Netflix is expected to transition into a streaming hub to monetize distribution via third-party integrations; success depends on clean execution that avoids the cluttered model of competitors.

Netflix may become a streaming hub, meaning you may be able to sign up for services like Peacock through your Netflix interface.

A lot of investors are confused whether or not this is a good or bad thing for Netflix.

Now, moving on, we get to some rumored news that Netflix may be turning into a platform where they host different streaming services like Peacock or Fox One.

Right now, Netflix is the biggest streaming service in the world by far with 325 million plus subscribers, about 700 million viewers. So, Netflix is completely massive. It has wide distribution.

But so far, Netflix is only using its distribution for itself. It just has its own original content or shows that they license to have temporarily in their library. But everything that Netflix shows in the Netflix app is the Netflix library.

And that's where a streaming hub would be different. With a proposed streaming hub, if Netflix goes down this path, that means that they'll have services like Peacock or Fox One or maybe many other services that you can sign up for through Netflix.

So, you'd go on to Netflix, log into your account, you'd see a little thing that says, "Sign up for Peacock." or "Sign up for HBO." and you could pay for those services within the Netflix application.

Those services and paying for them would use the payment details you already have with Netflix. It would just bundle the cost together. You would likely have some type of discount signing up for it through Netflix.

And then you would also have some added convenience. Rather than going to the separate app to watch Peacock or Fox One or HBO or whatever the other streaming service is, you could actually watch their content within the Netflix user interface.

So, it basically combine both streaming services together, making it so it's no longer just the streaming service Netflix, it is the streaming hub of Netflix with other streaming services content.

And Netflix may run into the same problem if they did this and they did this poorly. I [snorts] don't believe Netflix should follow the path of Amazon Prime. They shouldn't list out videos that you can rent and movies you can watch if you pay for them in the Netflix interface.

That would be a massive degradation in the way that Netflix works today. It'd make the the app instantly feel cheaper. It's not as clean or premium.

What Netflix should do is allow you to sign up for other services through Netflix, and if you do, those services, all the free things on them, are tightly integrated into the Netflix experience.

Imagine the Netflix user interface, but you simply just have a bigger and bigger catalog cuz you're paying for other services within Netflix.

So, when I look at this news, I believe there is a path forward for Netflix to do this, and the incentive is very clear for them to become a hub. The reason why is because so far Netflix can only charge for their own streaming service.

They can only make money for their own content. But if they became a streaming hub, they're now directly monetizing their massive distribution. Other smaller streaming services would pay money to be on Netflix.

They would share in the revenue that they're making if anybody signs up through Netflix's platform. Netflix, in essence, could directly monetize their massive reach and their massive distribution.

They could earn money without spending more money on content. They could earn money by just being big already. That's a very, very attractive route to go.

I believe that Netflix will eventually go this route. They just have to do it right. I believe part of the reason, too, that Netflix is doing this is because there's other companies, not just Amazon Prime, but YouTube is already going this direction.

YouTube is not just a content creator portal. They now have NFL games. They now have the Oscars. They now have live events. YouTube has aggregated a lot of TV on its platform. And I believe that's the next phase in the streaming wars.

Not just creating content yourself, not just licensing it, but becoming the hub, the central place that people go to watch TV. I believe that's the next strategic move on Netflix's behalf.

So, I would watch over the next 6 months. I believe Netflix will make an announcement that you'll be able to buy different services on their platform.