There are a growing number of streaming services and many people believe that internet television will eventually replace much of linear TV, as the world is rapidly adopting streaming video in all its forms.

This leaves investors wondering what is the best way to profit from this once-in-a-generation shift in entertainment delivery. There's a growing divide between paid and ad-supported services, as well as peripheral businesses that benefit from them. Here are a few obvious choices and some that investors may not have considered to profit from these changes.

Sandra Bullock rowing a boat wearing a blindfold in a scene from Netflix original movie Bird Box.

Sandra Bullock in the Netflix original movie "Bird Box." Image source: Netflix.

The one that started it all

The most popular and well-known service is Netflix (NFLX 0.27%), which pioneered streaming video as we know it. From its humble beginnings more than a decade ago, the company gave birth to an industry. With 139 million subscribers and growing, it's the most obvious pure play among paid streaming services.

Netflix stock has already gained 30,000%, so some would argue that much of the easy money has already been made, but the company has continued to produce robust subscriber growth, generating a compound annual growth rate (CAGR) of nearly 25% over the past three years, while its operating margin has grown from about 4% in 2016 to 10% for 2018. Netflix expects this growth to continue for many years to come.

Rachel Brosnahan in The Marvelous Mrs. Maisel

Rachel Brosnahan in a scene from "The Marvelous Mrs. Maisel." Image source: Amazon Studios.

Streaming and so much more

If Netflix is a pure play, (AMZN 0.10%) is just the opposite. No one knows for sure how many people actually watch Amazon Prime Video, as it's offered as one of the benefits of Prime membership, as well as a stand-alone service. Early last year, Amazon CEO Jeff Bezos revealed that the company had more than 100 million Prime members, but not all of those avail themselves of Prime Video.

From an investment standpoint, however, Amazon offers a diverse group of quickly growing businesses that go far beyond its e-commerce roots. The company's leading cloud-computing operation (Amazon Web Services), its sprawling logistics operation, its growing physical retail footprint, and a vast array of AI-powered electronic devices give investors many ways to benefit in the coming years. Amazon produced revenue that grew 31% in 2018, to nearly $233 billion -- a massive increase for a company Amazon's size -- while net income more than tripled to $10 billion.

A number of viewing options available on The Roku Channel.

Image source: Roku.

A Netflix offshoot

Investors may not remember that the first Roku (ROKU 1.39%) streaming video player was actually developed by Netflix itself, before Netflix decided to remain hardware-agnostic and spin off the team and its technology in early 2008. The leader of the project, Anthony Wood, became Roku's CEO.

In the ensuing years, Roku has come into its own. While streaming devices remain part of the company's DNA, Roku changed the primary focus to its platform, which seems like a no-brainer in hindsight. Revenue topped $742 million in 2018, up 45% year over year, while platform revenue soared 85% compared with 2017 and now accounts for more than 56% of the company's revenue. Last year it added The Roku Channel and the ability to subscribe to premium video offerings from the likes of Showtime, Epix, and Starz, among others. Roku is still in the earliest stages of its international expansion, which should drive growth for years to come.

The Disney+ logo.

Image source: Disney.

The happiest stream on Earth?

Disney (DIS 0.94%) put the streaming world on notice in 2017, announcing its intention to buy Twenty-First Century Fox and develop two homegrown over-the-top services. The massive merger is nearing the finish line, and Disney has already introduced the first of its two streaming services, ESPN+, which has quickly signed up more than 1 million subscribers. The House of Mouse plans to introduce its next offering -- Disney+ -- before the end of the year. The company plans to provide greater details regarding the upcoming service during an investor day presentation on April 11.

This doesn't even include Hulu, widely regarded as one of the top streaming services. Disney will own a 60% controlling interest in the company when the Fox merger is complete. Hulu added 8 million new subscribers in 2018, growth of 48% year over year, to 25 million. Ad sales also grew 45% last year, topping $1.5 billion. Hulu's still losing money as it continues to focus on growth, but that won't be the case forever. 

Check out the latest earnings call transcripts for Disney, Netflix, Amazon, Roku, and The Trade Desk.

Two hands touching digital globe showing various consumer advertising touchpoints.

Image source: Getty Images.

A play on advertising

Investors may not have considered The Trade Desk (TTD 1.09%) as a streaming play, but there are reasons they should. The programmatic advertiser uses artificial intelligence and high-speed computers to automate the process of digital ad buying in real time. The company can place more than 9 million ads per second with its next-generation platform across a host of key channels -- included connected devices and TVs. In fact, ads for connected TVs has been The Trade Desk's fastest-growing channel. In the most recent quarter, it said growth in the segment was 525%.

Growth accelerated for the company last year, with revenue of $160.5 million, up 55% year over year, on top of 52% gains in 2017. Profitability is also soaring, as net income of $39.4 million jumped 134% compared with the prior-year quarter. This illustrates that consumers continue to choose ad-supported streaming options, and The Trade Desk stands to benefit significantly from the trend.