Streaming adoption has been accelerated by COVID-19 shelter-at-home orders, dark cinemas, no live sports, and divisive/negative topics dominating the news cycle, in our view. In 2Q20, subscription-driven streaming services (SVOD) benefited economically as global SVOD subs grew 20-50% faster than our pre-COVID estimates. Free ad-driven (AVOD) streaming services reported robust installed-base and viewing-hours growth but weak advertiser demand during the pandemic pushed economic upside into future quarters. We recommend ROKU and TTD, based on this research. We worry most about NFLX because we believe that all streaming services must offer a freemium ad-driven business model (over time) to onboard new subscribers, and NFLX has disavowed all advertising.
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