According to Needham’s Laura Martin, the company at the forefront of the streaming wars may not be Netflix or the other usual suspects. The analyst said investors should be “much more wary” of large-cap tech giants Amazon and Apple, which are “a growing threat to incumbent streaming companies”. “, as they leverage their substantial businesses to build their video platform. “AAPL and AMZN are the winners of the Streaming War (in our view) because they have virtually unlimited resources, the best first-party data Walled Garden, and a leading tech team. head,” Martin wrote in a note Monday. Martin expects the two tech companies to outpace their rivals as they expand into global digital advertising and begin raising bids for live sports rights. Global digital advertising, which represents a total addressable market of $650 billion annually, will generate more revenue for companies. Amazon already has about $35 billion in ad revenue, while Apple is in the process of building out its advertising platform. Over the past two years, major advertisers have increasingly shifted their dollars to streaming video, as the number of households installing smart TVs skyrocketed during the pandemic, the report said. Meanwhile, the fact that Apple and Amazon are engaged in a bidding war for live sports coverage is a threat to all streaming services trying to capture the dwindling attention of consumers. use. They are competing with video games and consumer-generated content platforms like TikTok. Martin writes. “Only certain sports, movies or TV franchises have the ability to reallocate mass audiences. These assets become more valuable over time.” Martin believes Apple, Amazon, Disney, YouTube, Roku, and Vizio will emerge as winners in the streaming wars, while pure streaming companies with no other assets to offset the losses are growing. “at a structural disadvantage.” Still, “losing the streaming wars can be a winning strategy” for some companies with deep content libraries, Martin said. Martin writes: “We expect the consolidation to drive the growth of our movie and TV series over the next five years, and that smaller companies (under $50 billion in market cap) that own content IPs will become a takeover target. “Evidence includes Disney’s acquisition of the Fox library, DISCA’s purchase of Warner Media and AMZN’s purchase of MGM. We believe that NFLX choosing Microsoft as its SSP, which makes no sense to anyone in AdTech, is a step forward. take a strategic first step towards NFLX trying to sell itself to MSFT,” added Martin. Martin hopes Paramount can benefit from the streaming consolidation. — Michael Bloom of CNBC contributed to this report.