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Pandemic Pushing Users to Streaming Services: 4 Stocks to Watch

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The coronavirus pandemic has given a major blow to U.S. media companies, with theatre halls remaining closed and shooting of big-ticket project getting deferred indefinitely. And the films that were awaiting release are now premiering on OTT platforms. This has made things even more difficult for media companies.

However, many companies have started designing shows and movies planning for an OTT release given that the pandemic is still preventing people from visiting theatres. At the same time, those into streaming video on demand (SVOD) service have been the big gainers, with an increase in not only subscribers but also in revenues.

Pandemic Driving Video Streaming Market

According to Omdia’s latest report ‘Movie Windows: Adapting for the future’, published on Digital TV Europe, the global movie industry is projected to lose $32 billion in 2020 owing to the pandemic-related shutdown that has delayed film releases and production. This is a 71.5% decline in revenues from 2019.

Moreover, box-office revenues have fallen below the $13 billion mark for the first time in more than two decades. However, SVOD services have been one of the biggest beneficiaries of the pandemic. According to the report, SVOD revenues are expected to reach $34 billion in 2020, suggesting a jump of 30% from last year.

Streaming Services Future of Entertainment

Streaming services were already giving movie studios a run for their money with more people shifting to the OTT platforms. The pandemic has given further boost to the streaming industry.

Also, the past year has seen at least four big names entering the SVOD market, which has given people more option. As streaming service adoption expands, so does usage. And that is exactly what is happening. Needless to say, almost all video streaming services companies have been witnessing a surge in new users and subscription. This is likely to continue given that people are still hesitant to step out of their houses.

Stocks in Focus

Streaming services are one of the rare few benefiting from the coronavirus pandemic, which has kept billions of people at home with nothing to do but stream. This thus makes an opportune time to invest in video and music streaming stocks.

Apple, Inc. (AAPL - Free Report) 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 also plans to offer a bundled service in the future, which is likely to further boost its subscriber figures.

The company’s expected earnings growth rate for the current year is 22.3%. The company’s shares have gained 9.3% in the past three months.  Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Netflix, Inc. (NFLX - Free Report) is considered a pioneer in the streaming space. It has been spending aggressively on building its original show portfolio. The streaming giant had 195.15 million paid subscribers globally at the end of the third quarter, up 23.3% from the year-ago quarter.

The company’s expected earnings growth rate for the current year is 51.6%. Its shares have gained 4.4% over the past three months.  The company currently has a Zacks Rank #3.

Amazon.com, Inc. (AMZN - Free Report) ,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 streaming space. 

The company’s expected earnings growth rate for the current year is 50.2%. The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the past 60 days.  Amazon carries a Zacks Rank #3.

Comcast Corporation’s (CMCSA - Free Report) Peacock video streaming service has already gained more than 26 million subscribers since its launch eight months ago. 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 next year is 17.7%. The Zacks Consensus Estimate for current-year earnings has improved 2.8% over the past 60 days. It carries a Zacks Rank #3.

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