The Real Winner of the Streaming Wars

2019 is poised to be a major year for streaming video in the United States. Disney and AT&T's WarnerMedia are set to release their own direct-to-consumer streaming products by the end of the year. Comcast's NBCUniversal will follow shortly after with its own service in early 2020. Meanwhile, smaller media companies are improving their streaming services, investing more in original content exclusively for streaming customers or beefing up TV Everywhere apps for a direct-to-consumer offering.

Media companies aren't the only ones trying to capitalize on streaming video. Amazon (NASDAQ:AMZN) is inching closer to acquiring a stake in YES Network -- the Yankees regional sports network -- and it has sights on more sports rights. Apple and Facebook are spending hundreds of millions on content and building out video platforms.

In the meantime, virtual pay-TV providers are becoming increasingly popular as a way to watch linear television. Oh, and don't forget Netflix is still fighting with everyone to grow its subscriber base past 60 million in the U.S.

With all this competition, it's hard for investors to pick a winner. But there's one company that stands out from the crowd.

Image source: Getty Images.

Selling shovels

Finding the winner in the so-called streaming wars isn't about picking the best streaming products. It's about choosing the business that can facilitate the best streaming products. You want to buy the shovel maker, not the gold diggers.

In that regard, Roku (NASDAQ:ROKU) is one of the best shovel makers.

It already has over 27 million active accounts and that number is growing quickly (up 40% last year). Unlike Amazon's Fire TV platform, Roku is relatively agnostic when it comes to supporting streaming services. That makes it the best way to facilitate delivering streaming video to consumers for most companies entering the market.

Roku benefits from increased use of its platform where it can collect commissions on subscription sales and shares of advertising revenue for streaming services. It recently made a move to push content first instead of focusing exclusively on streaming brands, which could open up an opportunity to sell more subscriptions while gathering more detailed user data for ad targeting. As more and more content gets siphoned off into different streaming services, Roku's ability to aggregate content becomes even more valuable.

Roku isn't the only company competing in the streaming device space. The company lists Amazon, Apple, and Alphabet's Google as some of its biggest competitors. That said, media companies are more likely to view those larger tech companies pouring millions of dollars into streaming video as competitors. Roku operates a small ad-supported video service -- The Roku Channel -- which doesn't represent as much of a threat to the premium video services major media companies are creating. That should make Roku a preferred platform for most services.

Ushering in more cord-cutting

Even if Roku doesn't benefit from the various streaming services that will launch over the next year -- i.e., get a share of subscription revenue -- it ought to make money from the push toward streaming in general.

As more consumers cut the cord, Roku devices present the best way for them to watch streaming content on their TV. While Roku doesn't make a profit on its device sales, it does an excellent job of monetizing its users by suggesting other apps to supplement their main streaming services. The company generated $17.95 per user last year.

As services like Disney+, WarnerMedia's three-tiered service, and NBCUniversal's subscription option enter the market, it should give consumers more reasons to cut the cord. And Roku is set to benefit both directly and indirectly from that impact.