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4 Stocks to Watch Amid Growing Demand for Streaming Services

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An increasing number of Americans are shunning traditional television and subscribing to streaming services. The already thriving streaming services industry got a further boost during the pandemic as people mostly stayed indoors and were left with fewer choices of entertainment.

This saw streaming services not only gaining popularity but also making big bucks. According to recent research from Nielsen, streaming accounted for more than a quarter of TV time in the United States during the pandemic. And as more players foray into the streaming space, the industry is only going to flourish further.

Boom Time for Streaming Services

Per the research by Nielsen, of the total time spent on television, 26% of it is used on streaming services. Although people are still availing cable TV, streaming services are fast gaining subscribers as more people are shunning traditional television.

According to a New York Times report, 20% of the time was spent on streaming in 2020. Moreover, the report from Nielsen says that over 7 million households likely gave up their traditional-pay TV services last year during the pandemic as they looked for other options of entertainment.

According to a Deloitte survey, presently an average person is paying for four video streaming services. Moreover, 82% of Americans subscribe to at least one paid video streaming service.

Streaming Services Poised to Grow

Pay TV has been suffering at the hand of streaming services for quite some time now. The pandemic further helped streaming services. In fact, according to a Bloomberg report, The Walt Disney Company, Inc. (DIS) plans to shut down 100 of its international TV channels by the end of 2021 as it plans to focus more on its streaming services like Disney+.

According to Globe News Wire, theglobal video streaming market share will witness a CAGR of 12.2% and reach a market value of $843.1 billion by 2027. The video streaming market was valued at $342.44 billion in 2019.

Interestingly, a couple of video streaming services were launched just months ahead of the COVID-19 outbreak and following that a few more services were launched. This saw almost all the service providers gaining subscribers during this period, which eventually helped boost their revenues.

Moreover, many media companies that have been waiting to release their movies in theatres have started to release them on OTT platforms. These have further been helping the streaming industry.

Stocks to Watch

Given that streaming services are gaining popularity and traditional TV is slowly losing the war, this is an opportune time to invest in video streaming stocks.

Apple, Inc. AAPL launched its streaming services last year and has gained immense popularity since then. The company reportedly has more than 30 million TV subscribers.

The company’s expected earnings growth rate for the current year is 57.6%. The Zacks Consensus Estimate for current-year earnings has improved 14.9% over the past 60 days.  Apple has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Netflix, Inc. NFLX is considered a pioneer in the streaming space. It has been spending aggressively on building its original show portfolio. The company added more than 3.98 million paid subscribers in the first quarter of 2021 for a total of 207.64 million globally.

The company’s expected earnings growth rate for the current year is 71.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days.  The company currently has a Zacks Rank #3 (Hold).

Amazon.com, Inc. AMZN, besides being an e-commerce giant, offers several other services. 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 space. 

The company’s expected earnings growth rate for the current year is 37.3%. The Zacks Consensus Estimate for current-year earnings has improved 15.7% over the past 60 days.  Amazon carries a Zacks Rank #3.

Comcast Corporation’s CMCSA Peacock video streaming service boasts more than 33 million paid subscribers in less than a year of 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 current year is 14.6%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 60 days. The company carries a Zacks Rank #3.

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