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Cramer Breaks Down Investing In Streaming Video: Content Is King

Cramer Breaks Down Investing In Streaming Video: Content Is King

Investors looking for exposure to a long-term growth story should consider the over-the-top video space, which gives consumers immediate access to TV content they want when they want it, CNBC's Jim Cramer said during his daily "Mad Money" show Friday.

What Happened

The streaming video space requires two entities to work together, Cramer said: 

  • Content from studios like Walt Disney Co (NYSE: DIS).
  • A platform to deliver the content to consumers like Roku Inc (NASDAQ: ROKU)'s streaming sticks.

If investors were to pick between the two separate but equally important segments, the phrase "content is king" should come to mind, Cramer said.

Disney continues to work on its own streaming platform, which may include the "best library of content in the world," as it would include the recently acquired Twenty-First Century Fox Inc (NASDAQ: FOXA)'s entertainment assets, the CNBC host said.

Disney's platform will also include ESPN and its own core and legacy assets.

Why It's Important

Disney's stock isn't cheap at 15 times earnings, but compared to more established players in the streaming video space like Netflix, Inc. (NASDAQ: NFLX), Disney's stock should be bought, Cramer said.

Despite being "one of the pioneers" of the streaming space, Netflix's recent surge implies investors are "chasing" the stock; Cramer said a core tenet of his investment philosophy is to be a "no-chaser guy."

Honorable Mention: WWE

Wrestling and media platform World Wrestling Entertainment, Inc. (NYSE: WWE) has built an " incredibly successful" streaming platform, and investors have been rewarded, with the stock quadrupling in value in less than two years, Cramer said. The company proved to all that it "got it right" and has become the business model for other sports organizations to follow, he said. 

What's Next

"In the end, when it comes to streaming platforms, I believe the best content will win," Cramer said. "And Disney's got amazing content."

Disney's April analyst meeting could prove to be "very compelling" if Disney CEO Bob Iger offers a comprehensive and complete streaming strategy for the future, Cramer said. 

Related Links:

The Mouse And Murdoch's House: Morgan Stanley Bullish On Post-Deal Landscape For Fox, Disney

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Photo courtesy of Roku. 


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