Three US media stocks in focus amid global streaming boom

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Summary

• Media businesses are gaining strong traction on the back of shifting consumer preferences and technological advancements.
• People now have more options for content as per their choice.

Undeniably, media plays an important role in entertaining and engaging people. However, the pandemic fuelled the voracious appetite for online entertainment consumption, which grew notably as people were confined to their homes during lockdowns.

With people having more leisure time in hand, the entertainment sector started attracting more and more eyeballs. And this is just the beginning. The sector continues to grow rapidly, with technological advancements.

There is a plethora of new and existing businesses that offer so much to choose from. Media companies mainly produce and distribute books, music, radio programming, TV series, and last but not the least, movies.

On that note, let us discuss three of the leading US-based media companies and their latest announcements.

The Walt Disney Company (NYSE:DIS)

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The Walt Disney Company (NYSE:DIS) is one of the leading global media firms, enjoying the impressive intellectual properties of Marvel, Pixar, Star Wars and multiple classic Disney brands.

The company is loved globally for its iconic movies, unique storytelling, and creative representation of the characters. The company enriches the young minds with beautiful picturization of kids' favorite characters.

The numbers for the first quarter of FY21, ended 2 January 2021, clearly reflected the COVID-19 impact, especially on the Experiences, Disney Parks, and Products segments.

Recently, the company gained traction on the announcement of reopening of theme parks in California from early April 2021. The state health officials have given the green signal to theme parks, given they follow strict guidelines and operate within limited capacity.

The company is confident of re-bouncing from the pandemic impacts, thanks to the upcoming launch of a new Star-branded entertainment offering and a robust pipeline of excellent, high-quality content, according to CEO Bob Chapek.

Must Read: Walt Disney's hopes up as Disneyland set to reopen after months of closure

Discovery, Inc. (NASDAQ:DISCA)

Discovery (NASDAQ:DISCA) is another top media company with strong content and brands such as Food Network, HGTV, and its namesake channel. The company is deeply loved by its passionate audience, who love real-life entertainment.

David Zaslav, President and Chief Executive Officer, has highlighted that 2020 was a year of challenge, change and opportunity, and the company proved its focus, creativity, and resilience as the global team. As per an update on 22 February 2021, the firm’s total paying direct-to-consumer subscribers exceeded 11 million, internationally.

In 2020, total revenue stood at USD 10,671 million, down by 4%. The available net income was USD 1219 million, and EPS was USD 1.81 per diluted share. Adjusted EPS was USD 3.20 per diluted share.

The company is well-positioned to achieve sustainable long-term growth and drive long-term shareholder value. 

Netflix, Inc. (NASDAQ:NFLX) 

 
Netflix (NASDAQ:NFLX) is proving to be a great escape during the ruthless pandemic time. People all over the world have been busy watching Netflix series to overcome boredom. Amid the lockdowns when people had to stay put at their homes, Netflix witnessed a surge in its viewers. 

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In the Q4 of 2020, the company made 8.5 million paid net additions and surpassed the 200 million paid memberships mark. Net cash from operating activities was USD 138 million as against USD 1.5 billion during the PCP. Free cash flow stood at USD 284 million as against USD 1.7 billion in Q4 in the previous year.  

For the entire year 2020, the company registered USD 25 billion in revenue, which is a 24% increase year over year. A record paid membership of 37 million was added during the last year. The company also registered an operating profit of USD 4.6 billion, an increase of 76%.

In its quarterly report, the company highlighted that its booming streaming entertainment placed the business against legacy rivals like Discovery, WarnerMedia, and Disney. Netflix is expecting the trend to continue for years to come. The company is strengthening its original content library across nations and genres.

With increasing entertainment consumer base, there are huge options from video game, TV to user-created content on TikTok and YouTube, as per the company. In such a scenario, the business is focused on growing its share of screen time against the main rivals.

Also Read: How much does YouTube pay the Creators?