Amidst the competitive surge in the streaming realm, media stocks are gaining the spotlight as the top contenders to become the next Netflix. Each rival brings a promise of innovation, with a robust strategy tailored toward seizing a major chunk of the booming $95.9 billion video streaming market. Moreover, they’re infusing the industry with fresh content and diverse streaming experiences, underscoring resilience and adaptability in a market where many have lost their way. As these media stocks rally, they accentuate a vibrant market poised for long-term growth, where the throne is never secure, and every player becomes a game-changer. With that said, let’s look at three standout media stocks, each with its playbook, set to test Netflix’s.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) may be synonymous with search, but its YouTube platform has been a significant force in streaming media. As per Statista, the platform attracts a staggering 1.7 billion users throughout the globe, dwarfing Netflix’s 223 million users from the last quarter count. More importantly, its colossal user base is more than just a vanity metric, translating into a whopping $8 billion in advertising sales in the third quarter alone, without accounting for subscription earnings.
Its advancements in diversifying into premium content offerings, including hugely popular NFL games, have been a catalyst for subscription growth. Consequently, YouTube’s subscription sales, combined with Google’s other non-advertising streams, showed a 21% leap in sales year-over-year in the third quarter. This success paints a picture of a multifaceted tech behemoth where YouTube stands out as one of the biggest cash cows.
Amazon’s (NASDAQ:AMZN) trajectory has been spectacular, seamlessly pivoting from its retail lineage to become a giant in cloud computing with Amazon Web Services (AWS) and a leading contender in the streaming wars with Amazon Prime Video. This expansion is a testament to the company’s relentless pursuit of expansion, effectively carving out significant space in diverse digital arenas.
The retail giant’s advertising services are also raking in impressive figures, generating quarterly sales of $12.06 billion, a robust 26% increase from the $9.55 billion reported in the same quarter last year and a 13% rise from the preceding quarter of 2023. This revenue surge sets the stage for an even more lucrative end of the year, as Amazon Prime Video is set to launch an ad-supported tier, which should add to its already substantial ad sales. Though Amazon keeps its Prime membership numbers under wraps, Insider Intelligence places Amazon Prime as the third-largest video-streaming platform in the U.S. with 157.3 million subscribers, a figure only eclipsed by YouTube and Netflix.
Wall Street was abuzz following Roku‘s (NASDAQ:ROKU) stellar third-quarter showing, displaying strong momentum in content distribution and advertising, along with the growing popularity of Roku-branded TVs. Roku’s active accounts reached 75.8 million, surpassing the 75.33 million anticipated. Moreover, the company’s revenue impressed with a sizeable leap to $912 million, marking a year-over-year increase of 19.8% while exceeding forecasts by $56.34 million.
Moreover, Roku’s platform revenue, which includes content distribution and advertising, shot up by $787 million, registering an 18% bump from the previous year. Furthermore, on Sept. 6, Roku revealed plans to reduce its workforce by 10%, marking the third round of cuts within a year, totaling 700 job eliminations, to trim the fat. These moves are often perceived as a positive step toward improved profitability. Echoing this sentiment, my colleague at InvestorPlace, Will Ashworth, projects ROKU stock could reach the $150 mark by Christmas 2024, an 87% upside from current levels.
On the date of publication, Muslim Farooque 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.