High inflation, rising interest rates, and a weak macroeconomic environment have led to slowdowns at companies like Netflix (NASDAQ: NFLX) and Roku (NASDAQ: ROKU) in 2022. Consumer behavior normalized following a pandemic-fueled surge in demand, and it's making matters worse. Investors have pressed pause on these businesses, and both have seen their share prices fall more than 50% this year compared to a 28% drop for the Nasdaq Composite.
Which is the better streaming stock for investors to own: Netflix or Roku? Let's focus on each company's distinct advantages to see which one reigns supreme.
With a first-mover advantage in the now-crowded streaming market, Netflix benefits tremendously from its massive scale, with trailing-12-month sales of $31.5 billion and a whopping 223 million subscribers today. This size allows the business to spend a considerable amount on content ($17 billion this year), while spreading out these fixed costs over a giant customer base. Rivals can't compete with Netflix in this regard, and their streaming services will probably bleed cash for the foreseeable future.
Source Fool.com