- Just because a company operates a streaming service doesn't mean that that platform is the most important aspect of its business or its highest revenue driver.
- The type of content on a streaming service and the amount the company is planning to spend on that content is another indicator for investors about how a company values its streaming service.
- Average revenue per user can be an indicator of the quality of revenue a company is generating and as a metric to see how a company is performing over time.
In January, "Bridgerton" smashed Netflix viewership records to become its biggest series ever, a feat that came barely a week after the company reported that it had topped 200 million subscribers globally.
Hot on Netflix's heels is Disney, which topped 100 million subscribers Tuesday, just 16 months after its debut.
But what does this mean for investors?
Consumers are increasingly turning to streaming services, ditching traditional cable — and often commercials, too — for bingeable content they can watch on their TVs, tablets and phones. As the streaming space widens, and more players enter the fray — as Paramount+ did last week — investors have a lot to take into consideration.
What differentiates one company or streaming service from another? How does a service generate revenue? How much money is a company spending on content? How many subscribers does it have and how much money is made from each user?
The answers to these questions can go a long way to determining the value of a streaming service to a company and how much influence its performance has on a company's stock.
Here are four things investors should know about the ongoing streaming war before scooping up shares: