This should be a spotlight moment for the entertainment industry. Movie theaters, concert halls, and Broadway stages may be silent in this era of social distancing, but you're probably consuming more movies, music, and shows than ever right now in the shelter-in-place phase of this pandemic.

A couple of years -- and perhaps even a few months -- ago, a list of the most promising entertainment stocks would have included media moguls, amusement park operators, and perhaps even a concert promoter or a multiplex operator. The new normal dictates that investors shift to a new way of thinking in sizing up the entertainment winners of the future. Roku (NASDAQ:ROKU), Sonos (NASDAQ:SONO), and (NASDAQ:AMZN) are some of the top stocks in this market where entertainment is now almost exclusively consumed without leaving the house.   

A woman watching something exciting on a large screen PC monitor. She's wearing a headset and glowing bracelets.

Image source: Getty Images.


We're streaming more TV than ever, and that leads many consumers and investors to Roku's welcome mat. Roku is fueling a growing number of video entertainment sessions through its time-tested hardware and its pole position as the operating system of choice for a lot of smart TV manufacturers. Roku officially reports quarterly results on Thursday afternoon, but it already offered up an impressive financial update last month.

Roku has grown its audience by 37% over the past year, closing out the month of March with 39.8 million active accounts. Average revenue per user is growing even faster as engagement and ad opportunities continue to improve. The average user is spending 3.64 hours a day on Roku, and that's obviously a good thing.  

Quarter Active users Hours Streamed Days in Quarter Daily Hours, Average Per User
Q1 2019 29.1 million 8.9 billion 90 3.4
Q2 2019 30.5 million 9.4 billion 91 3.39
Q3 2019 32.3 million 10.3 billion 92 3.47
Q4 2019 36.9 million 11.7 billion 92 3.45
Q1 2020 39.8 million  13.2 billion 91 3.64

Data source: Roku quarterly reports.

Roku's update calls for 49% to 53% in top-line growth come Thursday's report. There is no indication that we're streaming less during the COVID-19 crisis, so the current quarter should also be another period of sticky engagement for Roku. 


It's not just video that we're streaming. We're also escaping through music, and that's where Sonos comes in with high-tech wireless home audio systems that audiophiles are flocking to these days. Sonos may be competing against tech giants with cutthroat prices, but Sonos keeps finding ways to -- dare I say -- pump up the volume. 

Revenue and net income rose 13% and 15%, respectively, in Sonos' last reported quarter, extending its streak of positive annual growth to 14 years. It's rich in patents and pedigree, and even as it's locked in combat with wealthier companies it's more likely to be acquired by a tech giant than dominated on a level playing field. Recessionary concerns may limit the budgets to spring for Sonos' high-end hardware, but when it comes time to treat your ears to something nice, it will be hard to top this 2018 IPO that has now opportunistically fallen below the $10 mark. 


Going from single to quadruple digits, let's wrap this up with the e-commerce behemoth that happens to be the country's third most valuable company by market cap. Amazon is many things these days, and it's undeniably the champ of home entertainment. It sells the merch -- including Roku streaming sticks and Sonos smart speakers, receivers, and sound bars -- to get your digs up to speed. It's also a treasure trove of digital entertainment.

If you're one of the more than 150 million Amazon Prime members, you already have access to a growing catalog of digital content at no additional cost. You can stream shows and movies through Prime Video. There are more than 2 million songs available commercial-free through Amazon Music Prime. Twitch Prime is also there with digital diversions for video game players. You get a lot with an Amazon Prime subscription, but it's also a gateway drug to the e-tailing giant's premium offerings. You can pay to buy or rent new movies and TV shows that aren't on Prime Video, expand your music library to 60 million tracks through Amazon Music Unlimited, and naturally pay up for just about any video game in Amazon's digital vault. If you're old school you can have Amazon ship you any DVD, CD, or video game, too. 

Beyond the digital goodies there's a fair chance that you've seen an uptick in your Amazon shopping activity. It's the safest way to shop these days, and Amazon is one of the few retail stocks with prospects improving during the shelter-in-place phase of this pandemic. We've never been this hungry for entertainment, and Roku, Sonos, and Amazon are keeping us well fed in these challenging times.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.