Media stocks pop as Roku rally lifts sector

A Roku remote in an arranged photograph in Hastings-on-Hudson, New York, on May 2, 2021.

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Media stocks popped Thursday as Roku’s 30% rally lifted the entire sector.

Wall Street celebrated the streaming device company’s third-quarter report Wednesday, in which Roku reported strong trends in content distribution and advertising as well as uptake of its Roku-branded TVs.

Paramount and Warner Bros. Discovery both closed up about 10% Thursday. Disney shares closed up nearly 3% following news of the media giant’s agreement to buy Comcast’s remaining stake in Hulu.

Netflix and Comcast both rose more than 1% Thursday.

Roku, known for its plug-in streaming device players, provides users access to all the major streaming services. The company’s active accounts for the third quarter beat analysts’ estimates, coming in at 75.8 million, compared to the 75.33 million Wall Street expected, according to StreetAccount.

Strong usership for Roku means more points of access for subscribers to Paramount+, Max, Netflix, Peacock and other streaming services.

The positive results follow something of a change of pace for the streaming industry after a period of uncertain subscriber growth.

Netflix reported a surprise jump in subscribers in its third-quarter earnings report last month, driven largely by its ad-supported subscription tier. The company said Wednesday that its ad-supported tier has amassed 15 million subscribers, tripling its previously announced total of five million in May.

Paramount reports its quarterly earnings report after the market close Thursday. Warner Bros. Discovery and Disney each report next week.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

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