Hot Picks: Streaming gains continue to reshape media sector outlook

Media stocks are gaining attention as streaming adoption reshapes viewing habits and industry dealmaking accelerates.

BNN Bloomberg spoke with Ken Leon, director of research at CFRA, who highlighted opportunities across Roku, Universal Music Group and Fox.

Key Takeaways

• Streaming platforms continue to gain share as consumers shift away from traditional cable and demand easier content navigation.
• Platform simplicity and user experience are key competitive advantages in retaining viewers and driving engagement.
• Advertising is emerging as a major growth driver as companies monetize large streaming audiences.
• Industry consolidation and strategic deals are shaping valuations and increasing investor interest.
• Live content, particularly sports and news, remains a critical differentiator for traditional media companies.

Read the full transcript below:

ANDREW: On Hot Picks today, we are zeroing in on three ideas in media. Our guest has Roku as his top pick. We’re joined by Ken Leon, director of research at CFRA. Ken, thank you very much for joining us. We know Roku has millions of devices out there. They’re essentially a streaming platform. Can you just remind us what is the basic service they provide?

KEN: So, great to be with you. Roku is in a very unique position where they have a platform or operating system that makes it easy for viewers in streaming to really navigate quickly across different network providers. That is a position that enables them, in terms of viewership with their devices, to be number two in the U.S., number one in Mexico. And I think the other aspect about Roku is whether they were going to be at risk to be totally eliminated or replaced. And we really see that they’re in a position where they have a durable business model, one that in the last few quarters is not only generating very high revenue but positive EBITDA and profitability. That’s a major change versus the last 10 years, and it speaks to why we upgraded the stock to a strong buy several months ago.

ANDREW: Is that partly because people find it cumbersome switching between, say, Netflix and Amazon Prime?

KEN: It really is. Even if you’re a household as a pure streamer, it’s still sometimes clumsy. And then if you’re doing it through a cable provider, maybe in Canada, like Rogers, it’s even slower. So that ability to be so agile enables them to have stickiness with what they offer, whether it be the operating system itself. They still — it’s a lower-margin business — but Roku TVs or their Smart Stick. Ultimately, I think, you know, when you look at Roku, they could be very attractive to a larger entertainment company. They also see a chance to open up the door for advertising revenue, which they’re able to do algorithmically within their platform.

ANDREW: Apparently, they are famous for keeping it relatively simple for people who are tech illiterate or tech challenged.

KEN: That’s right.

ANDREW: Sounds like good news. Universal Music Group — Pershing Square Capital, Bill Ackman’s outfit, is interested in a bid, apparently. Would you be a buyer of Universal Music right now?

KEN: We would. We’ve had a buy for some time. I think getting in at 18 — the stock, you know, on the sell-off a month ago was down like 15. And I think first, as a backdrop, before we get to Bill Ackman and Pershing Square, is that there’s a number of high-profile companies that want to be listed in the U.S. market as it relates to semiconductor — Samsung, SG Hynix. Bill Ackman thinks a stock that’s trading on the Amsterdam exchange, even though their operations headquarters are in Los Angeles, should be trading in the U.S. He also has a proposal that’s kind of like a light kiss of a friendly takeover, whereby his proposal looks to take this company and find different ways to enhance their franchise, including keeping management contracts. So it’s an interesting dance that’s going on, but what it does is it speaks to Universal Music Group, along with two others, Warner Music Group and Sony, dominate the kind of wholesale part of the exchange between artists, performing artists. And of course, what’s been pushed out, either in terms of streaming music, like on Spotify, which we have a buy, or their ability to get paid with live concert performances from other companies. So I think Universal Music Group has been kind of viewed to be a slower grower, but what Bill Ackman is trying to do is try to get more visibility to the value of this company in ways that it can improve some of its performance.

ANDREW: We’re really tight for time. We’ve only got about 60 seconds. If Ackman does take it over, will that be good for Universal, or if Ackman succeeds in floating it in the U.S., will that be good for Universal Music shareholders?

KEN: We have a $24 target price. I think it’s good for investors, public holders, and given the controlling interest here, he also has to get approval from one of the leading European families. So this will be kind of a deal that really needs major shareholders to be in support of this. I like the opportunity.

ANDREW: Finally, we are tight for time, as I mentioned, and I’m sorry about that. Fox trades on NASDAQ. Just remind us what they do. Why do you like this stock?

KEN: It’s been probably the biggest surprise in the last two years why a company really didn’t take a big stab at the streaming market. They do have something that’s quite interesting, which is called free advertising or FAST streaming. But principally, this stock has done great for a couple reasons. They’re the market leader in terms of live news and live sports in the U.S. Secondly, with the Murdoch family having controlling interest here, they are continually buying back stock. So I think what the big surprise was, versus asking all media analysts two years ago why would I want to own Fox, it was the major pivot from general entertainment, including streaming, to live sports, and that’s what Fox does at a very high level. And the stock has been rewarded, so we like the upside and feel it’s still a buy at these levels.

ANDREW: Ken, thanks very much indeed. Really appreciate it. Ken Leon, director of research at CFRA.

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This BNN Bloomberg summary and transcript of the April 17, 2026 interview with Ken Leon are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.