Streaming media was one of the biggest success stories of 2020. You’ve can see what I’ve already had to say about it here, here, and here. Now, that trend is shaping up to carry right on through 2021.
Walt Disney Co.’s (NYSE: DIS) Disney Plus gained almost 90 million subscribers in less than a year and became a platform to release its newest movies.
Netflix Inc. (NASDAQ: NFLX) added over 25 million subscribers in the first half of the year, and multiple new platforms launched including Peacock, NBCUniversal’s (NASDAQ: CMCSA) streaming platform, and HBO Max.
This also meant that platforms like Roku Inc. (NASDAQ: ROKU) and connected TV advertising companies like The Trade Desk Inc. (NASDAQ: TTD) had an incredible year as viewers went online. Roku and Trade Desk shares both popped over 169% YoY.
Now, we have an entire list of which companies to buy, and which companies not to buy, to take advantage of paradigm shifts in the modern market just like this one. You can get started with them right here.
But just because the year is over doesn’t mean that streaming is going to take a break. In fact, we are still in the early days. With over 75 million U.S. households with cable, satellite, or telecom TV packages, there are a lot of people set to make the switch.
The fight for video streaming subscription dollars is going to be a big story for 2021 as multiple billion-dollar streaming services compete for attention. They will bring in big movies and top-quality content in order to reduce churn and bring in new subscribers.
Everyone will not survive as we have seen with newly launched Quibi, which failed to attract enough customers to avoid folding.
This is why I’m focusing on a newly public streaming company that has found a niche that Apple Inc. (NASDAQ: AAPL), Disney, and Netflix haven’t captured, making it one of the best streaming stocks of 2021.
Having been around since 2015, CuriosityStream Inc. (NASDAQ: CURI) recently became public through a SPAC with Software Acquisition Group. It is now the only pure play publicly traded factual media and entertainment company.
Just the Facts
Now you may be thinking that factual media such as nature and history shows might not be that big of a category, but it’s the complete opposite. There is a significant and growing audience for this type of content.
In fact, Planet Earth II was the highest rated U.S nature show and most watched unscripted tv show on BBC America. In the UK it drew 12.26 million views or roughly 40% of the television viewing public.
The first thing that drew me to this company was that it was started by John Hendricks, the founder and former chair of Discovery Inc. (NASDAQ: DISCA). He started a new company instead of building this out of Discovery, as a new company wouldn’t be tied to an infrastructure that was in secular decline.
He wanted a fresh start unencumbered by legacy pressures of cable operators. He saw what other streaming providers were doing and took advantage of an opening in a large addressable market.
In the last few years and especially 2020, there has been a massive increase in video consumption as OTT services gain significant traction with major networks launching their own services. John saw this transition happening as content shifted to digital platforms and saw the gap of factual content.
That’s not to say Netflix doesn’t have shows that fit this category, but it was never a focus. Netflix is more movies and scripted drama, and Hulu is amusement and general entertainment.
CuriosityStream delivers almost every category of factual entertainment, including science, history, technology, nature, society, and lifestyle.
A Niche of Its Own
This has helped CuriosityStream amass 13 million subscribers, up 108% year over year. Revenue was also up similarly from $4.8 million in Q3 2019 to $8.7 million in Q3 of 2020.
This is still a very early-stage company, but its strategy is paying off and could cement it as the de facto streaming service for factual content. Even as Discovery launches its own streaming platform, Discover+, its content still has a big focus on entertainment, which may help sway people to CuriosityStream.
Right now, it has five scalable lines of revenue where it sees a revenue opportunity of almost $400 million by 2025. This includes offering its service through Prime Video, Roku, and others, bundled with Pay TV packages, through educational partnerships, advertising, and program sales.
Over $120 billion is spent annually on non-sports content, and CuriosityStream’s cost is significantly lower than many of the other streaming services. Its most affordable plan is only $2.99 a month, and its most expensive is $69.99 a year for all 4K content.
It is able to offer these lower prices as the cost of production is also much cheaper than many scripted shows on other platforms. Where an hour-long show may cost around $100k, popular scripted shows like “Game of Thrones” cost $15 million an episode.
While growth may not continue at the current 100%+ rate that it is today, it is adding content fast and quickly growing its distribution.
It recently added a high-profile series called Beyond the Spotlight, which is produced by Leonardo DiCaprio and has already featured people like Shaquille O’Neal, Kristen Bell, and Samuel L. Jackson. You can also find shows narrated by David Attenborough, one of the most prolific individuals in nature shows.
If CuriosityStream continues to execute, it could be one of the biggest streaming stories of 2021