It’s Wednesday evening. You’re winding down from a long day and you’re exhausted. What you really want to do is put on your pajamas and go to bed, but you really should eat something first. You order up a pizza, but what are you going to do with the rest of your night? If you’re like one of 55 million other Americans with a Netflix subscription, the answer is probably binging your most recent TV obsession on streaming video.
Streaming Video Stock on the Rise
It isn’t exactly breaking news that Netflix (NFLX) and other streaming video services like Amazon (AMZN) and Hulu continue to grow in popularity. Something that may be news to you, though, is that Netflix stock has risen from $150 to $395 in the last calendar year and Amazon has been almost equally as profitable in the same time, nearly doubling from $968 to $1,716.
Investor’s Business Daily says “Insiders are calling this the era of “peak TV.” This year, an estimated 520 scripted series will be produced for broadcast, cable and over-the-top internet services in the U.S., according to cable network FX. That’s up 7% from 2017 and nearly 50% from just five years ago.” In that same 5-year time frame Netflix stock has risen over 1000% and Amazon over 500% showing a direct correlation to the “peak TV” era.
Are you kicking yourself for not investing in streaming video stocks yet?
Will the Programming Bubble Burst?
Eventually, yes. The consumer’s appetite for new programming is only so large, but when the bubble will burst is an open question. The streaming video industry is still new and evolving, and there are major shakeups on the horizon. Disney (DIS) and Apple (AAPL) are both expected to launch major streaming services soon which will muddle the field even more. The Garbacz Group is here to help answer questions if you are looking to invest in the television industry and streaming video stocks.
The companies that are most at risk are the multichannel pay-TV giants such as AT&T (T) and Comcast (CMCSA). However, with AT&T’s recent acquisition of Time Warner (TWX) they are now 10% owners of Hulu. Comcast was already a 30% owner of the third largest streaming company. According to Investor’s Business Daily, “penetration of multichannel pay-TV services among households with broadband has fallen below 80%, a seven-year low” and streaming video is solely to blame.
Long-Term Outlook (Spoilers Ahead!)
When you’re planning your portfolio, especially when you’re investing for the future, you want to look ahead and consider every outcome based on the information you have. Investor’s Business Daily hypothesizes that “Only a few subscription video-on-demand services with broad appeal are likely to be long-term winners in the new TV industry structure” but “a host of smaller, niche services for passionate fans are likely to succeed. This second tier of internet video services now includes such channels as Crunchyroll for Japanese anime, World Wrestling Entertainment‘s (WWE) WWE Network and Gaia (GAIA) for yoga, fitness and spirituality programming.”
Need Personal Advice? Ask An Expert.
We mentioned nine ticker symbols in this post alone. With all these different players in the television and streaming video market, which of these companies should you invest in? It’s always wise to talk to a professional. Contact The Garbacz Group for a risk tolerance assessment and portfolio consultation today.
You can also email [email protected] for more information.