Netflix Inc. (NASDAQ: NFLX) and Amazon.com Inc. (NASDAQ: AMZN) are the best-positioned companies to take advantage of the movement toward streaming entertainment, Nomura Instinet said in a new look at the industry.
While Netflix, the pioneering early giant in the space, and Amazon look best among the companies providing streaming services, Apple Inc. (NASDAQ: AAPL) may have the "most in question" position in the new business, Nomura analyst Mark Kelley said, citing the high price, and relatively small library for the computing giant's Apple+ streaming service.
To succeed, streaming services need a mix of "splashy, new frontline content," to lure customers in to try out the service, and then also need a "long-tail library to keep users engaged after consuming the initial hits," Kelley wrote in a note. Netflix and Amazon are the two companies that have both.
Peacock, HBO Have Good Libraries
The new Peacock streaming service from Comcast Corporation's (NASDAQ: CMCSA) NBC, which will be unveiled this week and start streaming in April, will have a strong library, with a large catalog of TV and movie hits, including "The Office." AT&T Inc.'s (NYSE: T) HBO also has decades of programming from its long-lasting cable network that give it a strong, diverse library, Kelley said.
Apple+ and Walt Disney Co's (NYSE: DIS) Disney+ streaming services, on the other hand, have had the flashy reel-them-in content.
Disney, for example, has gotten headlines and social media traction from Baby Yoda in his new "Mandalorian" show, while Apple+ made a splash last year with some star-studded new exclusive shows like "The Morning Show," with Jennifer Aniston and Reese Witherspoon. But the depth of both networks' offerings beyond the headline-grabbers may not be as strong as that of Netflix and Amazon.
Bottom line? "A positive for NFLX, a path for HBO Max and Peacock, lukewarm for AAPL," Kelley wrote.
Netflix and Apple shares were both up slightly on Tuesday, with Netflix trading at $341.24 and Apple at $314.09, while Amazon was trading at $1,862.54, slightly off from its opening price.
AT&T and Disney were both also down fractionally from the open, with AT&T at $37.84 and Disney at $144.58 at publication time. Comcast was up slightly at $46.24.
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