"First they ignore you, then they laugh at you, then they fight you, then you win." Gandhi, despite decades of misattribution, didn't say that, but just because we can't pin the pithiness on an iconic figure doesn't make it entirely untrue. And right now, in the world of streaming video, the market is firmly in the "they fight you" stage against the pioneering powerhouse, Netflix (NASDAQ:NFLX). Seems like every media empire is rolling out its own streaming platform, as are tech titans like Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).

In this Motley Fool Answers podcast, cohosts Robert Brokamp and Alison Southwick have invited senior analyst Jason Moser into the studio to talk about the current situation in video streaming: which offerings look strongest, how they might move the needle on media company stock prices, where it all leaves traditional cable, and whether Netflix will still be able to win once all that rising competition slams into its content-aggregation business model. But first, in the "What's Up, Bro?" segment, Brokamp reviews eight things that everyone should expect to happen in a recession. (Spoiler alert: They're not all bad.)

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on Sept. 10, 2019.

Alison Southwick: This is Motley Fool Answers. I'm Alison Southwick. I'm joined as always by Robert Broseph Brokamp, personal finance expert here at The Motley Fool. Hello, Bro!

Robert Brokamp: Hello, Alison!

Southwick: On this week's episode, we're going to talk about the war of the walled gardens, by which we mean the growing competition in streaming video. Does it signal the end for Netflix? Well, it's probably not good. Jason Moser is here to help us decide. All that and more on this week's episode of Motley Fool Answers.

So, Bro, what's up? 

Brokamp: Well, I'll tell you what's not up: interest rates! They're not up! Did you know that last month, for the first time ever, the 30-year Treasury yielded below 2%? Historic low. You wonder, why is this happening? 

Southwick: Why is this happening, I'm wondering?

Brokamp: More and more concerns about the dreaded R-word -- recession. These days, if you took a survey of economists, about a third would say that they expect a recession at some point in the next year. What is driving that concern? Well, there's that trade war that's been going on. A recent study from the Federal Reserve estimates that it could actually knock about 1% off GDP up through 2020. Plus, we've had a pretty long expansion. Unless something happens over the next few months, this will be the first decade since the 1850s -- when they started paying attention to such things -- that we didn't have a recession. 

How is that reflected in the bond market? Well, people fly to the bond market for safety. It drives down rates. In particular, these days, longer-term rates are actually lower than shorter-term rates. That means the yield curve is inverted, which has historically been a pretty accurate precursor to a recession. It usually takes a while, almost a year. But when you see an inverted yield curve, historically, chances are, you're going to see a recession in the next year or two. 

Southwick: You sound so smart when you say, "inverted yield curve." I think I'm just going to start dropping that into conversation. Don't you think, Rick? Doesn't he sound like smart? [laughs] 

Brokamp: That said, there have been a couple of false positives, where there was an inverted yield curve and there was not a recession. Regardless, at some point, there will be a recession. What does that mean for the average person's finances? We're going to talk about eight things that usually happen during a recession.

Southwick: Whoa, eight! Let me get comfy!

Brokamp: No. 1: stocks drop. Generally speaking, they start to drop about six months before the recession. According to the Capital Group, which is the folks behind the American Family of Funds, they start to rebound about six months into a recession, and they recoup their losses over about 18 months. So, usually, it's not too bad. The average loss during a recession, depends on how you look at it, but it's like 20% to 30%. Some have been very shallow. That said, the last two recessions we experienced -- the .com crash and the Great Recession -- were declines of 50%, and it took more than five years for the stock market to recover. Basically, this is why we always say that any money you need in the next few years should not be in the stock market. 

No. 2: rates also drop. That's already started. They could continue to go lower. The Federal Reserve is going to meet in a week. Everyone expects them to drop the Fed funds rate by 25 basis points. Maybe 50 basis points. Around the world, there's this phenomenon of negative interest rates. Hasn't happened yet in America. But Alan Greenspan recently just told CNBC it's only a matter of time, so rates could keep dropping. What does that mean? Ideally, you could refinance your home, get a lower mortgage. Good time to refinance your car loan, student loan. Hopefully, your credit card rates will also go down. So, that's actually pretty good news. 

No. 3: bonds go up, depending on the bonds. Generally speaking, when rates go down, bonds go up. We've seen that this year. Bonds have actually made almost 10% so far in 2019, which is a pretty extraordinary return for bonds. In 2008, when the S&P 500 went down 37%, bonds went up 5%. The only thing is, it does depend on the type of bonds. Treasuries do well. Corporates do generally OK, but it depends on how far you go down the credit rating. When you're looking at junk bonds, they do not do so well. They lost 20% in 2008. So, the more you are concerned about a recession, the more you should keep your bonds to Treasuries or highly rated corporates, or maybe just play it safe with cash.

No. 4: the price of your house actually might go up. I think a lot of us were stung by the Great Recession, and that was really the first time we saw a nationwide drop in home prices. The truth is, when you look at recessions historically, home prices actually hold up well. There was a study by Mark Hulbert, and he published it in MarketWatch, where he found that when you look at the Case-Shiller Index of home prices, it actually does better during stock bear markets than it does during stock bull markets. Historically, in most cases, your house is actually a good hedge against a recession, against inflation, and a stock market drop. However, during the Great Recession, what we saw the last time, that was not the case. There will always be outliers. But generally, houses hold up pretty well. 

No. 5: inflation generally goes down. This is the upside of downtrodden economy. Prices generally do go down. What does that mean for you? Well, it's actually a really good time to make a major purchase, buy a car, get an appliance. All those folks are out there trying to get consumers to come in and buy something. If you have the means and you're looking to make a big purchase, a recession is actually a good time to do it.

No. 6: employment goes up. According to The Washington Post, the unemployment rate has risen 2.4% on average during the 11 recessions since World War Two. It goes up slightly. Of course, sometimes it can be worse. What was the worst since World War Two? It was the last one, the Great Recession. Unemployment went from 5% to 10%. On average, people were out of a job for six months. That's a good frame for what we talked about, the emergency fund, how much you should have. The way to prepare for this, of course, is to have the emergency fund, but also to keep your debt levels manageable. That's where people get in trouble -- they have high debt levels, they lose their job, and they can no longer pay the mortgage or anything else, so they lose the house, or they lose the car. So, have the emergency fund, and keep your debt levels manageable. 

No. 7: employers reduce benefits. Even if you are fortunate enough to remain among the working, chances are something will get reduced. You may not get a raise, you may not get the bonus, your 401(k) match might get eliminated. That's happened here at The Motley Fool, then The Motley Fool kindly made up for it retroactively. That usually does not happen. You'll see stuff like that. You may not have a fancy holiday party at the end of the year. Might be in the conference room.

Southwick: We've done that too here at The Motley Fool. 

Brokamp: Potluck instead of a fancy party downtown. Even if you do manage to keep your job -- and most people will -- you do have to expect that you'll probably have to tighten your belt a little bit some way or another.

No. 8: in a recession, stocks do go back up, and the economy eventually recovers. For those who have the cash on the sidelines, and the guts, buying stocks in the middle of a recession can actually be one of the best investments you ever made. But you can't wait until the recession is over, because the stock market begins to recover before the overall economy. But, history has shown us, the economy will recover, you will be able to go back to the fancy holiday party at the hotel downtown, and stocks eventually will recover and reach higher highs. 

Southwick: On that last point, that is where I think some listeners hear, "I should try to time the market," as opposed to, "I should just be always in a good financial position where I can continually put money in and invest it so that I can be investing in the lows and the highs." We get questions all the time about people trying to time the market.

Brokamp: Right. It's very difficult to do. I would not recommend anyone do that. What I recommend is that someone always have a little bit of money out of the stock market so that A, you either have it as an emergency fund if you need it; or, it's the dry powder that you can use to buy stocks when prices are down. 

Southwick: Is that what happens at the Brokamp household? 

Brokamp: Generally what happens at the Brokamp household.

Southwick: Have you been able to do that in the past? 

Brokamp: Yeah, yeah. But there's a cost to that right. Having some money out of the stock market has cost us during this expansion. Like many things related to margin of safety, whether it's insurance or having some cash on the sidelines, some of it is just peace of mind. I just feel better knowing that I have that optionality.

Southwick: Is that what's up?

Brokamp: That, by the way, is what's up.

Southwick: It is an amazing time to be a consumer of content. So many options! So many shows to recommend to coworkers that they don't actually end up watching! How are you enjoying Derry Girls, Robert Brokamp?

Brokamp: I watched one and I quite enjoyed it.

Southwick: OK! That makes me feel better! It only took me a few times of recommending Derry Girls

Jason Moser: I was having that conversation yesterday with Mac Greer, telling him about all of these latest and greatest HBO shows that he needs to watch. I'm sure he'll probably get to one of them. At some point.

Southwick: Maybe.

Moser: It's just too much.

Southwick: It's too much. There's so much, and it's only getting crazier. That, of course, was Jason Moser piping, by the way.

Moser: Sorry!

Southwick: He's joining us today because this year, and also closing out the year, there's going to be a lot more streaming platforms available, which is going to put some more pressure on companies that have been longtime recommendations at The Fool here like Netflix. So today, we're just going to talk about it. We're going to talk about some of our options when it comes to streaming video and investing in these kinds of companies. And really, how does it look for Netflix? [whispering] Not good!

Moser: [laughs] I mean --

Southwick: We can get to it later. I don't know. From the research I did, every article I read, I was just like, [pained sounds]. But, I don't own Netflix.

Moser: I'd say it's a more challenging environment today than it was five years ago.

Southwick: For everything, for everyone, all the time. Let's start off by talking about Disney (NYSE:DIS). Of course, Disney earlier this year -- what, a month ago? Two months ago? -- announced Disney+ was coming. Let's head to the tale of the tape. Disney+ is going to launch on November 12th, so it doesn't have any subscribers to talk of yet. 

Moser: That's not true, actually. I'll explain. But, keep going. 

Southwick: OK. Content will include Disney, Pixar, Marvel, Star Wars stuff, 20th Century Fox movies, 25 original series, also National Geographic. It's expected that Disney+ will have about 7,000 TV episodes and 500 films. Iger says eventually the whole vault -- yes, the whole vault! -- will be available on Disney+. How much is Disney going to spend? Well, they're going to spend about $500 million in original content for the service, but, obviously, they're spending a lot of money on content all the time everywhere. The Mandalorian alone, one of the Star Wars TV shows, is going to cost $100 million. That $500 million might be a lowball offer if just one of the original series is costing that much. The price will be $69.99 a year, or about $7 a month. You can also do a bundle with Hulu, which Disney has recently taken control of, and also ESPN+, and that will be $12.99 a month. 

That's the tale of the tape for Disney+. I think, as both a lover of Star Wars and a parent of a six-year-old girl, we are going to be running, not walking, to sign up for Disney+.

Moser: I fully agree with you. As a parent of two older girls -- we've got a freshman in high school and an eighth grader --

Southwick: Wow, I can't believe your oldest is in high school!

Moser: I know! Every birthday they have reminds me that I had one, too. There's a lot of content that they want to watch on Disney+ as well. I think they've done a good job of building out this offering that is going to scratch an itch for everyone.

Going back to the subscriber account that you talked about a little bit earlier, Disney did something very clever at the D23 conference this year. They release all of this information on what's going on in the Disney universe. Of course, D23 had much to do with Disney+ and the content that's coming out, and they offered pre-subscriptions. You could sign up in advance. And not only that, they said if you sign up for two years, we'll give you the third one for free. So they really were working on pulling the levers to get those subscribers in their early. By all accounts, it's worked out pretty well. It's certainly overloaded the servers and shut everything down for a little while until they get back in there to fix it. But it does sound like a lot of people are as enthusiastic as you and me, and I would assume Bro's probably pretty enthusiastic as well.

Brokamp: Very much so about Star Wars. My kids are probably too old for the Disney stuff. 

Moser: How about the High School Musical series?

Brokamp: I might just have to convince them that they still like Disney just enough so I can get the Star Wars stuff.

Moser: ​ This is where I think they've been so clever with this whole thing. Hulu has obviously been around for a while; it's had a few different iterations. What they've done with Hulu is actually pretty clever with this Hulu Live offering. It's essentially cable light. It's a much more affordable package than your traditional cable package. It really focuses on the content that people want to see. And it's a lot easier to use and to sign up for and manage. So, you've got Hulu, you've got Hulu Live. Now you've got ESPN+. A guy like me, I went to Wofford College, very small school, we had one heck of a year last year for the basketball team. But really, most of the games for Wofford, for example, are going to be on ESPN+. You get that bundled together, I'm there. And at $12.99, it's a no-brainer. I'm doing myself and my family a disservice if we don't sign up for it. 

Brokamp: It's abuse, really. 

Moser: It really is. It's like a Costco membership and Amazon Prime. If you don't sign up for it --

Southwick: Are you even American?

Moser: Exactly, what in the world is going on? This all goes back to, it's been a while we've been talking about this stuff for a while, what Disney was planning on doing. Now it's coming to fruition. And man, it really looks like it's going to be something pretty impressive. November 12th being the drop date for Disney+. It's not all going to hit at once. That's going to be neat. They're going to build this service out over the course of many, many years, adding content and, believe me, raising prices along the way. And that's really the genius of starting this price point so low. It's going to bring a lot of people in, and then they're going to get in there and see how much they like it. And then, over time, they're going to be able to bump those prices up slowly but surely, and convince you that the value proposition makes sense. I think that's one of the main reasons why we're all pretty optimistic right now.

Southwick: What happened with the stock price? How's Disney's share price been doing? We bought a while ago, and I feel like I've just been waiting and waiting for Disney to take off because of the optimism I have in the company, and it just hasn't.

Moser: The problem with Disney, Disney's stock is not going to be something that just takes off overnight. Part of that is because a lot of it's already known. There are not a lot of secrets there, right? We understand what the business is about, the different ways it makes its money. Now, I do think that we've seen over the past several months, particularly 2019, it's been a pretty good year for the stock. We've seen a lot of certainty come down the pike here with all of these new offerings that they're bringing out. We're starting to see a little bit more clarity as to what the future holds. And it's exciting. So we've seen a little bit of enthusiasm in the stock price. But really, Disney is one of those stocks where you have to look at the five and 10-year holding period. It's one of the first stocks that my daughters bought, for example. I think they've owned it ever since 2012. It's up about 150% or something like that. But you would never know it unless you actually went in there and really calculated it out. It's just slowly but surely winning the race.

Southwick: One of the big themes, of course, around streaming video is the whole idea that content is king. And boy, Disney is king of content.

Moser: They are, you're right. The advantage they've always had is that they own all of this IP. And the IP that they didn't own, they went out and acquired it, whether it was Marvel or Pixar, or most recently Lucasfilm. They've got something for everyone. 

Southwick: The Simpsons!

Moser: And now, 21st Century Fox. They have so much in that regard. That is going to be something that really fuels this engine for a long time to come. Now, on the flip side, you see something like Netflix, Netflix was never really the content king. They were just getting content from everywhere else and basically aggregating it. Where Netflix really scored was on the distribution side. They saw early on the power of the internet and how to build out an internet TV service. You have content being king on one side. Is distribution king on the other? I don't know. I like to say, if content is king, then distribution is queen. And really, we all know that behind a good king is a better queen. You have to have both, is really ultimately what I'm saying here, Alison. And Disney now is going to have both.

Southwick: What's harder, to consistently create good content, or to create a platform where people can reliably watch video?

Moser: I think once you nail the platform, you've nailed the platform. I think to build out sustainably good content that keeps people coming back for more is probably a little bit more difficult, particularly if you don't own it and you have to figure out how to create it. That's going to be where I think Disney has a leg up there. We've seen with Netflix getting into that original content game. They've had some hits; they've had some misses. HBO has been doing that for 40 years plus, it seems like. They've certainly got it down to a science. They produce a lot of great content as well. But even they're not immune to the occasional miss as well. Distribution, I think for the foreseeable future, is going to be pretty much as we see it today. It's mobile, it's internet, it's catering to where we are and whatever we want to watch it. So now it is going to really be more about the content. It certainly looks like Disney has got the advantage there. 

Southwick: Yeah. Alright, let's move on and talk about Apple TV+. Plus is the new "I." Everything is plus. Something we're probably less excited about?

Moser: I would say "less excited" is probably an understatement. I'm not quite locked into the value proposition yet here. I admire Apple for a lot of reasons. I do feel like they really dropped this TV ball so long ago that there's really no getting it back. Now, let's be clear, this is a company that could just stamp its logo on a brick and probably sell three million of them, no questions asked. There are going to be plenty of people out there that love Apple that'll think this is the greatest thing since sliced bread. They're going to justify it however they're going to do that. I don't see it yet. That's just from the Apple TV interface. 

From the content side, we've seen at least one show that they are going to be bringing to the market. It's some newsroom type Morning Show drama or whatever. I guess that's fine, whatever. But the content discussion we're having here, I think Apple is going to discover very quickly that it's difficult to do. It's difficult to do sustainably. Even if you have a lot of money. It costs a lot of money. You need to be careful getting into this. You need to understand the strategy and why you're doing this because you can get caught spending a lot of money on that content really fast, and you can go down one of those rabbit holes that's very difficult to get out of. 

Frankly, I feel like this is not where Apple should even be bothering. I don't even see why they're bothering with it. I almost feel like they're doing it because we expect them to do it, kind of like with the Watch or with this credit card. To me, it's eh. Whatever.

Southwick: Well, they've got enough money. They might as well just throw some money at this, right? So, yes, Apple is only investing -- "only" -- $2 billion a year in original content. It includes an Oprah show, a Spielberg thing, the aforementioned Morning Show kind of comedy that you talked about, with Steve Carell and Jennifer Aniston. Big names. Big names at the launch. But, I don't know.

Moser: I don't know what audience it's really trying to capture. Oprah...

Southwick: It's Oprah!

Moser: Yeah, it's Oprah. She carries a lot of sway there. But she's worked for some time on her own network, the Oprah Winfrey Network. That was never anything that really changed the world, either. At some point or another, people's flame kind of flickers out. I feel like Oprah probably is closer to that than others. But, again, you have to start somewhere.

Southwick: It's rumored to eventually cost $9.99 a month.

Moser: Doesn't sound like a very compelling price, particularly when you compare it to Disney and what you can get from all of those three different channels. And really, I say three channels -- ESPN, Disney+, and Hulu -- but remember, Hulu is far more than just one channel. Hulu is an aggregator in that Netflix sense. Also, they have their own original content, and they brought some good stuff to market there as well. From a value proposition standpoint, the Disney offering certainly seems to be a lot more compelling than the Apple one.

Southwick: We also have coming down the pike, which we're not going to dig into, HBO and Warner Media are going to launch a new streaming service. NBC Universal is launching a streaming service in 2020. Viacom and CBS apparently announced a merger, so they're going to be doing something, too. It's really becoming a walled gardens, as I heard someone reference it. Everyone has their own walled garden of content, and you've got to pay to get into it.

 Alright, let's talk about Amazon really quick. Tale of tape. Amazon Video. Amazon is in a unique position, considering this is kind of like, "Eh, here, we'll throw some video content at you. Why not?" Amazon Prime has about 100 million members. Content on Amazon includes a fair amount of originals like Marvelous Mrs. Maisel and Fleabag, HBO series that are more than a few years old, and a random smattering of stuff. Amazon spent $6 billion in 2018 on original content, and plans to spend another $6 billion in 2019.

Moser: It's a unique strategy. On the one hand, they're trying to convince us that their Amazon Prime video offering is strong on its own. But then, you mentioned the HBO shows and other different networks shows, where they'll offer you perhaps a season or two of one of their best shows. And the idea is, maybe they can talk you into signing up for a subscription for something like HBO or Showtime, and getting that subscription through your Amazon interface. Similar to Hulu in that regard. Hulu's got the same kind of thing. I definitely don't blame them for doing that. At the end of the day, most people, once they've joined Amazon Prime, they're going to stick with Amazon Prime. They're going to see that video product as just one more value-add. It's not about offering up the best and most award-winning shows that they possibly can. It's about giving the customer something that makes them feel like they're getting value out of that overall relationship. So, for Amazon, it's a much different end game. I think that goes to show the value in being more than just a one trick pony when it comes to this video streaming game or wars, as some might want to call them. When you're a one trick pony, you've got a lot more on the line. Your successes matter a lot more, and so do your flops. But, when you have other ways to make your money, other things that you're doing with the business, you can be a little bit more experimental and try new things, and get away with it when it works, and make us forget about it when it doesn't.

Southwick: Speaking of one trick ponies, it's time to talk about Netflix.

Moser: Had to happen eventually.

Southwick: Here's the tale of the tape. 60 million subscribers in the U.S., and 150 million-ish worldwide. Of course, the content includes a lot of original programming, and also a lot of licensed stuff. Licensed by people like Disney and NBC. [groans] Oy. That's what's keeping Reed Hastings up at night, huh? The cost varies, but most people pay about $13 a month. 

I thought this was interesting -- apparently, everyone already knew this, and I'm the only one who didn't know this -- even though Netflix spends $12 billion to $15 billion on original content --

Moser: It's about $15 billion annually now.

Southwick: -- actually, what most people are watching is The Office, Friends, and stuff that's licensed.

Moser: Yeah. It does sound like the data supports that. I can tell you just from our household of four, The Office probably gets the most play on our Netflix subscription as compared to any other show on there. Content is interesting in that everybody's got an opinion, right? Content is art, at the end of the day, and everybody has an opinion on art. I look at Netflix, and I personally think, for me, the content, I don't think it's all that great. I'm more of an HBO guy, always have been, I think they have better shows. There's an occasional Netflix show I watch. But for a long time, Netflix was really the only player in the space. They defined this space, they invented it, and they've ruled it forever. You can't take that away from them. I think that what we're seeing now is a natural consequence of more competition entering the fray. And I think Netflix is going to have to think about how they are going to change their strategy a little bit. They're already making some adjustments. They're focusing a little bit on spending less on content; instead of trying to just throw this big wide world of a million different shows out there, have a little bit of something for everyone in the world. I think they're trying to be a little bit more thoughtful about the content that they make, and make a little bit more quality stuff that attracts an audience similar to something like what maybe HBO does. They are looking at, potentially, instead of releasing every show at once, releasing them in batches, like three or four shows at a time over the course of a month or something, so that the shows can live a little bit of a longer life. You were talking about The Mandalorian, $100 million. You think about how much money you spend on some of those shows, some of those series -- you do 10 episodes, and you drop them all at once, you have people watching the entire series in the matter of a day, and then it's gone. It's over. Not only is the series over, but people aren't talking about it. You need to figure out a way to draw that conversation out. So I think Netflix is looking at trying to do that. 

They seem to be very committed to never introducing advertising to the platform. That was a question that was brought up in the most recent earnings call. I think that that's the right thing to do. I think that if they ever tried to bring advertising, it would run counter to what Reed Hastings has been talking about all this time, in producing this experience that's not cluttered by it. It's interesting on their shareholder letter, I noticed this -- Hastings said, "Like HBO, we are advertising free." That's true to an extent. But remember, HBO is owned by AT&T. AT&T is not advertising free. There's a big advertising revenue component to AT&T's business. So HBO and Netflix really are not playing the same game from that perspective. HBO can hide behind the big corporation. Netflix, unfortunately, can't. And I think the questions regarding their finances are fair. They have a lot of money that they owe. They're going to have to keep paying a lot of money going forward.

Southwick: $4 billion in debt in the last year.

Moser: And they have over $18 billion in content obligations right now. They're going to have to continue to pay a lot of money in order to develop new content. And, oh, yeah, by the way, a lot of that stuff that they've built this business on with the Marvel content and whatnot is now leaving because of Disney. 

There are a lot of questions as to Netflix for investors. I think personally, Netflix is always going to be a mainstay. It's going to be a staple of people's streaming subscriptions. I think people are always going to subscribe to it because it's a great value proposition. Now, as an investor, I think you have to be asking the question, how much more can they raise prices? I don't know that they can raise prices a whole heck of a lot more if the content is going to be what it is. To put some numbers around that, if worldwide they have around 160 million subscribers today, if they increased that just $2 per month -- seems pretty reasonable, and it's probably where people might start taking notice -- that's $320 million per month. Around $3.8 billion per year. That money has already been spent. And that's just a hypothetical. But that $3.8 billion doesn't even come close to continuing to fuel that engine. So, you can see the challenges that they have on the content front. That's why I say, for investors, that's one of the things you have to keep in mind there. I think it's going to become for Netflix more about how much more can they raise prices; less about how many more subscribers can they add.

Southwick: I saw an interesting quote in Recode talking about all these new streaming services coming out. It said, "If you want everything, you'll need to get Netflix and Hulu and NBC Universal's thing and AT&T's thing and Disney's other streaming service," and it's funny, because we got to this place, I think, because we all wanted to cut the cord. But now we're spending so much money! [laughs] 

Moser: What was the point of cutting the cord? It was convenience, it was getting what you wanted.

Southwick: "I'll only pay for what I want!"

Moser: It was paying less. You're paying the cable company $200 a month for all of this crap that you never watch. And then you're beholden to the cable company with this box in your house. And if it breaks, or God forbid, something happens, then you have to deal with the cable company! The over the top movement here has helped from a lot of a lot of perspectives. Now you don't have to worry about the cable company. And that's great. But the cost argument has disappeared more or less. Like you were just saying, if you want to watch all of your stuff, basically, now you're getting close to that same $200 cable bill you were paying before.

Southwick: What I need is for someone to disrupt delivering internet to my house. I still have to pay Comcast a ton of money every month just to give me internet so that I can then get all these other streams.

Moser: It's a fair statement for you to say something like that. I think people feel the same way probably about Verizon. We get our internet from Verizon. When we moved to a new house a few years ago, I told Verizon to cancel my cable, I just wanted the internet. Of course, they tried to offer me cable for basically free and I turned it down because I don't want to deal with that. The less I have to deal with them, the better. But slowly but surely, they are raising the price on the internet. Therein lies the value of being the company with the infrastructure that delivers that so, so valuable wireless connection. 

Southwick: Gotta have it!

Moser: They have a big leg up in that. Whether it's Comcast or AT&T or Verizon, having that infrastructure is so valuable. Again, those are companies that exist for investors. They can be great investments. They're not stocks that will double overnight. But you see companies like that, they're able to pay out really nice dividends over the course of time because there's a level of certainty to the business model. What they're providing us is really what is making this earth turn more or less at this point. So, they can continue to offer up nice dividends without having to worry so much about the debt levels, because they've got a pretty reliable revenue stream. So those can be good investment ideas, as long as you understand the purpose they would serve in your portfolio. It's more of a slow and steady dividend payer that you want to hang on to for many, many years to really realize the effects.

Southwick: What's your bottom line thoughts, as we enter this exciting war in the battle for our eyeballs?

Moser: My bottom line thoughts?

Southwick: I don't know. Sum it up for everybody.

Moser: My bottom line thought is, beyond just video streaming, I think entertainment has turned into a market opportunity that is one that investors cannot ignore. Five years ago, seven years ago, we were just talking about Netflix and that being the future. That future is now. We're seeing a lot of competition in the space on the video streaming front. But we're seeing so much more happen, whether it's Amazon trying to bring hardware into your house, or Apple trying to bring hardware into your house, Microsoft developing a gaming platform. We're seeing these big tech companies trying all of these new things because they're all competing for our attention. There are a lot of different ways to invest in it. I think that's the bottom line. Try to step back and see the entertainment industry for what it is. It's much more than just video streaming. We're talking about everything from the technology, to the delivery of that technology, to the content behind the technology. We've got an environment now where gambling is becoming legalized virtually everywhere. I think it's just a matter of time before it's everywhere, and gambling is legalized. That adds a new dynamic to sports. Advertising is a tremendous driver in the entertainment industry as well. A lot of different ways to invest in advertising. That, I think, is the ultimate takeaway. Investors need to look at entertainment as a massive opportunity. Identify the different pillars that are really driving that entertainment industry, and start figuring out ways to invest in those for the long haul.

Southwick: Which is why we're going to have you back on the show at some point here to talk about another component of that which you mentioned -- sports, e-sports, video games, all of that.

Moser: There's all sorts of stuff to talk about.

Southwick: A lot to unpack there. It's crazy what the kids are looking at these days. Alright, Jason, you want to stick around for a little trivia? See how smart you really are?

Moser: Well, I can tell you, I'm not that smart. But I will stick around. 

Southwick: We talked a lot about a number of video streaming platforms and companies. One we didn't talk about because I don't really understand it, because I'm old, is YouTube. Obviously, I get YouTube. I know what it is. I understand it. I don't think I watch nearly as much YouTube as the kids watch these days. So, what we're going to do here is, I'm going to ask you some trivia questions about YouTube and see what you know. Did you know that in an average month, eight out of 10 18-49 year olds watch YouTube?

Brokamp: What does that mean? They watch a short video?

Southwick: Anything. They just watch it. 

Moser: I believe it. Listen, I posed the question to my daughters. You have YouTube and Netflix. I'm going to take one away from you. What's the one you want to keep? And they both said, without even hesitation, YouTube.

Brokamp: I could totally see that.

Southwick: It reaches more 18 to 49 year olds than any broadcast or cable TV network as well. Let's see how much you know about YouTube, the thing that kids are watching.

Moser: I watch it a little bit, too.

Southwick: Who doesn't? Who doesn't watch YouTube?

Brokamp: But it's more, I'm curious about this one thing, and I look it up, usually while I'm at work, as opposed to going home, getting a glass of chocolate milk, and pulling up YouTube.

Southwick: Right, definitely. It's like, "I need to learn how to do drywall. I'll watch a video on drywall."

Moser: It's much more educational. I use it a lot for painting and home repair stuff. For me, it's more of an educational thing.

Rick Engdahl: You guys are old. Drywall? Painting? Come on!

Southwick: [laughs] True.

Moser: Watercolor painting, not painting the house.

Brokamp: That's right. Jason's very talented!

Southwick: He is a talented water colorist.

Moser: Although, I will say, I just recently got done painting our deck, too. I guess it goes both ways.

Southwick: Alright, first question. This is multiple choice. What is the founding story for YouTube? Is it A: frustration on the part of the founders at not being able to track down online video of the Janet Jackson Super Bowl wardrobe malfunction? B: inspired by Hot or Not -- remember that website? -- to be a video dating site? Or, C: created after the founders were frustrated about not being able to share videos they took at a dinner party together?

Moser: Wow. I would have a hard time believing the Janet Jackson thing as the founding story. I am going with B. The dinner party thing just sounds too cheesy. 

Brokamp: I'll go with the dinner party.

Engdahl: Janet Jackson. 

Southwick: [laughs] Here's the thing: you're all kind of right. There are three founders: Chad Hurley, Steve Chen and Jawed Karim. They knew each other from working at PayPal, which is interesting. Hurley and Chen say that it was inspired by a dinner party. Karim says that it was actually inspired by wanting to see that infamous... can I say "nip slip" on the radio?

Brokamp: It's a podcast! We can say whatever we want!

Southwick: Chen later admitted that the dinner party story was a more marketable version of the actual origin story. [laughs] So, you're kind of all right.

Moser: Good to know!

Southwick: And, it's true that the first iteration for YouTube was to be called "Tune in, Hook up," an online video dating website.

Moser: It just gets better and better!

Southwick: I know!

Moser: Faith in humanity is just rapidly dropping.

Brokamp: The internet, it brings out the best in all of us.

Southwick: Doesn't it? Alright -- closest without going over, how much did Google pay to acquire YouTube in October of 2006?

Moser: I believe it was $1 billion.

Brokamp: I think it was higher. I'm going to say $5 billion. 

Moser: Maybe it was.

Engdahl: $3 billion.

Southwick: I thought you were going to say $1. Actually, $1.65 billion. Considering that analysts estimate that YouTube's ad revenue is around $15 billion, that's not a bad deal!

Moser: Not a bad deal at all, especially when you consider all of the ways they can use it, from gaming to advertising to music, entertainment. Man, YouTube is a powerful engine. 

Engdahl: Jason, you probably recall -- as I recall, it was not viewed as a really smart move by Google at the time.

Moser: At the time, everybody was thinking, "What? Are you kidding me? That's a lot of money for that." No one could see around that corner. Lo and behold, the internet and mobile technology took off, and here we are.

Brokamp: I think it was Mark Cuban who said it's basically a site for copyright infringement and cat videos.

Moser: [laughs] He's not totally wrong!

Southwick: [laughs] And we love it!

Engdahl: He just didn't realize how valuable that is.

Southwick: Yeah! That's a pretty good plan. As a side note, for anyone wondering what the current plan is with YouTube, they were creating some original content, but now, Google/ Alphabet is like, "Nah, we're not going to go down that path anymore. We know ad revenue; we're just going to do that."

Moser: It's hard to do. They captured lightning in a bottle with that Karate Kid thing. But even that lived a very short life.

Southwick: That's the only show that I was told was actually good.

Moser: They just recognized, it's not easy to do.

Southwick: You might as well lean to your strengths. If your strengths are selling ads, do that. OK. What famous soccer player was the first person to reach one million views on YouTube?

Moser: Famous golfer?

Southwick: Soccer player.

Moser: Golfer? I don't know much about soccer. Is it Diego Maradona? 

Brokamp: I'm going to say Mia Hamm.

Moser: I don't know.

Engdahl: Messi?

Southwick: Ronaldinho. Did I pronounce that correctly?

Moser: Ronaldo?

Engdahl: Roll your R's a little more. 

Southwick: It was a video produced by Nike of him doing some soccer tricks, like dribbling and bouncing it around, in October of 2005. The first to reach one billion views was Gangnam Style.

Moser: I was going to say Pelé.

Brokamp: That was my first thought, too! That really dates us!

Moser: Really shows our age!

Brokamp: I wish it were Mia Hamm.

Moser: Kids are out there like, "Who?"

Southwick: According to Forbes, the highest earning YouTuber is a seven year old boy named Ryan who unboxes and reviews toys. Again, closest without going over, how much does Forbes estimate he made in 2018?

Moser: I will say, I've actually seen this toy unboxing phenomenon. It is hard to get a grip on. But I feel like he's bringing in millions doing this. I'll say $3.2 million or something like that. 

Brokamp: I'm going with $1. 

Engdahl: I'll go $10 million.

Southwick: $22 million!

Brokamp: [laughs] Oh, my God!

Moser: It's insane, man!

Southwick: I tried to watch some of the videos, and it's basically this kid just playing with toys, and then sometimes he does stuff with his mom. 

Engdahl: Has Hannah watched it?

Southwick: No. We don't let Hannah watch YouTube. Maybe there's some parental controls that I need to put on it, but there's just been times when she started off watching an Elsa video from Frozen and then all of a sudden, she's watching an inappropriate Elsa video that some pervert put on YouTube. So, she's not allowed to watch YouTube. 

Alright, last one. Closest without going over: every day, people around the world watch how many hours of YouTube content? That's every day. How many hours?

Brokamp: Total? Or per person?

Southwick: Total.

Moser: All around the world, total number of hours.

Brokamp: I'm going to go with one billion.

Moser: Yeah, I'd say 1.4 billion.

Engdahl: 500 million.

Southwick: It was one billion. You nailed it!

Brokamp: Whoa!

Southwick: Right on the money! Alright, guys, that's all I've got for you today. Well played, as always! Jason, thank you so much for joining us to talk about this!

Moser: Thanks for inviting me!

Southwick: We look forward to having you on in the future here to talk about e-sports and other stuff that I really don't understand. 

Moser: You know, I'm going to be in the studio every time you ask me to come!

Southwick: Oh, thank you!

Brokamp: That's outstanding!

Moser: You guys are great!

Southwick: Hey, who wants a disclaimer? As always, The Motley Fool may have formal recommendations for or against the stocks we talked about today. Don't buy and sell stocks based solely on what you heard on this show! The show is edited plussingly by Rick Engdahl. For Robert Brokamp, I'm Alison Southwick! Stay Foolish, everybody!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.