This is not a recommendation to buy or sell securities.
1. What Is Streaming?
- Streaming, otherwise known as OTT content (Over-The-Top Content), is the technology of transmitting audio and video files continuously over the internet.
- The most popular forms of streaming include video streaming, audio streaming, livestreaming, and game streaming.
2. Switch To Streaming
- From 2013 - 2019, American households have increased their spending on video streaming services by 480% and audio streaming spend increased 345%. (Source: Statista)
- This trend is only accelerating, as data from The Trade Desk suggests 27% of Americans will cancel their traditional TV plan this year, a phenomenon known as cord cutting.
- Goldman Sachs believes 1.2 billion people will be a paid subscriber to an audio streaming service by 2030, compared to 341 million in 2019.
- Popular livestreaming and game streaming platform Twitch had a record year in 2020 with an 83% increase in hours watched from 2019. Twitch had 2.1 million average concurrent viewers in 2020, a 69% increase from 2019. (Source: TwitchStats)
- Film studios are ditching the movie theater for streaming services. Warner Brothers has announced blockbuster hits such as Wonder Woman will skip the theaters and go direct to streaming on HBO Max. Disney’s Pixar plans to do the same in 2021.
3. Why Is This Happening?
- Traditional media delivery is limiting, streaming is unlimited. With steaming, users pay a fixed rate for unlimited content that can be accessed at any time, from any device, from anywhere.
- Internet speeds and bandwidth are improving exponentially. From 2000 - 2020, Internet access has increased 1,266%, yet only 63.2% of the world has internet access. As the internet and bandwidth improve, streaming becomes more viable.
4. Key Players
- Netflix (Video Streaming)
- Netflix is currently the largest video streaming service in the world.
- Netflix is behind viral hits Tiger King, Ozark, and the Queen's Gambit.
- Netflix has over 2000 million paid subscribers worldwide as of the fourth quarter of 2020.
- Netflix says the average user streams two hours of content per day.
- Roku (Hardware & Technology)
- Roku connects users to the streaming content they love through their various hardware products.
- The Roku OS is the No. 1 smart TV OS in the U.S and in Canada, and powered more than one in three smart TVs sold in the U.S. during the first nine months of 2020 according to NPD.
- Roku reached 46 million active accounts in Q3 2020.
- Twitch (Livestreaming / Game Streaming)
- Twitch is the most popular livestreaming and game streaming platform in the U.S.
- Twitch was acquired by Amazon for $1 billion in August 2014.
- Twitch users watch 95 minutes per day on average.
- League of Legends was the most popular game streamed on Twitch in 2020.
- Spotify (Audio Streaming)
- Spotify is the most popular audio streaming service in the world.
- Over 50 million tracks are available on Spotify.
- There were 286 million monthly active users of Spotify according to the company’s Q1 2020 report.
Sources: Business of Apps, Company Filings
Related: Streaming 101, How to Invest in Streaming
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