Online comedy has evolved lightyears since the early dot-com days. No longer confined to clubs and talk shows, humor now thrives on our phones, meeting us wherever we are, whenever a laugh is needed. For investors, this modern landscape brims with potential as digital platforms provide opportunities to buy into rising stars early. Its growing influence today feels undeniable, shaping culture, swaying trends, and driving profits. 

This article explores online comedy’s most pivotal evolutionary turns and shares insights for investors to capitalize on the next wave of tech innovations.

The history and growth of online comedy platforms

Let’s turn back the clock to the .com bubble era. For those of us who grew up with the early internet, comedy was confined to TV screens and movie theaters before sites like The Onion and CollegeHumor (now Dropout.tv) emerged. These sites, and many others, opened up the comedic potential of the web, sparking a digital humor revolution.

When social media entered the scene, comedy found yet another breakthrough platform. Comedians harnessed the instant reach of Twitter, TikTok, and YouTube (GOOG), attracting millions of followers overnight. Suddenly, fan bases didn’t require live touring to score a coveted Netflix (NFLX) special – the power, in many ways, is now in the comedian’s own hands.

Online platforms redefined virality almost daily, and today, funny video makers wield immense influence – collaborating with major brands, launching merchandise lines, and landing TV deals.

The Metaverse and online comedy

As online comedy continues evolving, the metaverse has emerged as an unexpected new frontier. Comedians have begun creating their own virtual comedy clubs to connect with audiences seeking unique experiences. Platforms like Unknown Theater craft interactive spaces where real-world standups can perform sets while audiences around the globe tune in through VR headsets. It’s an uncharted territory where the normal rules of comedy venues no longer apply.

As reported by The Verge, some comics like Simon Josh Abramovitch now perform their own shows in the metaverse, drawn in by higher profit margins and creative freedom. They tailor content specifically for these new virtual worlds. Their abilities to build loyal in-world followings hint at the power and influence metaverse comedy could someday wield. While still relatively early days, platforms supporting virtual comedy are attracting talent and audiences at staggering rates, and as technology advances, the metaverse could reshape comedy consumption and even propel new stars. 

For forward-thinking investors, Meta (META) warrants attention. Despite being recently targeted for their ad-free service, Meta, Facebook and Instagram drive Meta’s 2.9+ billion monthly active users – allowing emerging comedy talent mass audience-building potential. 

Investing in laughs 

As streaming platforms and social media transform comedy distribution, the profits flow, paving the way for investors. Netflix (NFLX) now allocates around 12% of its vast offerings to comedy series and specials, and with stock currently at $478.31, its aggressive expansion in the comedy arena is paying dividends. With 49% of households considering Netflix to be their most important streaming subscription, though a dip from 53% compared to last year, Netflix is still seeing steady growth in its subscriber base and is outperforming the streaming market.

NBCUniversal scooped up legacy comedy brands and is now raking in millions. The number of paid subscribers reached 13 million, with 28 million monthly active accounts in the U.S., marking an increase from 24.5 million at the close of 2021.

The recent Warner Bros. Discovery (WBD) merger has created a $10+ billion entertainment titan. Blending HBO Max’s comedy catalog, including classics like Friends, with Discovery’s unscripted shows gives them a formidable scale. Integrating HBO Max and Discovery+ next year could unlock additional growth even as stock prices temporarily lag. The company recently announced the discontinuation of specific benefits, such as 4K, for its existing ad-free subscribers. This decision is part of the company’s strategy to eliminate premium perks, and instead provide ad-supported services at a more affordable rate to improve its customer base. 

The Zacks Consensus Estimate projects that WBD’s total Direct-to-Consumer subscribers for 2023 will be 96,462, reflecting a 0.37% year-over-year increase. Additionally, the Zacks Consensus Estimate for revenues is forecasted to be $41.4 billion, signaling a substantial year-over-year growth of 22.42%.

But aside from the big players, the next generation of online comedy disruptors – scrappy startups like Dropout.tv and Funny or Die – are emerging in the space. While not yet publicly traded, ByteDance’s TikTok also carries industry disruption potential through its billion-plus, mostly Gen Z users. As comedy consumption patterns shift, TikTok sits poised to capitalize.

For opportunistic investors, monitoring engagement across both established comedy outlets and emerging challengers signals where untapped growth potential resides. For investors willing to dive in, returns can be huge. In online comedy these days, the next big score might come from the most unlikely place.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: META Feed: Investing in Digital Laughter: The Future of Online Comedy Platforms