The video streaming wars are still ongoing, even though much of the attention of investors has shifted toward another battle in the artificial intelligence (AI) universe. From a growth investors ‘ perspective, streaming stocks may no longer be the hottest place to bet on. Arguably, the streaming scene’s best days have gone bye-bye, with their pandemic lockdown tailwinds now comfortably behind us.
While at-home entertainment isn’t as lucrative as during lockdown, it’s still an intriguing market rich with rewards for the firms striving to compete. At this juncture, Netflix (NASDAQ:NFLX) can still rake in the dough in a far more mature streaming market.
As the battle for viewership looks to take it to the next level with intriguing new streaming concepts (think video game streaming and content optimized for mixed-reality headsets), I’d look for some of the shine to return to the streaming plays.
Netflix (NFLX)
Although there are plenty of streaming apps with so much incredible content to offer (and so little time to get through our lists of things to watch), Netflix continues to offer one of the best bangs for one’s buck in the entire entertainment scene.
You’re getting a boatload of value for your price, especially if you opt for the cheaper ad-supported plans. And suppose you’re a couch potato who consumes a lot of Netflix content (it’s really hard not to binge on some of their new reality shows). In that case, in my humble opinion, Netflix is almost uncancellable, regardless of the economic environment.
With a trove of content and a wider range of price tiers to meet consumers’ financial circumstances, Netflix remains one of the more affordable forms of high-quality entertainment on the market. In that regard, a Netflix subscription seems more like a consumer staple than a discretionary.
Whether this warrants the stock’s premium multiple of over 46 times trailing price-to-earnings remains the big question mark for investors. Either way, Netflix remains the streamer to beat right now. The firm shows us there’s still economic profitability in streaming.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is becoming a threat in the streaming market, especially following its decision to have its video streaming service Prime Video jump aboard the ad-based tier bandwagon. If you can’t get enough of the hit shows on the platform, an extra few bucks to get rid of the ads isn’t much of a deal-breaker. Fans of the service will be happy to pay a bit more if it means adding to Prime Video’s content budget.
Not everybody will welcome ads and requests for a few more dollars, though. The dollars from monthly subscriptions do add up, and the financial impact can start to hurt, especially in these inflationary times.
Some Prime subscribers grew pretty upset that Amazon would interrupt ad-free content just a few weeks ago. Some disgruntled consumers felt “deceived”, according to a recently proposed lawsuit that is reportedly seeking $5 million from the firm for the move.
Undoubtedly, price hikes and ads won’t be well-received on the whole. As Amazon looks to pad its profits, it had better make things right with its loyal subscribers. Otherwise, they may just end up speaking with their wallets. Either way, Amazon seems to recognize the potential in its Prime Video service as it evolves to become more than just a “side-perk” of having a Prime subscription.
Apple (AAPL)
Finally, we have Apple (NASDAQ:AAPL), a firm many may count “out” of the streaming wars. Though the content library at Apple TV+ has grown in recent years, the service continues to drag its feet relative to many peers. Recent price hikes will not help the service take market share away from its rivals.
With the growing number of praise for some of its programs (Ted Lasso, Severance and The Morning Show) Apple TV+ seems to be taking on more of a high-quality storytelling angle than some of its competitors, especially Netflix, which has a slew of hit reality shows (think Love in Blind) that’s been trending of late.
Yes, there’s not a ton of content on Apple TV+. All it really takes is one hit show. Ted Lasso seems to be that very show for many, to draw in new subscribers. The real battle lies in retaining them as competitors lure them over their platforms. Fortunately, I think Apple is on the right track, as it trickles intriguing original films into the content library to get users to stick around for a while longer.
Apple TV+ may not be the most exciting member of the streaming scene, but it’s certainly taking on a unique angle. Perhaps Apple could bring more immersive content like its Discover Dinosaurs to hook Vision Pro users to its platform.
On the date of publication, Joey Frenette owned shares of Apple and Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
