Netflix Dominates Subscribers, but Is It the Top Pick for Streaming Stock Investors?

There’s no question that Netflix (NFLX 4.47%) dominates the streaming industry. The entertainment giant pioneered this technology, and nearly every legacy media company has followed suit ever since.

Netflix currently has more than 260 million subscribers and is the only major streaming service that is profitable in the United States. This shows the benefits of being a pure streaming company rather than a traditional media company diversifying from linear TV and streaming.

However, the largest companies are not always the best in the stock market. Find out if Netflix is ​​the best streaming stock right now.

The state of the streaming industry

There is some fatigue with streaming entertainment, according to a streaming study, and the industry as a whole is growing more slowly.

For example, 62% of respondents believe there are too many streaming options. This reflects an increasingly crowded streaming market with streaming-only providers like Netflix, Amazon, and Apple, as well as traditional providers like Hulu, Disney+, ESPN+, Peacock, Paramount+, Max, and Discovery+.

It’s understandable why viewers would be frustrated by the plethora of platforms. This makes it difficult to find what you want to watch, and you have to pay for multiple services if you want to watch the latest hit series or popular content like Thursday Night Football, which is exclusive to Prime Video.

The survey also found that while viewers are less interested in adding new streaming services, they are still adding more services than they are currently removing. 46% of respondents said they subscribed to more streaming services than last year, and 37% said they subscribed to fewer streaming services. This is a significant increase from just 13% who said they will have fewer streaming services in 2022 than last year.

The biggest complaint from respondents was that they wanted the show to be available on one platform. Then we found out that it was very difficult to keep track of which streaming services had the content we wanted, and we ended up not being able to pay for the content we wanted.

Netflix is ​​a good stock, but there are better pick

Following its fourth quarter earnings report, Netflix is ​​looking better than ever. The company added 13.1 million subscribers in the fourth quarter, a new record for the same quarter. The results exceeded expectations, and the company raised its operating profit margin forecast for 2024.

However, the study only covers the US, suggesting streaming customers are becoming more reluctant to add new services. This could mean there may be a cap on Netflix’s subscriber growth, or that the streaming sector may be heading into a zero-sum crisis. A game where the benefits of one service are gained at the expense of another.

It looks like Netflix could easily outperform the market from here, but there’s another streaming stock with more upside potential: Roku (ROKU 1.45%). Roku, America’s leading streaming platform with over 75 million active accounts, is designed to make it easy to stream the shows you want to watch, helping solve our respondents’ biggest frustration.

For example, Roku offers global search, allowing users to search for content across multiple services and solving the survey’s top complaints. Roku’s platform makes it feel like all your content is on his one platform, and you can easily keep track of which shows are on which service.

As more streaming services drive viewer boredom, investors are increasingly interested in Roku, which has a business model that makes streaming easier and benefits from more viewing time, but doesn’t require additional subscriptions. You may find opportunities. Roku also seems poised to capitalize on the boom in ad-based streaming, as it typically gets its 30% of its ad inventory from its streaming partners.

Finally, Roku appears to have significantly more upside potential than Netflix and other streaming services, as it is in the process of returning to profitability after several rounds of layoffs and a rebound in advertising demand. is. Considering the preferences of U.S. streaming viewers, Roku appears to be the best streaming stock to buy right now.