Streaming entertainment has swept audiences off their feet, becoming the go-to method for consuming content. Recent data reveals that Americans dedicate an average of three hours each day to streaming, with 99% of U.S. households subscribing to one or more streaming services, spending around $46 per month collectively. This seismic shift in consumption has directly impacted traditional cable TV, leading to a decrease in subscriptions from 100 million in 2014 to 65 million at the beginning of 2022.
The projection that a further 25% of households plan to sever ties with cable over the next six months solidifies the endurance of streaming services. With the landscape evolving rapidly, investing in streaming companies is entering a golden era.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) stands as the titan of the global streaming realm, skillfully avoiding industry pitfalls while adapting to its mature status as a market leader. The company’s strategic undertakings, from curbing password sharing to introducing advertising on its platform, have bolstered its competitive edge and sustained its growth trajectory.
By venturing into live events and sports, Netflix is fortifying its subscriber base, evidenced by key deals like a $5 billion agreement to stream WWE’s Raw from 2025 onwards and broadcasting sporting events such as a Mike Tyson boxing match and an NFL game on Christmas Day. Driven by robust financial performance, NFLX stock has surged by 45% this year, hinting at continued prosperity ahead.
Disney (DIS)
Disney (NYSE:DIS) has shifted its focus towards Disney+, a pivotal component of its operations. The collaboration with Warner Bros. Discovery to offer bundled streaming services marks a significant strategic move by Disney. This bundling approach mirrors traditional cable television offerings, encompassing Disney+, Hulu, and HBO Max in ad-supported and commercial-free tiers.
The amalgamation allows subscribers access to a vast array of content from ABC, Fox, HBO, CNN, to the Food Network, ranging from Marvel blockbusters to TV classics like The Sopranos. With ongoing initiatives like a joint sports-streaming service in the pipeline, Disney is well-positioned to excel in the cutthroat streaming market. Over the last year, DIS stock has surged by 10%.
Alphabet (GOOG, GOOGL)
While not the typical name associated with streaming, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) plays a significant role in the arena through its ownership of YouTube. Boasting a global audience that consumes over a billion hours of content daily, YouTube transcends its origins of user-generated short videos to encompass movies, TV shows, and podcasts.
The platform’s revenue stream is diversifying, with advertising revenue amounting to $8.09 billion in the first quarter alone. Coupled with fees for movie and TV show rentals, and the inclusion of live sports streaming, YouTube is more popular and profitable than ever. Alphabet’s stock has surged by 53% in the last year, including a substantial 35% growth in 2024.
Decades of business journalism under my belt have taught me a thing or two about spotting trends and opportunities. I’ve been in the trenches of The Wall Street Journal, The Washington Post, and more, delving into the intricate world of finance and investments. In the ever-evolving landscape of streaming stocks, these three stand out as the cream of the crop, poised for even greater heights ahead.
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