Coronavirus has put the movie industry in a fix. Not only have stay-at-home orders and rapidly rising infections around the country put a hold on new projects but also made it difficult for movies to release with proper screening, given that theatres around the country are shut as well. However, filmmakers figured another way to do business as usual with an over-the-top release (OTT).
In fact, given the surge in demand for streaming services and their subscriptions during the lockdown, getting to the target audience and generating revenues via OTT isn’t a bad idea. Let’s thus take a look at some streaming services that can make the most of this trend.
Coronavirus Impacting Movie Industry
Since coronavirus confined people to their homes for a few months earlier this year, most of them took to watching shows online via their favorite streaming applications. The closure of theatres and the inability to screen movies on the big screen during the said period was also a reason for people moving on to streaming platforms instead.
While the shuttered theatres are certainly a big problem for theatre owners and the vast stream of revenues that come from a theatrical release, it has in fact, created a window of opportunity for filmmakers and owners of streaming services to make the content available to their customers first.
Since theatres really don’t have leverage right now, whether or not to make the new movies available to customers in their homes is a decision that entirely falls upon the media house responsible for the movie.
Why OTT Releases Could Gain Pace Ahead
After as many as 16 states revoked their reopening plans as of Jun 29 with COVID-19 cases surging across the country, there’s little doubt that OTT releases might actually help filmmakers in taking their business to the next step.
Many media houses are also taking a different approach to release their films. For example, Universal’s Trolls World Tour debuted simultaneously online and in theaters on Apr 10 this year. Some other movies such as The Hunt, Emma and The Invisible Man were also available for a 48-hour rental for a price of $19.99.
The reason why this new trend is rather strange is because moviemakers usually wait for about three months (90 days) from a movie’s theatrical release to put it up for home viewing. However, Universal has decided to follow its trend and launch a movie in both theatres and at home. However, the company is trying out this policy for films that have a budge in the range of low-to-mid tier.
Sony also did something similar with Vin Diesel’s Bloodshot. The film was released around the second week of March in theatres but in just a week it was made available for digital rental and purchase. Warner Brothers (of WarnerMedia, LLC) also followed suit by giving Birds of Prey an early digital release.
Therefore, one may conclude that the trend of offering films for an over-the-top release could be here to stay for a while.
3 Stocks to Watch
We have, therefore, chosen three stocks of filmmakers and streaming services that stand a good chance to gain from OTT releases of movies. All these stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc.’s AMZN Prime Video is an on-demand streaming service. The streaming service is not only going over the top with new shows but also is now looking to add live sports to its list of services. The company is hiring professionals who can redefine the way its customers watch “24/7 linear broadcast TV content,” per a job listing the company put out in recent weeks.
Amazon has an expected earnings growth rate of 91.5% for next year. The company belongs to the Zacks Internet – Commerce industry. The Zacks Consensus Estimate for the company’s current-year earnings has moved 1.4% north in the past 30 days.
Netflix, Inc.’s NFLX offers streaming services in the United States and abroad. The streaming service has largely gone by over-the-top releases of its shows. One of its shows The Irishman had been refused a one-month window by major theaters in the country. But the show released on the streaming service’s platform and gained strong viewership.
Netflix has expected earnings growth of 34.7% for next year. The company belongs to the Zacks Broadcast Radio and Television industry. The Zacks Consensus Estimate for the company’s current-year earnings has moved 0.2% north in the past 30 days.
AT&T Inc. T launched a streaming service that is similar to Disney+ and Netflix. The company’s AT&T TV offers hundreds of live TV channels along with 40,000 plus on-demand titles and 500 hours of DVR space on a set-top box, per TechCrunch. AT&T is the owner of WarnerMedia.
AT&T has expected earnings growth of 5.3% for next year. The company belongs to the Zacks Wireless National industry. The Zacks Consensus Estimate for the company’s current-year earnings has moved 0.3% north in the past 30 days.
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