Cable is expensive and impractical. You pay for a bunch of channels you have no interest in and never watch and you have to adhere to the cable channels’ schedules. Over the top services like Netflix (NASDAQ: NFLX) and Disney+ (NYSE: DIS) offer a wide array of on-demand content, and even when combined, are much cheaper than traditional cable. Here are the top players in the field.
Roku (NASDAQ: ROKU) was the best performing technology stock of 2019, with its price up 355% for the year. The company’s revenue has grown from $320 million in 2015 to over $1.1 billion in 2019 (244%) and has a 39% market share of the streaming sector (as of the end of Q1 2019).
Roku has a few revenue streams. Firstly, it makes money by selling various models of its hardware. Secondly, advertising, like on its Roku Channel, generates money for the company ($600 million in 2019). Additionally, any subscriptions ordered from the device kick back a percentage to Roku. Finally, the company sells licenses of its OS to television companies. Also, streamers can purchase instant-access buttons on Roku’s remote controls. The company’s revenue is expected to grow to $1.6 billion in 2020.
This year, Roku plans to expand internationally, its first target being Brazil, Latin America’s biggest market. OTT revenue in Latin America is projected to reach $4.48 billion this year and is expected to grow to $8.25 billion by 2024.
Alphabet Inc.’s (NASDAQ: GOOGL) Chromecast was launched in 2013 and has seen several models since then, including a 4K-capable version. With a few exceptions, users can cast any of their streaming services to their TV sets using Chromecast, along with music and photos.
Alphabet uses the device as another vital tool in its data-collection ecosystem. Chromecast revenue for Alphabet has grown from $560 million in 2016 to $998 million in 2018 and is expected to reach roughly $2.4 billion by 2021.
3. Amazon FireTV
Amazon’s (NASDAQ: AMZN) device was launched in 2014 and has seen a range of models like Fire TV Stick, Box, and Cube, along with 4K-capable versions. As of the end of Q1 of 2019, Amazon announced 34 million users of fireTV.
Primarily used for Amazon Prime Video, users can also stream cable and sports channels (Amazon taking a cut of any new subscriptions), along with renting shows and movies not available elsewhere, through the device. FireTV is also Alexa compatible, capable of receiving voice commands. In 2019, Amazon partnered with Best Buy (NYSE: BBY) to natively integrate its fireTV ecosystem into millions of smart TVs sold in North America. The device also collects data about its users’ viewing habits to better position advertising.
4. Apple TV
Apple TV premiered in 2007, and as of Q2 of 2019, the company has a 16% share of streaming devices in the U.S. Revenue for Apple Services, of which Apple TV is a part, was $12.5 billion in Q4 of 2019, up from $10.6 billion in Q4 of 2018.
Apple TV is largely brand-agnostic, offering its own content along with competitors, and is fully Siri compatible. Additionally, users can use the Apple TV to control their smart home devices like thermostats, lights, and cameras. Cable boxes are becoming obsolete as we enter the golden age of streaming. Some cable services, like Comcast (NASDAQ: CMCSA), are adapting with the times and offering OTT services in Peacock. The global OTT service market is expected to grow to $157 billion by 2024. As more consumers embrace cord-cutting and more services are launched, the media player market will continue to thrive.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold no positions in companies mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
David fell in love with the stock market in 2000 after making $30,000 overnight on Techniclone. His favorite stocks today are Netflix, Google, Amazon, and Apple as they are the market leaders in their sectors and are safe long-term investments.