3 Streaming Stocks Smart Investors Are Selling Now

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  • Here are my three streaming stocks to sell.
  • Amazon (AMZN): It will wish it never implemented the $2.99 money grab.
  • Warner Bros. Discovery (WBD): Its CEO has a legacy of greed and ego.
  • Walt Disney (DIS): The House that Walt built is on shaky ground.
streaming stocks to sell - 3 Streaming Stocks Smart Investors Are Selling Now

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If you’re looking for streaming stocks to sell, Netflix (NASDAQ:NFLX) might have tipped its hand recently about its plans for the future.  

The Wall Street Journal reported on October 3rd that NFLX was looking to raise the price of its ad-free streaming tier once the actor’s strike ends. That’s a common theme right now.

All of the streaming businesses are focused on profits. The question is, who is doing a good job managing the tightrope between quality, quantity, and profitability? Some are doing a better job than others. 

Interestingly, Netflix is the only profitable streaming service, and it hasn’t increased prices in 2023. While price hikes sound like a quick win for companies seeking higher revenue and profit margins, they aren’t that simple. 

On the one hand, share prices tend to increase when planned price increases are announced. That happened for Walt Disney (NYSE:DIS) stock in August. However, consumers can only afford to absorb so much and may stop paying streaming subscriptions to save money.

Consumers are on edge with high inflation and rising interest rates. These three streaming stocks can get hit hard due to consumer backlash.  

Amazon (AMZN)

Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock
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Amazon (NASDAQ:AMZN) has spent years pushing the value of its Prime membership. However, unlike Costco (NASDAQ:COST), which is very transparent about the number of subscribers, the Seattle-based company is very secretive about the precise number. 

According to reporting from Consumer Intelligence Research Partners (CIRP) data from early January, the Prime subscriber count went over 100 million in 2018 and 200 million in 2022. However, CIRP data suggests Prime membership in the U.S. has stopped growing, so there’s a good chance it might take more than four years to double the number of subscribers. Perhaps even a decade. 

Now, Amazon Prime Video wants to charge subscribers $2.99 per month for an ad-free experience with its streaming service.  

“To continue investing in compelling content and keep increasing that investment over a long period of time, starting in early 2024, Prime Video shows and movies will include limited advertisements. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers,” Thurrott reported in September. 

The good news, says the company, is that your monthly Prime bill won’t go up from its $14.99 price tag in 2024. 

These are two questions investors should ponder: Is the content really that good? And how much value do you get from two-day delivery? 

It doesn’t matter if we’re talking about grocery stores or video streamers; they’re all in it for the inflationary money grab. Eventually, the consumer will get wise to all this gouging. 

I say sooner rather than later for Amazon Prime.

Warner Bros. Discovery (WBD)

The Warner Bros (WBD) logo on a pillar.
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Warner Bros. Discovery (NASDAQ:WBD) goes in any media-related article I write about stocks to sell purely on principle. CEO David Zaslav has easily made a billion dollars since taking over the top job for its predecessor, Discovery Communications, in 2006. 

Yet, its shares have woefully underperformed since going public in 2008. His greatest legacy will be the amount of debt he piled on just in time for interest rates to rocket higher in 2022. It will require Houdini to get WBD out of its mess. 

WBD stock has lost over 30% since August 7th. The stock price reached single digits as it did at the end of 2022.

According to Yahoo Finance, the company’s Max offering, which includes HBO, bumped its ad-free plan by $1 earlier this year to $15.99. On October 2nd, it raised the Discovery+ streaming platform’s ad-free plan by $2 to $8.99. 

WBD wants to merge the two shortly. How much will that cost? $22.99? Maybe more? Is HBO good enough to warrant a $20/mo price tag just for HGTV? The market will answer that question soon, but I don’t think it’s worth the price tag. 

At least Amazon has AWS and advertising to generate significant profits. Warner Bros. Discovery? Not so much. Sell now.

Walt Disney (DIS)

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I’m conflicted about Walt Disney. 

There is no question that when there isn’t a pandemic happening, its Parks and Resorts business is a cash gusher. It’s also true that its movie studios have considerable power, drawing in moviegoers to its Star Wars and Marvel blockbusters. 

However, between ABC, ESPN, and a Disney+ streaming service that’s losing a boatload of money, there are a lot of big question marks overhanging all three of these businesses. 

In a few short days (October 12th), Disney will increase its monthly Disney+, Hulu, and ESPN+ ad-free plan prices. Some of those price hikes will be over 20% bumps. The new subscription prices for each of these platforms come to $13.99, $17.99, and $10.99, respectively. 

Who is going to subscribe to all three of these platforms? The value proposition just isn’t there. Maybe I’m wrong, but I don’t think consumers will gladly pay more just so Bob Iger can get his company out of its mounting streaming losses.

If I were to rank this trio of streaming stocks to sell, Disney would probably be the second one I’d sell after WBD, but only because it’s got so many question marks. Amazon’s $2.99 add-on just irks me. Just raise Prime memberships by an equal amount and call it a day. 

The nickel-and-diming that made cable companies so despised is now affecting streaming. It’s now a race to the bottom. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/10/3-streaming-stocks-smart-investors-are-selling-now/.

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