Streaming Sites Netflix, Amazon Were Wall Street’s Big Winners in 2015

Netflix shares performed better than any other company in the S&P 500, with rival Amazon in second place

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Most media stocks aren’t going to have a happy ending in 2015, but those that juggle tech and entertainment will be the market’s heroes.

Entertainment technology stocks were a bright spot this year in an overall humdrum market. Even though media companies endured a bumpier ride than most, those that are as much tech firms as they are entertainment companies are set to be the best performers.

Streaming service Netflix had the single strongest performance of any stock in the S&P 500 this year. Its shares, which have rocketed 140 percent with three days of trading left in the year, overcame investor jitters about slowing subscriber growth in the U.S. as focus shifted to its ambitious international expansion.

Netflix kicked off 2015 with a commitment to broaden its reach to 200 countries by the end of 2016. This year it made inroads into the countries with the lowest hanging fruit: places like Australia, New Zealand and Japan, which already have a tech-savvy population hooked up to strong Internet infrastructure. The service has been a hit with global consumers, and investors have driven Netflix share prices up, even as growth in U.S. subscribers stumbled.

The No. 2 stock this year? Amazon, Netflix’s biggest rival in online subscription video. Shares in the online retailer, which also operates a streaming TV and movie service as part of its Prime membership program, have climbed 118 percent since the beginning of the year.

But don’t be tricked. That doesn’t mean streaming video was the key to market this year. Amazon’s status near the top of the list is largely thanks to its other operations.

Although Amazon’s Prime Video had a strong year, including Golden Globe and Emmy wins for its original show “Transparent,” the service is a sideshow to Amazon’s main business: consumer online retail, which is the engine for the vast majority of its revenue. Amazon also enjoyed investor esteem for its profitable, high-growth Amazon Web Services arm, a business-to-business operation that essentially rents out the company’s computing power to others. (Even Netflix is an AWS customer.)

Those would be stellar performances no matter what the industry, but they stand out more amid the troubles plaguing most traditional entertainment stocks.

Disney is an outlier. Its shares enjoy the sheen from box office record breaker “Star Wars” even if questions about ESPN subscriber growth dampen the mood, and they have risen 13 percent this year overall

However, CBS has fallen 15 percent, Time Warner is down 25 percent and Twenty-First Century Fox is down 26 percent. Viacom, hounded by advertising revenue slides because of weak ratings at some of its networks, has endured a 45 percent tumble in class-B shares.

Is there a silver lining to such poor showings? At least every terrible stock year means the year to come holds plenty of room for a rebound.