If you’ve ever used the internet, you have taken part in streaming videos. Streaming videos have become the regular way in which we consume media on the internet. Whether it’s through advertisements or a dedicated video streaming platform, it’s difficult to find a site that doesn’t have a video streaming when you land on it. As internet speeds and servers have continued to get faster, the need to download video content has disappeared. So what video streaming stocks should we look at? Let’s take a look at video streaming companies.
|TTD||The Trade Desk|
What Is a Good Streaming Stock?
Some estimates value video streaming companies and this sector as worth hundreds of billions of dollars in 2021. This number is expected to balloon to nearly $1 trillion by 2027.
Regardless of the dollar amount, the consensus opinion is that this industry is going to grow, and grow fast. Our reliance on mobile phones is only helping this to grow at an exponential rate.
Nearly 4 billion people in the world have access to a smartphone. With a rapidly improving telecommunications infrastructure, it won’t be long until that number doubles too.
So we may look at an industry like video streaming and think it’s old technology now. We probably just take it for granted as something that will always be there.
I mean how often do we use our phones to watch movies and tv shows instead of TVs? It’s super convienent.
As investors, we should always have these types of industries on our investing radars. Things that we rely on and that everyone uses without even thinking about it.
Let’s take a look at some of the best video streaming stocks to look at, for now and for the future.
Video Streaming Stocks to Invest in
Some of these video streaming stocks will be obvious and some not as much. The video streaming industry is probably more diverse than you realize. It’s not just a company posting videos for us to watch.
There’s production, editing, the actual content creators, and digital advertising, and so much more to it than just the videos. All we have to do is hit play.
But thousands if not millions of dollars go into each video or program we watch. Here are some video streaming stocks to invest in!
Netflix (NASDAQ: NFLX): I mean, this was the obvious one right? No matter which platform you use to stream television shows or movies, $NFLX is by far the industry standard.
In fact, Netflix has become the de facto verb for streaming shows, something that’s extremely valuable within any industry. The company has over 210 million global subscribers and pulled in $25 billion USD in revenue in 2020.
Netflix owns incredibly valuable intellectual property with shows like The Crown, Stranger Things, the Queen’s Gambit, and Ozark. As an investment, Netflix has rewarded those who’ve stuck around from the days where the company used to mail out DVDs.
Over the past five years, the stock has returned 510% to shareholders. If you managed to buy in at the IPO back in 2002, your investment is up a tidy 48,540%. Even as competition grows, we must remember to stick with high-quality companies with great visions. Netflix paved the way for video streaming platforms and should continue to be the industry leader for the foreseeable future.
Streaming Companies to Look At
Disney (NYSE: DIS): It’s always hard to ignore the house that Mickey built when it is a direct competitor. Walt Disney bulldozed its way into the streaming industry back in 2019 when it unveiled its streaming platform Disney+.
In just under two years, Disney+ has amassed over 120 million subscribers in a fraction of the markets that Netflix is in. Hence it’s a part of our video streaming companies list.
The two platforms share very different demographics though. They’re often subscribed to in the same household. I know me personally, I have multiple streaming services that I pay for.
Disney also has other properties like Fox Now and ESPN+, where users can stream live sports around the clock. The company is a multimedia and entertainment conglomerate that completely dominates the US video market.
Disney’s stock is a slow mover. However, when it gets going it trends hard to the upside. Shares have been trading at or near all-time highs all year long.
Even though it is a blue-chip company, you can’t help but feel that Disney still has a lot of room to grow.
Don’t forget that $DIS has the Marvel partnership as well as Star Wars going for it. So expect for it to remain one of the relevant video streaming stocks for years to come.
Streaming Stocks List
The Trade Desk (NASDAQ: TTD): The Trade Desk is the largest independent demand-side digital advertising platform on the market. You know all of those video ads you get intermittently when you stream videos? Those are from the Trade Desk’s platform. On some platforms, video ads are how they make revenues for being watched.
For many other sites, it’s a primary way to generate income. Shares of the Trade Desk have seen the stock become one of the best performing investments over the past few years. Zooming out five years to its IPO in September of 2016, and early shareholders have been rewarded with a 2,716% return. Not too bad at all! The stock recently underwent a 10 for 1 stock split which made shares much more affordable to investors than they were at the previous levels.
Vimeo (NASDAQ: VMEO): A company that just recently came onto the public markets, Vimeo is a high-quality video delivery and hosting platform. If you’re like me, you remember Vimeo for watching music videos on. Now, it’s a stand-alone platform that focuses on high-definition quality videos.
Compared to these other companies, Vimeo has a much smaller market cap. Shares are down since the IPO and have lost nearly 30% year to date in 2021. The upside seems to be a bit capped for Vimeo, especially as it competes with some heavy hitters in the industry.
Vimeo is pretty neat in that users can use it as an alternative to YouTube for hosting live streams or their brand content. The platform has some pretty serious analytics for business users, which provides insight into how your content is viewed by the public. Keep your eye on this new kid on the stock market!
Roku (NASDAQ: ROKU)
It’s always surprising to me how popular of a stock Roku is. The company has a very loyal following for its software which it offers on numerous economy-level television models. The Roku platform competes directly with Android boxes and Apple TV, but one advantage is that its software is built directly into the television already, This means you do not have to purchase an extra device.
Roku even has buttons on its remote controls dedicated to Apple TV and Netflix, which shows that while they are competitors, they can also work alongside each other in the same ecosystem. I mentioned that Roku’s stock is popular. Shares have returned over 107% in the past year alone as many people have been upgrading their televisions during the pandemic.
With a market cap of only $46 billion, an investment in Roku gets you exposure to the software platform, as well as to hardware sales of televisions and things like the Roku Stick. $ROKU has taken some licks since Q2 earnings, but Q3 earnings are around the corner on November 9th according to Tipranks. EPS consensus appears to be $0.07, with last years same quarter being $0.10.
Streaming Companies That Aren’t Public
YouTube: Yes, we know that YouTube stock is owned by Alphabet (NASDAQ: GOOGL). But if YouTube were a publicly-traded stock, some estimate it to be worth $500 billion as a standalone company.
In the most recent quarter, YouTube alone made over $7 billion in revenue, which is more than most Fortune 500 companies. Many call Google’s purchase of YouTube as the best business acquisition in history, and with numbers like those, it’s hard to argue.
YouTube is the king of content creators, with some of the biggest channels making upwards of $30 million annually.
TikTok: The video streaming social media platform owned by Chinese company Bytedance has certainly seen its share of controversy. TikTok has been a sensation, and some value the platform at over $50 billion already.
The premise behind TikTok is simple: you can make short videos and add in music, filters, and other graphics to your heart’s content. The algorithm is a powerful one, and the U.S. government even tried to ban the app, accusing Bytedance of spying on users. While there is no TikTok stock currently, keep your eyes peeled for a future IPO.
Instagram: Again, I know that Instagram stock is owned by Facebook (NASDAQ:FB). But with increasing discussion on breaking up big tech companies, I would love to see Instagram go public. Just like with YouTube, some value Instagram at nearly $500 billion, which is worth half the value of Facebook. Instagram started as a photo-centric platform but over time has developed into a streaming video app. The app has more than 500 million daily active users, and is one of the most universally used social media apps around the globe.
Some of the biggest names in the video streaming industry trade as publicly listed companies. Over the past decade, video streaming companies have nearly completely replaced downloading videos as online infrastructure has improved. While Netflix was the pioneer for streaming platforms, other heavy hitters like Walt Disney and even Amazon (NASDAQ: AMZN) are joining in.
The industry is only going to grow from here, as consumers turn to cutting the cord on their cable in favor of subscribing to streaming apps. Remember, it’s not just streaming platforms that make good investments. Digital ad-media is set to grow to upwards of $800 billion by 2026.
It’s hard to stream any video these days without an ad or two popping up in the middle of it. So next time you’re streaming a movie on Netflix or the big game on ESPN+, think about the companies that make this technology possible. Would they make good additions to your portfolio? We sure hope these video streaming stocks are a hit for you.