In recent years, the pandemic has changed the way we work, socialise and shop. Across the globe, the public were forced to stay at home as much as possible, in order to reduce the spread of the virus.
This caused many of us to turn to streaming platforms — to start a new series or watch a film, escape reality and enjoy some down time. As a result, streaming sites have seen a boom in subscribers. Although experts predicted this would die down, and subscription rates would drop off after restrictions were eased, this hasn’t been the case.
In this article, we will explore how the coronavirus pandemic has affected video streaming services, and take a look at how it’s impacted their stocks.
COVID 19 and streaming services
As a whole, 2020 can be summed up as a year of banana-bread baking, home workouts and movies on the sofa. As lockdowns were imposed as a result of the pandemic, cinemas were forced to close their doors to the public and families were asked to stay at home, watching films they’d likely seen several times before.
Although the pandemic significantly weakened the retail and hospitality sectors, there was a significant gap in the market, which streaming services took little time to manipulate. The likes of Netflix (NFLX) and Amazon (AMZN) placed additional funding into the production of original films, and gained streaming rights for unreleased films, which never made it to the cinema.
In addition, new streaming services emerged, including Disney+ (DIS) and Apple TV+ (AAPL), both of which have become extremely popular. Since its launch in November 2019, Disney+ has experienced astronomical growth, and in the fourth quarter of 2021, recorded 118.1 million subscribers worldwide.
According to a report by the Motion Picture Association, online video subscriptions grew by 26% to 1.1 billion users in 2020, a pinnacle year of the pandemic. With this surge, there isn’t much concern over how streaming services will fare moving forward, since it would appear they continue to prevail over cinemas today, after filling a gap in the market during lockdowns.
Streaming stocks that have benefitted the most
As previously mentioned, streaming services have taken advantage of recent circumstances. Let’s explore further two of the top platforms and their stocks:
Netflix (NFLX)
Netflix is one of the biggest beneficiaries of the pandemic. At the end of 2020, the company experienced growth of 68%, recording a market cap of $239.49 billion.
In addition, the company announced they had seen subscriptions increase from 150 million in 2019, to a whopping 200 million at the end of 2020. The company’s revenue at the end of the year amounted to $23 billion.
As a result of its success in this year, Netflix’s stock increased in value by 70%. If this has prompted you to invest in the leading streaming platform, then you can learn how to start trading stocks online, since there are so many insightful resources on offer to help you.
Disney+ (DIS)
As previously mentioned, Disney+ is one of the newest streaming services on the scene and its release came at an opportune time. At the end of 2020, Disney+ secured streaming rights for unreleased movies, as well as a plethora of other favourite films, which prompted individuals to subscribe.
Experts recently predicted the service could hit 260 million subscribers by 2024 and in response, Disney shares boomed, with the stock experiencing a 14% increase in value.
If you’re considering investing in streaming stocks, then you’ll be glad to hear that their strong performances should continue into 2022. In fact, it’s believed the platforms could spend more than $230 billion this year on new content — continuing to distribute originals, unreleased movies, and new series, which are going to give a ‘fear of missing out’ feeling to those who haven’t subscribed yet.
Like many financial markets, the stock market is highly volatile, and whilst this can present opportune conditions to make gains on your capital, it can also put you at risk of making losses. To minimise this risk, you should ensure that you do your research, and understand the factors that can cause stock prices to fluctuate.
