Top 10 Entertainment and Media Stocks in the Streaming Era
While we are firmly entrenched in the streaming era, this does not mean that legacy entertainment companies are being left behind by new-age counterparts like Netflix. In fact, some of the most intriguing competing stocks are those of companies diversified across sectors beyond entertainment alone, bolstering the foundation and growth of their media offerings. With that in mind, the following is a brief list comprised of 10 of the top entertainment and media stocks currently trading, in no particular order.
Entertainment and Media Players
*Figures provided below were accurate at the time of writing and are subject to change. Any potential investor should verify metrics*
Apple Inc. (AAPL) stands out as an intriguing investment for the upcoming year, not only due to its comprehensive portfolio of innovative products and significant U.S. investments but also because of its growing presence in the streaming service sector.
Apple’s streaming platform, Apple TV+, is part of its broader strategy to diversify its revenue streams beyond hardware into content and services. This expansion into original programming and exclusive content offerings aims to capture a larger share of the competitive streaming market, adding value to its ecosystem and enhancing customer engagement. With a commitment to quality storytelling and significant investments in content creation, Apple TV+ is positioned to contribute to Apple’s overall growth trajectory. Although Apple TV+ has not been around as long as rivals like Netflix, it has quickly established itself as offering quality over quantity through some of the highest-ranked shows of the 2020s.
Along with its streaming service, the company’s ongoing product innovation and environmental commitment make Apple a compelling case for investors looking for diversified exposure in the tech sector.
Like Apple, Alphabet Inc. (i.e., Google) represents a compelling investment choice due to its strategic approach to innovation and diversification. The company’s international expansion of its AI chatbot, Bard, into new markets such as Europe and Brazil, exemplifies its commitment to pushing the boundaries of AI technology. This move not only enhances Alphabet’s AI capabilities but also complements its vast array of services, including its media platforms, by potentially increasing user engagement and data insights.
Furthermore, Alphabet’s advancements in autonomous driving with Waymo, through partnerships like the one with Uber, highlight its pursuit of diversification and innovation. These endeavors provide a strong foundation for Alphabet’s entertainment platforms like YouTube, YouMusic, and more by broadening the company’s technological ecosystem and market reach.
Overall, Alphabet’s focus on AI, autonomous driving, and strategic partnerships underscores its capacity for leveraging technology across various sectors. This diversified approach strengthens the company’s foundation and positions Alphabet as a robust investment in the tech and entertainment landscape.
Amazon Prime Video serves as a prime example of Amazon’s (AMZN) adeptness at leveraging its diverse business ventures to support and enhance its comprehensive ecosystem. This streaming service benefits significantly from Amazon’s global expansion and diversification efforts, such as its logistics network advancements in strategic locations like Sand Island, Hawaii, and its foray into new markets like Europe and South Africa. These moves not only strengthen Amazon’s core e-commerce business but also augment the Prime Video service by broadening its content library and improving service delivery to a growing international audience.
The company’s continuous investment in technological infrastructure and customer reach, from enhancing its distribution centers across the United States to launching Amazon.co.za in 2024, underscores its commitment to creating a seamless and enriched customer experience.
In restructuring its focus, Amazon effectively uses its wide-ranging operations—from logistics and e-commerce to global expansion—to support and elevate its streaming platform, Amazon Prime Video. This holistic approach not only solidifies Amazon’s position in the streaming wars but also exemplifies how its ventures across various sectors synergistically support the company’s overarching goals, making Amazon a standout investment in the tech and entertainment landscape.
Netflix has shown remarkable resilience and growth, making it an attractive stock choice as we move forward. With a significant increase in its subscriber base, Netflix ended 2023 with over 260 million subscribers worldwide, a notable jump fueled by hit series and strategic content expansions. This growth comes despite price hikes, indicating strong consumer loyalty and value perception of the Netflix brand.
The company’s crackdown on password sharing, aimed at monetizing the over 100 million households sharing accounts, represented a strategic move to enhance revenue streams while providing users with greater control over their accounts. This initiative is expected to pave the way for further revenue generation from households that share passwords.
Netflix’s financial performance has been impressive, with $33.724 billion in revenue in 2023, marking a steady increase over the years. This financial success is underpinned by a global average monthly income per paying user of $16.64, highlighting the company’s ability to monetize its extensive content library effectively.
Moreover, Netflix’s strategic content investments, such as the significant deal with WWE for exclusive streaming rights, underscore its commitment to diversifying its content strategy and enhancing its competitive edge in the streaming wars. This move into live programming and continued investment in original content and licensed titles, like “The Crown” and “The Killer,” further solidify Netflix’s position as a leading content platform.
Netflix’s robust subscriber growth, strategic initiatives to improve its bottom line, and continuous content innovation present a compelling case for considering it a smart stock choice moving forward.
Spotify’s journey from its founding in 2006 to becoming the world’s largest music streaming platform, boasting the highest number of subscribers, underscores its dominance in the digital music era. Its freemium model—offering a free, ad-supported service and a premium, ad-free subscription—caters to a wide range of listeners’ needs, setting a benchmark in the industry for accessibility and user engagement.
In 2023, Spotify showcased significant financial growth, marking a 12.9% increase year-on-year. Despite facing competition and navigating the complex dynamics of digital royalties, Spotify has not only managed to sustain its massive user base but also expand it. The platform reported an impressive count of 551 million monthly active users by the end of 2023, with 220 million opting for the premium subscription. This user expansion is reflected in the record net addition of subscribers. It indicates Spotify’s solid grip on the market despite challenges such as the absence of net profit and lower average revenue per user compared to previous years.
Spotify’s strategic moves to enhance its platform—such as incorporating audiobooks into its premium offering in the United States, achieving its second-largest Q4 net addition performance in history, and running successful campaigns like the 9th annual Wrapped Campaign—highlight the company’s innovative approach to content diversification and customer engagement. These efforts not only cater to the evolving demands of digital content consumers but also pave the way for Spotify to maintain its leadership in the highly competitive music streaming sector.
Furthermore, the stock market has responded favorably to Spotify’s performance, with its share price significantly increasing, underlining investor confidence in the company’s strategic direction and growth potential.
As Spotify continues to navigate the complexities of the global streaming market, its ability to innovate, adapt, and strategically expand its offerings positions it as a compelling choice for investors looking forward to the platform’s future endeavors and its potential for sustained growth and profitability.
Warner Bros. Discovery (WBD), formed from the merger between WarnerMedia and Discovery, Inc., has created a formidable presence in the media and entertainment industry. This combination brought together a vast library of content across a wide range of genres, including television, film, and streaming, with iconic brands like HBO, CNN, DC, Eurosport, Discovery Channel, and many others under its umbrella. The merger aimed to leverage this extensive portfolio to compete more effectively in the rapidly evolving entertainment landscape, especially in the direct-to-consumer streaming market.
In the financial sphere, Warner Bros. Discovery reported mixed results in recent quarters, reflecting the complexities of integrating large operations and navigating the competitive streaming environment. Despite these challenges, the company emphasizes its strong cash flow generation and debt repayment efforts, signaling a focus on financial health and long-term value creation. Moreover, the successful launch of Max, its new direct-to-consumer product in the U.S., has been a highlight, indicating positive momentum in its streaming business.
Looking ahead, Warner Bros. Discovery has set ambitious targets for improving its financial performance and market position. With plans to enhance content offerings and capitalize on the direct-to-consumer segment, the company aims to navigate the competitive landscape effectively. Despite facing a challenging environment, Warner Bros. Discovery remains focused on operational excellence and strategic growth to create value for shareholders and audiences alike.
Walt Disney Co. has shown resilience and adaptability amidst challenges, setting a positive tone for investors and fans alike. In the first quarter of 2024, CEO Bob Iger shared exciting developments that indicate the company’s strategic transformations are yielding results. Among these are Disney’s commitment to transforming ESPN into a leading digital sports brand, and creating a new streaming sports service in collaboration with Fox and Warner Brothers Discovery, aiming to enhance the consumer experience by aggregating sports-centric content.
Moreover, Disney is pushing forward with its direct-to-consumer strategy, enhancing its streaming services with captivating content. The company’s robust studio slate includes eagerly awaited sequels and new ventures, promising a blend of nostalgia and innovation that Disney is renowned for.
Disney’s endeavors extend beyond traditional media into the realm of video games and digital experiences, as evidenced by its partnership with Epic Games to integrate Disney’s storytelling into Fortnite’s universe. This strategic move aims to engage younger audiences and expand Disney’s influence in digital entertainment.
Despite facing recent struggles, such as controversies surrounding the Marvel Cinematic Universe and public battles with figures like Elon Musk, Disney remains focused on leveraging its vast content library, iconic brands, and technological investments to drive future growth. Disney is positioning itself for continued success in the evolving entertainment landscape by prioritizing streaming, engaging content, and digital innovation.
Paramount Global is another company that has established itself as a major player in the media, streaming, and entertainment industry. Under the leadership of Bob Bakish, Paramount Global has achieved noteworthy progress in direct-to-consumer (DTC) revenue growth and an increase in Paramount+ subscribers, significantly narrowing DTC losses. This forward momentum potentially indicative of the company’s effective management and strategic investments in its streaming services, showcasing an anticipatory approach to streaming investment and an optimistic outlook for substantial earnings growth in 2024.
Paramount’s portfolio, including CBS, Nickelodeon, MTV, Comedy Central, BET, Paramount+, and Pluto TV, highlights its comprehensive content creation and distribution approach. This extensive library, coupled with innovative streaming services and digital video products, positions Paramount Global to meet the diverse preferences of audiences worldwide.
For investors and industry watchers, Paramount Global represents a blend of traditional media strength and digital innovation. The company’s strategic maneuvers and financial management will be crucial as it continues to adapt to the changing dynamics of global media consumption and competition within the streaming landscape.
Comcast Corporation (CMCSA) showcased strong financial performance for Q4 2023, marked by a 28.5% increase in Free Cash Flow to $1.7 billion and a dividend hike of 6.9% to $1.24 per share for 2024. This marks the 16th consecutive year of dividend growth. Additionally, a new $15 billion share repurchase program was announced. Peacock, Comcast’s streaming service, saw a nearly 50% surge in paid subscribers year-over-year, reaching 31 million.
The company reported a 2.3% increase in Q4 revenue to $31.25 billion and a significant rise in annual net income to $15.38 billion. Adjusted EPS for Q4 grew by 2.4% to $0.84. Operational achievements include a 3.9% increase in domestic broadband average rate per customer and a 24% year-over-year growth in domestic wireless lines, reaching 6.6 million. Peacock’s revenue in Q4 increased by 57% to over $1 billion, bolstered by successful releases like “Super Mario Bros. Movie,” “Oppenheimer,” and “Fast X” from Comcast’s Studios segment
Electronic Arts (EA) has showcased impressive financial performance in recent quarters, underscoring its significant role in the streaming era and digital interactive entertainment. Notably, EA has seen its live services spike in popularity.
EA’s successful franchises, like EA SPORTS FC and Madden NFL, have exceeded expectations, contributing to the company’s growth. EA SPORTS FC, in particular, witnessed a 7% year-over-year net bookings growth. Such performance reflects EA’s ability to innovate and expand its offerings, keeping the global gaming community engaged and contributing to the broader streaming and digital entertainment ecosystem.
In Q1 FY24, EA reported a record quarter, driven by momentum in EA SPORTS global football and the success of Star Wars Jedi: Survivor. The company’s focus on delivering innovative entertainment experiences is evident in its net bookings growth of 21% year over year. This growth trajectory showcases EA’s strategic investments in live services and new player acquisition, positioning it well for sustained long-term growth and profitability.
EA’s outlook for FY24 reflects a stable financial forecast, with net revenue expected to range between approximately $7.300 billion to $7.700 billion. The emphasis on live services as a significant portion of its business model, representing 73% of total net bookings, illustrates EA’s commitment to a streaming and digital-first approach in gaming. This strategy not only aligns with the evolving consumer preferences towards digital and streaming content but also leverages EA’s robust portfolio of franchises to drive growth in the streaming era.