(Note: The author of this fundamental analysis is a financial writer and portfolio manager. He and his clients own shares NFLX.)

How much will original content be worth in the future, with so many companies racing to create it? According to the Wall Street Journal, Apple Inc. (AAPL) is the latest entrant that's getting ready to spend $1 billion to create original content. Add that to the $6 billion Netflix Inc. (NFLX) is planning to spend this year for original content. That's on top of the other traditional media players that are already contributing to creating programming. Netflix shares soared in recent years, with its original content helping to drive revenue and the stock price higher.

NFLX Chart

NFLX data by YCharts

This begs the question: Who is going to be watching all of this new content? Will there be a content bubble, with companies bidding up the prices for new shows or top talent? That's something to think about. Even though it's not happening right now, it could.

NFLX Revenue (Annual) Chart

NFLX Revenue (Annual) data by YCharts

A Content Race

Like anything, it could start out with a race between companies like Apple and Netflix trying to acquire original content and the top talent to produce it. The competition could lead to bidding wars for all the new programming that could emerge. These bidding wars could impact the valuations of the content, and cause the pricing for content creation and the talent to rise substantially. This content bubble would directly hurt the distributors or providers, as content acquisition costs increase, hurting profitability by overpaying.

Content Commoditized?

The other longer-term impact is that with so much content being created, will it become commoditized? Will all of this content become so indistinguishable that the value of the content falls over time? Like anything else, everything is based on supply and demand, leaving some companies with bloated and overpriced contracts.

This is worth thinking about because there are only so many hours in a day. There is only so much free time people have to consume all this new content, so if people aren't watching it, what is it worth? Perhaps it would be worthless.

For the meantime, all of this spending and bidding to acquire and create content is likely to lead to consolidation in the space, as companies try to join forces bringing balance sheets together.

The media landscape is changing quickly, and with all the new potential entrants coming into the market, the race to acquire the best content is just getting started. With the uncertainty around the future of the industry, it is worth asking what will happen to all this content creation, and what the results will be for the companies trying to acquire it.

Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.

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