Streaming is the future of audio & video entertainment in the world where more people watch their favorite TV shows & movies on their smartphones or from the comfort of their homes.
According to FinancialNewsMedia ((FinancialNewsMedia, “Global Video Streaming Market Size 2026,https://www.prnewswire.com/news-releases/global-video-streaming-market-size-projected-to-reach-149-billion-by-2026-301499694.html)), the global video streaming market will reach $149 billion by 2026 and grow at a 18.6% CAGR.
As more people transition from cable TV to streaming on-demand video, there will be a few companies to benefit from the change in consumer tastes.
What are Streaming Stocks?
Streaming stocks are companies that generate a good majority of its revenue through online streaming videos services. These companies generate revenue through monthly paid subscriptions (i.e. Netflix) or advertisements on the streaming platform.
Consumers enjoy streaming services because on-demand streaming content gives you huge access to a massive library of music and videos for a low monthly price.
Top Streaming Stocks
|Ticker||Name||Last Price||Market Cap|
1. Netflix (NASDAQ: NFLX)
It’s hard to make a list of top streaming stocks without mentioning Netflix. The company launched its movie & TV service in 2007 and has grown into the clear leader in the streaming space with over 221 million paid subscribers.
However, many analysts believe growth has stalled and Netflix must work to solve several problems with their streaming service such as:
- Rising cancellations after price increases
- Reckless spending on new shows that get canceled after 1 season
- Fixing the massive account sharing problem that costs them nearly 100 million subscriptions
- Figuring out how to monetize a lower-tier subscription with advertising
The good news is Netflix stock looks extremely cheap now with a 19 P/E ratio so it could be a strong buy.
Read my Netflix stock analysis article for more details.
2. Roku (NASDAQ: ROKU)
Roku is the leader in the on-demand video streaming player market with over 56 million active accounts.
Their business model depends on advertising & unit sales, unlike Netflix’s subscription model.
Roku will continue to grow their streaming accounts and make a lot more money once the advertising industry recovers post COVID-19.
3. Disney (NYSE: DIS)
After years of stagnant growth, Disney decided to revamp itself as a top streaming company with the launch of Disney+.
In their most recent Q3 2020 reports, Disney has over 100 million streaming subscribers across Disney+, Hulu, and ESPN+.
60.5 million of those subscribers signed up for Disney+, which will be a huge cash cow for Disney in the long run.
Even though Disney is in catch up mode, Disney+ makes the company a whole lot more valuable while the theme park business took a huge hit during COVID-19 lockdown closures.
4. Genius Brands (NASDAQ: GNUS)
Genius Brands is a newcomer to the streaming space and the stock skyrocketed to $11 per share amid the upcoming launch of the Kartoon Channel.
Since then, the stock has plummeted due to massive dilution and no signs of incoming revenue.
Genius Brands also launched their toy line, which sold out at Walmart and Amazon. This is a speculative, high-risk stock with a multi-year timeline.
If you are interested in small-cap stocks with big potential, Genius Brands is a good bet.
Related: Should You Buy Genius Brands Stock?
5. AT&T (NYSE: T)
AT&T is well known as a true and tried dividend paying stock but they recently launched HBO MAX to increase their streaming revenue as customers cut the cable cord and embrace on demand video content.
HBO Max has 4.1 million subscribers during its initial launch and AT&T plans to reach 50 million in the US by 2024.
With an annual dividend or $2.08, AT&T is one of the higher yielding dividend stocks that gives investors exposure to the ongoing streaming wars.
6. Spotify (NASDAQ: SPOT)
Spotify is the top music streaming platform with a $48 billion market cap. It’s one of the best stocks to own if you’re bullish on the future of music streaming services.
How to Invest in Streaming Stocks
Here are some tips to getting started as an investor in streaming companies:
Step 1: Find a streaming stock
You can choose some of the streaming stocks listed in this article or do your own research as well. I personally believe in tracking your own spending habits to find some good investment ideas.
For example, I subscribe to Netflix so I also bought the stock as well. This is a simple investment strategy called “Investing in what you know”. Look at your personal spending habits and see if you use any of the streaming services listed below. That could be a good starting point for some investment ideas.
Step 2: Analyze the company
When analyzing streaming companies, I tend to look for important metrics such as revenue growth, user growth, high-profit margins, and high total streaming hours.
Step 3 : Buy the stock
You need a stock brokerage account to invest in streaming stocks. Here are some of my favorite stock brokers to choose from:
Fidelity Investments is my preferred full service broker for buying and selling stocks in a traditional brokerage account and IRA retirement account. $0 stock trades, 24/7 phone customer support, and an easy to use app are just some of the reasons why I use Fidelity.
Disclosure: I own shares of NFLX, ROKU, DIS, and GNUS.