Zooming In On The Streaming Boom

By Glenn Dyer | More Articles by Glenn Dyer

A tale of two companies in these days of COVID-19.

Zoom Video Communications has been, along with Netflix, one of the big winners from the COVID-19 crisis.

In the space of four or five months, it has gone from just another tech stock with a video product similar to offerings from bigger companies like Microsoft, Apple, and Google, to the market leader and standard to which the others now compared.

Zoom is now a synonym for online video conference calls and meetings, much in the way that Netflix has become a short-handed way of describing streaming video, despite having to battle for years against dismissive giants like Disney, Fox, News Corp, Comcast and Google, and Apple. All have been forced into catch up but so far Netflix has remained ahead and if anything is extending the gap.

Now Zoom is worth nearly $US78 billion, which is more than the market value for two hotel giants – Marriott and Hilton and all the big US airline companies combined (a message there about the future of business travel). Zoom’s market value also tops that of six Dow companies, including Goldman Sachs Group and Caterpillar. Zoom shares are up 282% (even after a 5% slide on Monday as tech stocks sold off) year to date.

Netflix shares lost 5% as well on Monday but are still up a more sedate 62% so far in 2020. Netflix is still worth more than $US241 billion, which is more than all the other big media companies like Comcast and Disney.

Zoom’s market value also easily tops those of the Murdoch companies, News Corp ($US7 billion), and Fox Corp ($US15.3 billion). Disney shares are down 19% so far this year to $US215 billion. As the largest shareholder in Disney collectively, the Murdoch Family Trust’s worth has also sunk by 19% for Disney, 15% for News and Fox, down 31%.

Netflix reports its June quarter earnings on Friday morning, Sydney time as does Microsoft for that matter. Solid figures from both should see the tech boom stagger onwards, weak results will trigger a sell-off. Zoom’s figures later this month will be important, but not the potential tripwires from Netflix, Microsoft, Facebook, Amazon, Apple, and Alphabet/Google.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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