Page 11 - SCS May 2018 - Day 1 Tasks

COUCHWEB FAMILIARISATION

3 KEY THEMES

There are a number of important themes that emerge from the Couchweb pre-seen:

Content
The catalogue of content offered by Couchweb is critical to both retaining existing subscribers and
attracting new ones. The company must continue to focus on both creating quality content in-
house and also winning the rights to broadcast content made by other organisations. Subscribers
are not tied in to the company and will cancel their payment plans should content not be up to
expectations or competitors are able to offer better.

Cash
Couchweb needs to manage its cash position carefully. Not only will there be demands on cash
each year for investment in new content; but the company will also have to invest in technology.
This industry is fast-moving, and there is the constant threat of new operators entering the
market with a technological advantage. In 2017/18 Couchweb raised both new equity and debt
finance; this is likely to be an ongoing issue for the company.

Technology
As mentioned above, the technology in this area of industry moves very quickly. Couchweb itself
only started offering streaming services 10 years ago; this aspect of its business earned the
company $11.8 billion of revenue in 2017/18 (89% of total revenue). Innovation is constant.

Share price performance
Shareholders who have been with the company for a while have done well; the share price has
grown by approximately 700% over the last 5 years

IT security

The company needs to protect itself against unauthorised access to its IT systems. Not only does
Couchweb hold the personal details (including bank account or credit card) about millions of
subscribers; but it also needs to protect its intellectual property in the form of its catalogue of
content. It cannot afford for pirates to hack this catalogue and release the content for general
viewing on the internet.

Licence deals
The company is dependent to a large extent on accessing content from production companies.
Different restrictions are in place in different countries, and Couchweb must ensure that there is
full compliance with all different geographic terms and conditions to be able to continue to win
new licences from these suppliers.

KAPLAN PUBLISHING 7