Everyone is winning the streaming wars!

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In a little over a year, Disney+ has accrued nearly half of the number of subscribers Netflix has accumulated over the past decade. Netflix is currently sitting at a lofty 204 million — but is growing much more slowly. Disney's performance has been so phenomenal that Netflix co-CEO Reed Hastings has named Disney his top competitor. He told Bloomberg last September, “If you’d asked us a year ago, ‘What are the odds that Disney+ is going to get to 60 million subscribers in the first year?’ I’d be like 0. I mean how can that happen? It’s been super impressive execution.”

For the record, Disney+ is not second. That honor goes to Amazon Prime Video which has 150 million subscribers. However, it's hard to compare it to Disney+ because Prime is a bundle of different services. After Disney, there is Hulu which has just under 40 million, and then there's a smattering around 10-30M (HBO Max, CBS, Discovery, ESPN and Peacock).

Best of the rest

While Disney+ has been stealing the headlines, Discovery and ViacomCBS have been huge under-the-radar successes in the streaming wars this year. Since the start of 2021, ViacomCBS stock is up 156% and Discovery has gained 141%. Both stocks were powered by the launches of their respective streaming services, Paramount+ and Discovery+ and YTD they are among the top performers in the S&P 500 and, yes, they are doing better than Disney

The backstory: The companies had been written off by experts who thought Netflix, Disney, and other tech/entertainment giants would muscle out these slow-moving dinosaurs in the streaming wars. But while the biggest players have gobbled up hundreds of millions of subscribers, there are plenty of leftovers. Since launching in December, Discovery+ has attracted more than 11 million subscribers, while Paramount+, ViacomCBS's streaming service, is believed to have around 8–9 million subscribers.

Bottom line: Investors have cheered these companies' moves to leverage their content libraries for streaming, proving that as long as you bring beer to the party, no one cares if you show up late. Do I believe CBS and Discovery are long term bet? I'm very skeptical. The average U.S. consumer is willing to pay around $42 monthly for streaming services, per Magid. That's about 3 services monthly. I believe that the AT&T-owned HBO MAX is stronger than both.

Disclaimer: This post is merely my own assessment and is not an investment recommendation. For professional advice, seek input from a licensed investment advisor.


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