Topline
Streaming giants like Netflix, Disney and Warner Media’s HBO Max will dominate the 2022 Oscars ceremony this weekend after gaining a host of nominations—including for Best Picture—and if history is any guide, their stocks could see a short-term boost from big Academy Award wins.
The streaming wars heat up as the likes of Netflix and Disney compete for a host of Oscars awards.
Key Facts
Streaming services will dominate the Oscars this year, grabbing no less than half of the nominations for Best Picture, including Netflix’s Power of the Dog and Warner Media’s Dune.
Netflix was nominated for 27 Oscars, the most out of any studio, while Disney garnered 23 nominations, Warner Media’s HBO Max has 16, AppleTV+ has six, Amazon Studios has four and Paramount has one.
Winning big at the Oscars will not only generate buzz but could also result in a short-term stock boost: Historically, shares of streaming platforms tend to jump after earning a large number of nominations or taking home several Academy Awards.
Netflix’s stock surged to new record highs shortly after winning Oscars in 2018 and 2019, and shares have seen a boost in recent years from the company racking up an increasing number of nominations and taking home no less than seven Academy Awards last year.
With the Oscars taking place this Sunday, shares of major streaming companies were mixed on Friday: Netflix added to losses this week and fell nearly 2%, Disney and Apple were down slightly, while AT&T (which owns Warner Media) and Paramount Global (formerly Viacom CBS) both gained around 1%.
Surprising Fact:
Netflix is still the only company turning a profit in the streaming business, as the industry remains in a highly competitive phase where rivals are spending tens of billions of dollars on content and marketing in an effort to win subscribers. The streaming giant spent over $17 billion on original content in 2021 alone, according to filings with the Securities and Exchange Commission. Analysts at Goldman Sachs, meanwhile, estimate that the top 10 streaming companies will spend around $130 billion on content next year, a gain of around 10% from 2021.
Key Background:
Shares of streaming giants like Netflix have slumped in recent years, after getting a boost during pandemic lockdowns in 2020. Shares of both Netflix and Disney have widely underperformed the market over the past 12 months, falling by roughly 25% or more. Paramount Global, formerly Viacom CBS, is down 45% over that same period, while shares of larger companies like Apple, Amazon and AT&T, which are less affected by streaming, have been more mixed.
Big Number: 222 Million
That’s how many subscribers Netflix reported at the end of 2021. Though it continues to add new customers, rivals like Disney (130 million subscribers) and HBO Max (74 million) have also seen steady subscriber growth and are not far behind. Paramount Global, which has a vast collection of classic content to draw from, is also doubling down on subscriber growth, aiming for 100 million by the end of 2024.
Further Reading:
Oscars 2022 Race: Writers, Producers Guild Awards Fuel ‘Coda’ Momentum (Forbes)
Wall Street Firms Are Slashing S&P 500 Price Targets—Here’s What They Predict For Markets (Forbes)
Source: https://www.forbes.com/sites/sergeiklebnikov/2022/03/25/heres-why-streaming-stocks-like-netflix-and-disney-could-be-set-to-jump-after-the-oscars/