Streaming movies, music, TV shows and podcasts has become the dominant way people consume entertainment. The latest industry statistics show that Americans spend an average of three hours each day streaming content, and 99% of U.S. households pay for at least one or more streaming services, shelling out an average of $46 a month to do so. The growth of streaming has come at the expense of cable television and other traditional forms of entertainment.
The number of U.S. households paying for cable television has declined from a peak of 100 million in 2014 to 65 million at the start of 2022, a decrease of 35%. More recent surveys have found that as many as 25% of households plan to cut the cord over the next six months as traditional TV viewership continues to dwindle, a trend that’s occurring worldwide. The shift in consumer habits now makes it an opportune time to own the stocks of streaming companies.
Here are the three best streaming stocks to buy in July 2024.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) has emerged as the dominant player in the global streaming sector and has managed to avoid many of its competitors’ pitfalls. In recent years, the company has adjusted its business to reflect its maturing status. Cracking down on password sharing among customers and placing advertising on its streaming platform has gone a long way toward keeping it ahead of its competitors and ensuring continued growth.
A current push into live events and sports also looks like the right play for Netflix and is helping the company to secure and grow its subscriber base. This includes a $5 billion deal to stream World Wrestling Entertainment’s (WWE) weekly flagship program Raw starting in 2025, a boxing match this fall featuring Mike Tyson, and an NFL football game on Christmas Day. Bolstered by strong financial results, NFLX stock is up 45% this year and looks likely to continue its ascent.
Disney (DIS)
Disney (NYSE:DIS) focuses heavily on its Disney+ streaming service, an increasingly important part of its overall business. This focus has included joining forces with rival streamer Warner Bros. Discovery (NASDAQ:WBD) to offer their streaming services in a combined bundle. In May, the companies announced that Disney+, Hulu, and HBO Max streaming services would be bundled in a package similar to traditional cable television.
The streaming bundle will be offered in ad-supported and commercial-free tiers. Disney will act as the distributor, collecting subscription fees and paying Warner Bros. Discovery a percentage. The combined streaming services will give subscribers access to content from traditional broadcasters such as ABC and Fox and specialty channels such as HBO, CNN and the Food Network. The bundle provides access to popular content ranging from Marvel superhero movies to the Sopranos TV show.
The arrangement with Warner Bros. Discovery is Disney’s latest effort to grow its streaming service. Earlier this year, Disney, Warner Bros. Discovery and Fox Corp. announced plans to offer a joint sports-streaming service that is expected to launch this autumn. With everything it has going for it, Disney seems like a reasonable bet amid the current streaming wars. Over the last 12 months, DIS stock has increased 10%.
Alphabet (GOOG, GOOGL)
The parent company of the Google search engine might not be the first name that comes to mind when considering streaming, but Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a legitimate contender. This is because Alphabet owns and operates YouTube, which continues to be a major force in streaming. Most people associate YouTube with short videos filmed on people’s smartphones. However, the reality is that the platform has a global audience that watches more than a billion hours of YouTube each day.
YouTube has eight million subscribers, though the platform has millions more casual viewers. It is increasingly moving beyond its short-form, homemade videos and more into movies, TV shows and video podcasts. In this year’s first quarter, advertising on YouTube generated $8.09 billion for Alphabet. Increasingly, ad spending is being topped up by fees charged to rent and watch movies and TV shows. Like the other streaming companies, Alphabet also streams live sports on YouTube.
The changes taking place at YouTube are making the video streaming site more popular than ever and contributing more to Alphabet’s bottom line. Alphabet’s stock has gained 53% over the last 12 months, including a 35% increase so far in 2024.
On the date of publication, Joel Baglole held a long position in GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
