Streaming Is Winning the TV Battle — And That Bodes Well for These Holdings
Share gains mixed with advertising revenue models line up well and reinforce our investment rationale for several portfolio names.
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One of the tenets of our position in The Trade Desk TTD is the accelerating viewership of streaming video and connected TV mixed with the growing usage of advertising revenue business models across those platforms. That combination is also helping drive Amazon’s AMZN advertising revenue stream as it monetizes its Prime Video platform, Apple’s AAPL Apple TV+ efforts, not to mention those for Bullpen resident Netflix NFLX. The latest data from Nielsen show further gains for streaming in November and when we compare the findings against those for November 2023, it becomes clear those gains are coming at the expense of cable and broadcast TV.
Digging deeper into those year-over-year figures, we see Alphabet’s GOOGL YouTube not only remained the largest platform inside streaming, but its market share grew year over year in November, taking share from Comcast’s CMCSA Peacock, Disney’s DIS Hulu, and Warner Bros. Discovery’s WBD Max. To us that, along with Alphabet’s Willow announcement earlier this week, reminds us that the company is far from a one-trick pony.
The above figures also help explain the recent decision by Comcast to spin off its cable networks and digital assets into a stand-alone company. With fewer subscribers, cable networks are generating less revenue from both subscription fees and advertising. Advertisers are increasingly shifting their budgets to digital platforms where they can target audiences more effectively.
Earlier this week, we walked through Group M’s favorable outlook for the digital advertising market next year. Paired with the share gains found in Nielsen’s data, we remain well positioned with our holdings in Trade Desk, Alphabet, and Meta. We should also see favorable year-over-year gains in the higher-margin advertising businesses at Amazon, Apple, and Costco COST.
At the time of publication, TheStreet Pro Portfolio was long TTD, GOOGL, META, AMZN, AAPL and COST.
