This article / post contains references to the products or services of one or more of our advertisers or partners. We may receive a refund when you click on links to these products or services
The American media industry is valuable $ 717 billion, which accounts for almost a third of global industry. It includes everything from movies to commercials, streaming, broadcasting, radio, video games, publishing and music.
As we continue to enjoy more information on our phones, the demand for media is likely to increase. Learning to invest in the media sector is just one way to reap the benefits of this huge industry.
- Media stocks include everything from news to movies, music and video games.
- The U.S. media sector is worth about $ 717 billion.
- Six companies control about 90% of the American media.
- There are many investment opportunities for investors interested in the media sector.
What are media shares?
In 1964, this was written by the Canadian philosopher Marshall McLuhan the medium is the message, in its fundamental work Understanding the media: human expansions. Media is the plural of media and refers to the way news, entertainment and communication are spread. The media, he argued, is changing human thought and the way we perceive the world.
Nearly 60 years later, the Internet is dominating the media in ways that McLuhan could not have foreseen. Almost every media share has some online component, even if the companies themselves are not shares of online media.
Media stocks span the range, with about 90% of U.S. media coming from one of six companies: Comcast, The Walt Disney Company, News Corporation, Time Warner, Viacom, and CBS. Media stocks include:
Advertising: The advertising sector consists of public relations and marketing companies that connect producers with consumers. If you’ve seen an ad on Facebook or read an ad in a magazine, chances are it’s from an advertising company.
Book publishing: One of the more traditional media sectors is book publishing continues to be a strong industry. Much of this is due to the rise of e-publishing, but it also includes educational and professional publishing.
Movie party: The film and television industry has changed the popularity of streaming. Big players like Disney have created their services to compete with popular streaming services like Netflix.
news: From the show to the newspapers, the news was once one of the biggest media players. Today, the news is largely concentrated in the hands of several large companies, and many turn to the web as the press becomes too expensive.
music: Globally recorded music revenue amounted to $ 23.1 billion in 2020. Music includes everything from streaming to physical music sales and synchronization licensing. Sync licensing includes any service that includes music, whether it’s an ad, TV show, restaurant, live entertainment, or radio.
Video games: Although video games are often considered their own sector, they are part of the media industry. tole The industry is worth $ 65.5 billion has many big players, including Activision Blizzard, Electronic Arts, and even Microsoft.
How to invest in the media sector
Undoubtedly, you have first-hand experience with media companies. How many streaming services are you currently subscribed to? Are there services that you have stopped using and others that you cannot imagine without? Maybe there’s a certain game developer that you really like. Identifying the media companies you use is a basic way to start identifying potential media investment opportunities.
Large media companies are generally better than smaller ones. Size is related to the ability to negotiate the best deals with marketers. Large media operate alongside a wide range of brands, which means that companies can use one product or service to promote others. This diversification is another important aspect. The more diverse a company’s formats are, the less likely it is that weakness in one area will affect its outcome.
If you want to invest in the media sector, it is best to look for media companies that use the latest digital technology. After all, media companies are kind of technology company and innovation is critical.
When it comes to streaming shares, content is king. The demand for content is insatiable, so companies that offer good content should continue to thrive. Other things to consider are the size of the company and of course financial statements the company itself.
The best media companies and streaming services you can invest in
There are many companies in the media sector in which you can invest. To diversify your portfolio by investing in a media company, take a look at some of the companies below. Remember that this list is not exhaustive, nor do we recommend buying any of these companies. Only you know if these companies make sense for your portfolio.
1. Amazon (AMZN)
Amazon started selling books online before it started selling almost everything. Today, Amazon Prime has more than 200 million subscribers, giving them access to Prime Video and fast delivery. The company does not disclose how many subscribers regularly watch Prime Video, although its choice of streaming is more difficult in terms of quantity than quality. The company also boasts its own television and film studio, Amazon Studios, and has received numerous awards for its shows.
In addition to streaming services, Amazon Media Group offers advanced advertising on and off Amazon’s website and focuses on large Amazon resellers. Books are still an important part of the scene, as popular book-based movies and TV series boost Amazon sales.
2. AMC Entertainment Holdings Inc. (AMC)
The largest cinemas in the world have managed to survive the pandemic and now the audience is returning to the cinema. In August, AMC CEO Adam Aron he said U.S. ticket revenue was well on track to reach 45% of revenue in the third quarter of 2019 before Covid-19 stopped watching movies. AMC also has an agreement with Warner Brothers for a 45-day exclusive screening of all its films in cinemas before the home screening, starting in 2022. Also in 2022, movie viewers can pay for tickets and concessions via Bitcoin.
3. Comcast Corporation (CMCSA)
Comcast is one of the best players in the entertainment industry. It is the parent company of NBC, NBCUniversal, Xfinity, Sky – one of the leading European entertainment companies – DreamWorks Animation, Universal Pictures, Telemundo and many other well-known brands. Due to the diversification of revenue streams, the decline in one area does not necessarily affect Comcast’s overall financial situation.
Comcast also has a strong presence in wireless services, video, high-speed Internet and related industries in the US and Europe. Due to the diversity of income, it is a popular investment choice, as it usually works well in good and bad times.
4. Discovery Communications Inc. (DISCA)
Discovery and WarnerMedia plan to merge, which will create the second largest media company in the world – only Disney will surpass it in terms of revenue. Currently Discovery’s brand portfolio includes top names like Discovery Channel, Eurosport, Food Network, HGTV, Animal Planet, TLC and Oprah Winfrey Network. The WarnerMedia merger adds cable power plants such as HBO, Turner Entertainment Networks, CNN Worldwide, The Cartoon Network and many others. There are also Warner Brothers film and television studios and dozens of their affiliates.
Outside the U.S., Discovery International covers major satellite and cable markets in Africa, Asia, Europe, Latin America, and the Middle East.
5. Netflix (NFLX)
When it comes to streaming investment stock, Netflix has proven to be the winner. Although its financial performance has declined since the first days of the pandemic, it is more than 207 million subscribers worldwide from mid-2021. Netflix shares have risen 450% in the past five years.
In July 2021, Netflix announced it would add video games into its repertoire that transcends film and television. Netflix plans to offer video games on its platform at no extra charge for subscribers within a year. Mike Verdu – who previously worked with developers at Facebook to introduce virtual reality games to Oculus VR headsets – has been hired as vice president of game development. He is also a former senior vice president at Electronic Arts, where he oversaw major mobile game studios.
None of Netflix’s streaming rivals currently offer games, and Netflix is also planning to move to podcasts. The company seems ready to continue its strong business. He still remains a leader in content as he produces Emmy-winning and Oscar-winning material, and his new ventures should boost his revenue.
6. Year (ROKU)
Roku offers flow devices where customers pay only for subscriptions to channels or TV shows or movie rentals. With the Roku channel, consumers can manage all their streaming packages in one place.
Rok’s devices are relatively inexpensive and represent a small percentage of the company’s profits. Roku earns most of its money with its segment of platforms, which includes advertising, content distribution, licensing deals with other platforms, and premium subscriptions. If you use the Roku device for streaming, you may have noticed the branded buttons on the remote control. Click on Netflix, Disney, Hulu or another offer and Rok earns some money.
Supply chain problems are affecting the hardware side, but this should be addressed once the global chip shortage is addressed. The shortage has affected stock prices, but Roku should continue its strong growth as consumers cut the strings and turn to this leader in the field.
7. Walt Disney (DIS)
Everyone knows Miško, and Disney is synonymous with family fun. With its extensive film library and the success of the Disney + streaming service, Disney is a good choice for those investing in television streaming. While the pandemic has severely affected Disney shares as its theme parks have closed, cruises ceased and cinemas closed, the company is back in business.
Disney +, which was introduced in November 2020, exceeded its expectations in terms of login and reached 10 million subscribers in the first 24 hours. Now he has more than 103.6 million subscribers and the service is expected to reach its target of 230-260 million subscribers by the end of 2024. This is a big difference from the original subscribers ’forecasts in 2019, when the company expected to have 90 million subscriptions by 2024. Now the second only on Netflix in paid subscriptions.
Disney + offers popular streaming packages with ESPN Plus and Hulu, among other top offerings. Pixar, Marvel and Star Wars are other components of Disney.
This is definitely a buy and keep stock, with brand recognition and an abundance of franchise opportunities.
Do your research before investing in the media sector
Before you invest in the media sector, make sure conduct a survey of potential stocks. Exploring media stocks is generally more fun than in other sectors. The business fundamentals always apply, but this is a good sector for those who have a nose for pop culture, as media companies are the source from which pop culture originates. If you have the ability to determine the next “and” thing in the realm of entertainment, media stock research could come naturally.