Mainly through its YouTube platform, Google become a major player in the streaming market. In fact, comScore found that the search giant, led all video destinations in July with more than 143 million unique viewers. Considering Google is heavily invested in online streaming, and it has the viewership that advertisers are looking for, Google could benefit heavily from streaming video's growth in the coming years. But it didn't always look that way. After acquiring YouTube for $1.65 billion in 2006, some wondered if Google made the right move by paying so much for a company that wasn't profitable. But now, it seems that Google did make the right move. It is both the leading video provider on the Internet and the Web's top advertiser. Those two elements should eventually help YouTube turn a profit. In fact, Barclay analyst Douglas Anmuth reported earlier this year, that he expected the video site to generate $700 million in 2010, representing its first profit. Akamai ( AKAM):
Like Google, the success of streaming has only helped Akamai. According to the company's home page, it averaged over 1.4 million media streams today alone through its media-delivery service. Akamai says it provides digital-media distribution to "five of the top six online music sites, 29 out of the 30 media/entertainment companies." Most importantly, it provides media distribution for Apple's ( AAPL) iTunes platform, the world's largest music store and an increasingly viable video-streaming service. Perhaps that is why Akamai has enjoyed such success over the past few years. In 2006, the company generated $428 million in revenue and a $57 million profit. Last year, that figure rose to nearly $860 million in revenue and $146 million in profit. Meanwhile, investors are jumping at the chance to get in on Akamai's success. At the beginning of 2009, its stock price was at approximately $15 per share. As of this writing, the company's shares are trading above $46. Going forward, things look bright for Akamai. As Merriman Curran analyst Richard Fetyko pointed out in a research note earlier this year: "More Web-connected devices like the iPad, mobile devices, IPTV, and HD content will continue to drive volumes up dramatically in the next two-three years." In other words, Akamai has enormous upside.
It's not alone. If Web-based video streaming is the future, it is easy to point towards Netflix as the company that will carry that market's banner going forward. In a statement summarizing its most recent quarterly filing, Netflix CEO Reed Hastings said that "consumers are clearly enthralled by our offering of unlimited movies and TV shows streamed through the Internet." He pointed to the company's addition of over one million net subscribers to prove that. According to Netflix, it now has more than 15 million subscribers, representing a 42% gain in subscribers year-over-year. Such immense growth in Netflix's subscriber base can be partly attributed to the company's aggressive streaming strategy. Currently, Netflix's Instant Streaming service is available on a slew of set-top boxes, including Blu-ray players, standalone hardware products, and all major video game consoles. It's even available in some televisions. Aside from that, the company provides its streaming service via its Web site and on Apple's iPad, iPhone, and iPod Touch. Recently, Netflix announced a $1 billion deal with Paramount Studios, Lions Gate Entertainment ( LGF), and MGM Studios that would allow the company to stream the studios' content just 90 days after they're available on cable-streaming offering, Epix. That alone should help bolster Netflix's streaming service, making it arguably the best option in the space. And for just $8.99 per month, it's not asking consumers for much to get access to all that content. Looking ahead: Going forward, it's tough to bet against streaming. Consumers are finding it to be far more convenient than using a DVD to watch a movie or television show. Major studios are starting to see value in it. And service providers continue to boast outstanding functionality at an affordable price. The future is in streaming, and some companies, especially Google, Akamai, and Netflix, stand to gain heavily.