In what has been a rollercoaster ride of a year, filled with a global health crisis and economic and social turmoil, few companies have benefited as much as Netflix (NASDAQ:NFLX). The streaming media giant's stock is up 65% in 2020, and the company is currently worth $236 billion, with nearly 200 million subscribers.

It seems as though the streaming wars are always garnering attention, which is not surprising, given the growing number of services consumers can choose from and the implications for investors. Traditional media and entertainment behemoths are putting up a fight as they begin focusing intensely on streaming. Netflix is still the leader, but it now has to worry about peers vying for a piece of the growing pie.

Netflix investors need to consider if the recent slowdown in subscriber growth in its latest quarter is temporary or a more permanent shift, particularly with the reopening of the economy on the horizon and as competition in the space continues heating up.

Person's right hand holding remote while facing a checkerboard of streaming services on TV.

Image source: Getty Images.

The light at the end of the tunnel 

With the first coronavirus vaccine authorized for emergency use by the U.S. Food and Drug Administration (FDA) on Dec. 11, Americans have found hope that the country and the world will soon be moving past this deadly pandemic. While it's still unknown when a sizable portion of the population will be immunized and the economy will fully open, investors in so-called stay-at-home stocks are worried that the boost their holdings received this year are set to end.

If people are able to travel, eat indoors at restaurants, and go back to movie theaters, that means they'll be spending less time at home. While this is likely to happen, it's important to remember that even before the pandemic, Netflix was growing rapidly. Revenue almost tripled from 2015 through 2019, and subscribers went from 70.8 million to 167.1 million in the same time.

Netflix still provides an incredible value to its customers, and even though less time in 2021 may be spent in front of a screen, most subscribers will choose to retain their membership rather than cancel it. The recurring revenue machine that is Netflix's business model will keep running.

The battle for eyeballs is heating up

The streaming wars are something investors should monitor closely next year. Newer entrants, such as Walt Disney's Disney+, with 86 million subscribers, and AT&T's HBO Max, with 12 million subscribers, are increasingly bolstering their offerings in order to woo customers.

Disney's stock is up 38% in the two months since the company announced that it is reorganizing its media and entertainment business to focus on a direct-to-consumer model. Investors welcomed this shift in strategy because it positions the House of Mouse to take Netflix head-on by capitalizing on its rich, legacy intellectual property from Pixar, Lucasfilm (maker of Star Wars), and the Marvel film studios. 

At the same time, executives at Warner Bros. (owned by AT&T) shook things up even more by revealing that it plans to release its entire 2021 film slate on HBO Max and in theaters simultaneously. Besides the obvious result of setting a bearish tone for movie theater chains, this demonstrates the drastic measures streaming companies will take to grow membership numbers in an ever-increasing push to be in consumers' living rooms. 

What does this mean for Netflix? 

Netflix recognized early on that the internet was going to fundamentally change how people consumed video entertainment. As a result, it is far ahead of these newer players vying for market share. That doesn't mean the business can rest on its laurels. Instead, it should continue spending massive amounts on content to hold its lead, keep existing customers happy, and continue bringing in new ones. 

Investors who made money owning Netflix over the years shouldn't sell now just because the space is getting crowded and the economy is on its way to opening back up. When the dust settles, there will probably only be a handful of streaming winners. You can bet that Netflix will be one of them.

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.