printing?
3D printing is a manufacturing process that uses digital designs to create three-dimensional objects. 3D printing is also sometimes called additive manufacturing because the object is created layer by layer, from the bottom up, by adding successive layers of material until the object takes shape.
This stands in contrast to the more common subtractive manufacturing process, in which an object is formed by starting with a large piece of material and removing excess material in order to obtain the shape of the desired object. A laser cutting out a specific pattern on a large metal sheet is an example of a subtractive manufacturing process.
3D printing has several key advantages over subtractive manufacturing. For one, 3D printing can significantly reduce the amount of time between the design and production of a new product. A 3D printer can quickly render a functional prototype for designers and engineers to test, which saves time and money that would otherwise be spent waiting on prototypes created using more traditional manufacturing processes.
Another key advantage of 3D printing is waste reduction. In additive manufacturing, only the material that is needed to create the object is used, while subtractive manufacturing wastes a significant amount of material in the form of scrap pieces and shavings that are removed to shape the object. Even if these scrap pieces can be recycled, there is an added expense in time and money to see it through.
Another enormous advantage of 3D printing is design complexity. 3D printers can produce an object with designs so complex and intricate that it would be impossible to produce using any other manufacturing method. This is not to say that 3D printing and subtractive manufacturing are mutually exclusive. To maximize supply chain efficiency, innovative companies utilize both processes simultaneously and at different stages of the manufacturing process.
Why Invest in 3D Printing?
The 3D printing sector is starting to grow rapidly.
According to a report by Deloitte, sales from large, public, 3D printing companies will exceed $2.7 billion in 2019 and surpass $3 billion in 2020. Deloitte predicts that this segment of the 3D printing industry will grow at about 12.5 percent in both 2019 and 2020, which is more than double the growth rate from just a few years prior.
To account for current growth and projected growth, Deloitte points to several recent industry developments, including large companies entering the market and driving innovation, along with dramatic technological advancements (more 3D-printable materials, faster print speeds, and a larger build volume).
The Deloitte report further notes that: “After decades of development, 3D printing has finally reached a period of sustained growth greater than most other manufacturing technologies. As with so many other new technologies, it is important to ‘think big, start small, and scale fast.’ The next few years are likely to see 3D printing become much more widely used in all sorts of manufacturing, from robots to rocket ships. The ripple effects on industries even beyond manufacturing may be profound.”
And the rise of Big Data analytics is only accelerating this trend, opening up vast new data sets that be used to design and optimize 3D models.
With respect to the 3D printing market as a whole, Mordor Intelligence expects the market to grow to about $49 billion by 2024 (up from about $10.50 billion in 2018) at a rate of about 29.50%. Mordor notes that North America currently holds the largest share of the market and is well-positioned for exponential growth: “With these series of investments, healthcare, aerospace & defense, industrial, and consumer product applications in North America are set to boom over the upcoming years.”
This growth potential is not limited to North America. The Asia-Pacific region is largely an untapped market at this point, and it is projected to grow at the fastest rate over the next several years.
How to Invest in 3D Printing
However, given the fact that 3D printing is a relatively new industrial sector and is still growing, investing directly in the companies that are leading the way can be risky. Rather, investing in a mutual fund or ETF dedicated to 3D printing can be a good way to gain exposure to this fast-growing niche without taking on the risk of a direct investment. According to a search on Magnifi, there are a number of funds and ETFs that access 3D printing.
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the January 2, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Streaming
The rise of streaming services over the past 10 years has radically changed how we consume television and movies. Lest we forget, there was once a time not so long ago when we had to make sure we were in front of our television set at a designated time in order to enjoy an episode of our favorite program. If you were the poor soul who missed the show, you would have to go around with your fingers in your ears as everyone around you discussed it until you had a chance to watch it when it re-aired later in the week.
With the steady increase in internet access and speed over the past 10+ years, we gained the remarkable ability to instantly stream a vast library of television and movies at any time from anywhere and from a variety of devices. Pioneering companies like Netflix recognized the transformative potential of streaming content early on; so early on, in fact, that they were widely mocked by the established entertainment industry not long before they utterly change it.
In one particularly ironic moment from the early 2000s, a former Netflix executive recalled how Blockbuster executives turned down their offer to sell the fledgling startup by laughing them out of the office.
Netflix is undisputedly the biggest name in the streaming game, but their competition is starting to get serious, leading to a showdown that some are calling the “streaming wars.” Heavy hitters in the form of traditional cable companies and content creators have finally caught on that the future of entertainment is streaming, and they have been working furiously to catch up with more established streaming platforms like Netflix, Hulu, and YouTube.
After years of work and months of hype, these heavy hitters are finally ready to debut what they’ve been working on. Apple launched its streaming service, Apple+, on November 1, 2019, Disney launched Disney+ on November 12, 2019, and HBO Max (Warner Media Entertainment) and Peacock (NBCUniversal) are slated for launch in early 2020.
These launches coincide with news from the Motion Picture Association of America that the number of streaming subscribers worldwide (613 million) has surpassed the number of cable subscribers (556 million) for the first time. The new streaming giants are going to slug it out in the coming years, competing for subscribers with archive depth and quality, as well as the allure of original content. Netflix has demonstrated time and again that a winning streaming formula is one in which viewers come to binge-watch old favorites, like The Office, and stay to nibble on attractive new offerings, like The Crown.
Streaming services have already fundamentally changed how we enjoy television and movies, and continued innovation is going to present savvy investors with incredible opportunities as the industry enters a period of extraordinary growth and upheaval.
For those interested in the investment potential of this rapidly-growing sector, there are a few important points to understand.
What Is Streaming?
According to PCMag, a streaming service is defined as: “An online provider of entertainment (music, movies, etc.) that delivers the content via an Internet connection to the subscriber’s computer, TV or mobile device.”
The service that companies like Netflix provide is referred to as Subscription Video on Demand, or SVOD. These companies generate revenue from monthly subscription fees instead of from advertising or pay-per-view transactions. Other companies (such as Hulu) use a tiered pricing structure in which lower monthly fees are offered in exchange for advertising in the form of commercials.
Streaming service companies depend on reliable, high-speed internet performance in order to deliver quality products to their customers — a fact so integral to Netflix’s bottom-line that the company now measures and publishes the internet speeds of internet service providers responsible for streaming Netflix content.
Why Invest in Streaming?
According to a May 2019 eMarketer report, the top U.S. streaming services companies generated about $19.9 billion in subscription revenues in 2018, while subscription revenues in 2017 totaled about $14.9 billion.
For its part, Netflix earned three consecutive 30% year-over-year revenue increases between 2016 and 2018, and looks to be on track for a fourth. The company’s share price hovered around $50 in January 2015, and by November 2019, had soared to about $315 per share.
It is much too soon to tell how things are going to shake out in the streaming wars to come, though some analysts believe that Netflix may be in real trouble as other serious competitors step in to take a bite out of the streaming market. Others point to the fact that Netflix spent $12 billion creating original content in 2019, has 158 million subscribers, and has, by far, the largest content archive of any streaming service.
According to a September 2019 Digital TV Research study, the number of subscriptions to streaming services companies is projected to increase by 91% – or 462 million subscriptions – between 2018 and 2024. It is important to note that much of this growth is expected to occur internationally (i.e., outside of the U.S.), and international growth has been a cornerstone of Netflix’s success thus far (62% of Netflix’s subscribers live outside the U.S.).
Other streaming services have a lot of work ahead of them in order to match Netflix’s international success, which includes overcoming complex regulatory and content requirements.
During the seven-year period between 2018 and 2024, Netflix’s revenue is projected to more than double from $15 billion in 2018 to $35 billion in 2024, while revenue from Disney+ is projected to hit $7.4 billion by 2024.
While it is too soon to say how the streaming wars are going to turn out in the long-run, it does seem likely that streaming services as a sector will remain a dynamic, high-growth space in which well-placed investments are likely to do well.
How to Invest in Streaming
However, as the full landscape of streaming entertainment is still shaking out, investing directly in these companies can be risky. Rather, there are a number of funds and ETFs that give investors access to this asset class with more diversification. A search on Magnifi suggests that there are a number of other ways to profit from streaming as a whole.
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the December 27, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.