Proactive Investors - ITV PLC (LON:ITV) and STV Group Plc (LON:STVG) could be set to benefit from streaming services like Netflix (NASDAQ:NFLX) doubling down on its original content, Shore Capital thinks.
STV, through strategic acquisitions, has been able to transform the scale and capacity of its production division and is now positioned to win commissions to film more content, experts at the bank said.
ITV, which Shore Capital rates a buy, is also well established in the content creation business but is expected to benefit less from it due to the diversity and size of its overall offering.
More Netflix originals to come
Netflix released new viewership figures for the first half of 2023 and its original content accounted for 55% of total viewership.
The Night Agent, Netflix’s most popular original show, was watched for 812 million hours while its most watched licensed show, Crash Course with Romance, was viewed for 235 million hours.
“We remain of the view that Netflix and other streaming platforms will continue to deploy spend on original content as their key growth driver and competitive weapon going forward,” the boutique broker said.
Netflix and Amazon (NASDAQ:AMZN) have spent US$6 billion and US$4.2 billion respectively the UK since 2020 to produce content.
Others to benefit?
Zinc Media Group PLC (LON:ZIN), the production company which has worked with broadcasters like Channel 4, has also caught the eye of Shore Capital.
Earlier this month, the group posted a healthy trading statement, leading to a slight rise in the share price.
It also highlighted the company’s ability to secure and deliver global broadcasters' commissions in the face of numerous industry headwinds.
Zoo Digital Group Plc (LON:ZOO), which offers production services like subtitling, is believed to be on the front foot once again after its lost half of its market value in six months, Shore Capital said.
Additionally, Facilities By ADF PLC (LON:ADFF), which provides production vehicles like trailers, offers a unique investment opportunity to the typical studios.
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