Streaming Giants: A Comparative Analysis

Key Takeaways

• The media and entertainment industry experienced a mixed year in 2025, with some companies seeing significant gains while others struggled.
• The rise of AI is expected to be a major force in the industry, driving innovation and margin expansion, but also creating uncertainty for management teams.
• Streaming market repair, industry consolidation, and robust growth in advertising revenues and consumer spending on premium entertainment experiences are expected to be key trends in 2026.
• Companies such as Fox Corp., Imax, Roku, and Spotify were among the top performers in 2025, while Netflix and Disney saw more modest gains.
• The cinema industry continues to face challenges, with some companies like Imax seeing significant gains while others like AMC Theatres-parent AMC Entertainment Holdings struggled.

Introduction to the Media and Entertainment Industry in 2025
The media and entertainment industry experienced a mixed year in 2025, with some companies seeing significant gains while others struggled. The U.S. stock market rose in 2025, with the broad-based S&P 500 stock index up 17.5 percent for the year, but media and entertainment and related stocks provided a mixed picture. According to Morgan Stanley analyst Benjamin Swinburne, the outlook for 2026 is expected to be shaped by three key trends: the looming impact of AI, continued streaming market repair, and robust growth in advertising revenues and consumer spending on premium entertainment experiences.

The Rise of AI in the Entertainment Industry
The rise of AI is expected to be a major force in the industry, driving innovation and margin expansion, but also creating uncertainty for management teams. Swinburne noted that AI is "simultaneously a catalyst for faster product innovation and margin expansion, and a source of genuine uncertainty for management teams navigating the potential impacts on audience behavior, IP monetization, and competitive intensity." This uncertainty is likely to drive investor sentiment and ultimately earnings growth in the industry.

Streaming Market Repair and Industry Consolidation
Streaming market repair and industry consolidation are expected to be key trends in 2026. Companies such as Netflix, which rose 5.7 percent in 2025, and Warner Bros. Discovery, which jumped 172 percent, were among the top performers in the industry. The takeover of Warner Bros. by Netflix is expected to have significant implications for the company and the industry as a whole. Other companies, such as Fox Corp. and Imax, also saw significant gains in 2025, with Fox Corp.’s stock rising 47.3 percent and Imax’s stock rising 46 percent.

Cinema Industry Challenges
The cinema industry continues to face challenges, with some companies like Imax seeing significant gains while others like AMC Theatres-parent AMC Entertainment Holdings struggled. AMC Entertainment Holdings saw its shares plunge 59 percent in value year-to-date, while Cinemark Holdings saw its shares fall 25.4 percent. However, other companies like Sphere Entertainment, which showed attractive unit economics with its production of The Wizard of Oz, saw significant gains, with its stock rising 131 percent.

Music and Audio Entertainment Stocks
Music and audio entertainment stocks danced to different tunes in 2025. Warner Music Group shares fell 2.5 percent, while Universal Music Group shares fell 9.3 percent. However, streaming giant Spotify saw its stock rise 27 percent, and iHeartMedia saw its stock rise 109 percent. Satellite radio giant SiriusXM saw its stock price fall by just under 11 percent.

Gaming Stocks
Among gaming stocks, Electronic Arts, which is set to go private in a mega-deal, saw a 40 percent year-to-date rally for its shares. Take-Two Interactive Software also saw a significant gain, with its stock rising 39 percent. Other companies, such as Roku, saw significant gains, with its stock rising 50 percent.

Conclusion
In conclusion, the media and entertainment industry experienced a mixed year in 2025, with some companies seeing significant gains while others struggled. The rise of AI, streaming market repair, and industry consolidation are expected to be key trends in 2026. Companies that are able to adapt to these trends and navigate the challenges of the industry are likely to see significant gains, while those that struggle to adapt may face significant challenges. As the industry continues to evolve, it will be important for companies to stay ahead of the curve and innovate in order to remain competitive.