Competition in the streaming space is heating up with the launch of Disney’s (DIS - Free Report) Disney+ and Apple’s (AAPL - Free Report) Apple TV+. Moreover, AT&T’s HBO Max and Comcast’s Peacock are set to debut this year.
Further, China-based iQIYI (IQ - Free Report) is expanding its international footprint. The company recently announced the theatrical release of its first original animated film Spycies in China on Jan 11, 2020. The film will be subsequently released in overseas markets including Europe, North America and Southeast Asia.
This is part of the company’s focus on expanding its global footprint. Notably, in August 2019, the company soft launched the multilingual iQIYI app, which can be downloaded globally from the App Store and Google Play.
Moreover, iQIYI plans to provide local language support in six Southeast Asian countries, including Malaysia, Indonesia and Thailand, among others, as well as Greater China regions including Hong Kong, Macau and Taiwan.
Original Content Strength to Aid iQIYI
iQIYI’s original content has also received international recognition. Original drama series The Golden Eyes was awarded the Golden Bird Prize at the Seoul International Drama Awards while the film Balloon was shortlisted for the 76th Venice International Film Festival.
The company already has a huge subscriber base in China, which is one of the biggest consumer markets in the world. Thus, its entry into the international market could seriously disrupt the streaming space, especially for market leader Netflix (NFLX - Free Report) , Amazon’s (AMZN - Free Report) prime video and Disney+.
iQIYI’s portfolio strength has been a major growth driver. The company had 105.8 million total subscribers (99.2% of these were paying subscribers) as of the end of third-quarter 2019, up 31% year over year.
Notably, iQIYI has outperformed Netflix, Amazon and Disney in the past year but lagged Apple.
One-Year Performance Chart
Disney+ Emerging as Leading Challenger to Netflix
Netflix is currently leading the race with a subscriber count of 158 million as of the end of third- quarter 2019. However, the company is facing stiff competition from the likes of Amazon’s prime video, Disney+ and Apple TV+.
Disney+ is poised to be the main contender challenging Netflix’s dominance in the market. Disney’s access to popular content naturally makes it a force to be reckoned with in the streaming space.
At launch, Disney+ users had access to more than 500 movies and more than 7,500 episodes of library television content. Disney+ also offers movies and series exclusive to the platform like The Mandalorian, which turned out to be one of the biggest hits of this holiday season.
Moreover, Disney+ allows unlimited downloads of any TV show or movie on up to 10 devices, which is a feature that can distinguish it from Netflix.
Notably, the streaming service managed to acquire 10 million subscribers just a day after its launch on Nov 12. Per a Credit Suisse estimate quoted by CNBC, the number is expected to be 20 million for 2019. The upcoming launch of Disney+ in Europe and Latin America is a key catalyst in 2020.
While Apple currently carries a Zacks Rank #2 (Buy), iQIYI, Netflix, Amazon and Disney have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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