The story of subscription video-on-demand (SVOD) stocks in 2022 has been one of slow growth. Both Walt Disney’s (DIS -1.86%) and Warner Bros. Discovery (WBD -4.33%) experienced strong growth during the worst days of the COVID-19 pandemic, but as the world has opened up again, they have seen their share prices slip. Now, with inflation stubbornly high and concerns about a possible recession in 2023, some investors may be wondering which streaming stocks make sense.

Let’s explore whether Walt Disney or Warner Bros. Discovery is the better option right now.

Going big vs. scaling back

Walt Disney is investing approximately $32 billion on content this year, much of which will be for shows, movies, and sporting events for Disney+, Hulu, and ESPN+.

The strategy of spending big on streaming services is working out well for Walt Disney: in its fiscal 2022 third-quarter earnings the company revealed it had just over 221 million global subscribers across its SVOD platforms, putting it above Netflix’s (NFLX 0.20%) 220 million. (Netflix has since hit 223 million customers.) Analysts broadly expect Walt Disney will continue to see strong growth in the streaming space over the coming years, with some predicting Disney+ alone will surpass 270 million subscribers by 2025.

Warner Bros. Discovery has taken a different approach to programming this year. Under CEO David Zaslav, the company has shut down multiple European productions, cut several films that were nearing release, and stripped several movies from HBO Max. “[It’s] not about how much,” explained Zaslav when asked about Warner Bros. Discovery’s approach. “It’s about how good.”

Zaslav’s quality over quantity approach is not without its costs: Warner Bros. Discovery recently filed a notice with the SEC projecting a pre-tax write-down of $2 billion to $2.5 billion for “[s]trategic content programming assessments.”

DC is taking on Marvel -- again

Both Walt Disney and Warner Bros. Discovery are in the superhero business. However, where Walt Disney has routinely delighted fans with its dozens of Marvel Cinematic (MCU) movies and TV shows, Warner Bros. Discovery has had a much more patchwork run with its DC projects, which have historically been split into enclaves such as The Dark Knight Trilogy, the DC Extended Universe (DCEU), Arrowverse, and DC Dark.

For Walt Disney, the MCU strategy -- headed by Marvel Studios president Kevin Feige -- has led to dozens of movies that have generated more than $27 billion at the global box office since 2008, making it the most successful franchise of all time. Walt Disney has also capitalized on the success of the MCU with a slew of tie-in TV shows, which are credited with driving Disney+ sign-ups.

Warner Bros. Discovery’s DC output includes four movies that have made more than $1 billion theatrically, yet only one -- 2018’s Aquaman -- forms part of the interconnected DCEU. And while the company has produced many DC TV shows over the years, to date, HBO Max’s Peacemaker is the solitary show that directly links to the DCEU. (The Arrowverse has had some crossover, but it’s mostly separate.)

To provide a more cohesive approach to its DC projects, Warner Bros. Discovery recently named producer Peter Safran and director James Gunn as co-CEOs of DC Studios. Safran has overseen production on many DC superhero projects, while Gunn directed the 2021 DC anti-hero movie The Suicide Squad.

Speaking about the appointments, Zaslav praised Safran and Gunn for their “proven track record thrilling superhero fans around the globe,” claiming the pair are “uniquely qualified to develop a long-term strategy across film, TV, and animation.”

The better bet?

The way Walt Disney approaches its programming demonstrates how confident it is in its long-term storytelling. Over a decade-and-a-half, the company has built up a global base of fans who will see its movies in theaters, and also subscribe to Disney+ so they can keep up with the continuing adventures of the MCU. And while it’s a strategy that requires significant investment, Walt Disney’s experience in delivering connected big-budget experiences continues to be rewarded quarter after quarter.

While Warner Bros. Discovery has had some faltering attempts at building its own connected universe in the past, the formation of DC Studios should put the company on the right path. However, Warner Bros. Discovery is still going through an expensive restructuring process, so investors may question how well the endeavor will be supported. After all, under the DC project Batgirl was axed on Zaslav’s watch.

Ultimately, Walt Disney’s is the better bet right now. The company’s content strategies are well-tested and show little sign of faltering. Warner Bros. Discovery on the other hand is still reshaping its operations, making for more uncertain growth. While the company certainly has much going for it, it’s yet to show that it can execute as well as Walt Disney.