Streaming services are gaining traction like never before. According to Nielsen’s latest Total Audience Report, as of this year’s second quarter, streaming accounts for one-fourth of all television minutes viewed.
In a way the pandemic has been working miracles for the streaming industry. Users — with fewer entertainment choices at home — have been increasing and companies have been raking in revenues in the form of increased subscriptions.
Streaming Gains Traction
According to Nielsen’s latest Total Audience Report, streaming now accounts for 25% of all television minutes viewed. That’s quite a leap from the 19% share of TV minutes that streaming accounted for in fourth-quarter 2019.
Overall, Americans watched an average 142.5 billion weekly streaming minutes in the last quarter compared with 81.7 million hours in the second quarter of 2019. Netflix, Inc. NFLX continued to lead the streaming market with 34% share, followed by Alphabet, Inc.’s GOOGL YouTube with 20%, Hulu with 11%, Amazon.com, Inc.’s AMZN Amazon Prime with 8%, and The Walt Disney Company’s DIS eight-month old Disney+ with 4%.
Interestingly, streaming is gaining popularity among all age groups. Those in the 55 and above cohort accounted for 26% of streaming TV minutes viewed in the second quarter, up from 19% a year ago.
Streaming Services Poised to Grow
With strict restriction on public gatherings and entertainment hubs like parks, gaming zones and theaters still closed, there isn’t much to do except for relying on video and music streaming services. Luckily, the launch of several streaming services coincided with the pandemic. This has increased the willingness of subscribes to avail of services. According to the survey, among those who subscribe to at least one paid subscription video service, 25% are willing to add more such services, 73% said the number was unchanged and only 2% want to reduce the number.
According to a report from market research firm Grand View Research, the global video streaming market size was valued at $42.60 billion in 2019 and is projected to witness a CAGR of 20.4% from 2020 to 2027. The major factors that are driving the growth of the video streaming services market around the globe include the rising penetration of Internet, especially in the developing economies, and increasing penetration of smartphones and smart TVs.
Stocks in Focus
Streaming services are one of the rare few to be benefiting from the coronavirus pandemic, which has kept billions of people at home with nothing to do but stream. This thus makes an opportune time to invest in video and music streaming stocks.
Apple, Inc, AAPL, which launched Apple TV+ last year, has gained a healthy number of subscribers in less than a year. The company is reportedly planning to offer a bundled service to lure more subscribers. A basic package will include just Apple Music and Apple TV+, while a more expensive variation will add Apple Arcade.
The company’s expected earnings growth rate for the current year is 8.7%. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the past 60 days. The company currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Netflix, Inc. is considered a pioneer in the streaming space. It has been spending aggressively on building an original show portfolio. The company added more than 10 million paid subscribers in the second quarter.
The company’s expected earnings growth rate for the current year is 52.1%. Its shares have gained 11.2% over the past three months. Netflix currently has a Zacks Rank #3 (Hold).
Amazon.com, Inc.,besides being an e-commerce giant, offers several other services. Its Amazon Prime, a membership program, provides access to streaming of movies and TV episodes among other services and is one of the market leaders in the streaming space.
The company’s expected earnings growth rate for the current year is 39.1%. The Zacks Consensus Estimate for current-year earnings has improved 59.3% over the past 60 days. The company carries a Zacks Rank #3.
Comcast Corporation’s CMCSA Peacock video streaming service has gained more than 10 million paid subscribers in less than a month after its launch. Peacock has three tiers of service: Free, Premium and Premium Plus. Peacock also offers a lineup of around 25 curated digital linear channels, featuring long-form and digital-originated programming content from NBCUniversal's broadcast and cable properties as well as third-party content providers.
The company’s expected earnings growth rate for the next year is 21.5%. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the past 60 days. It carries a Zacks Rank #3.
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