Screen time has expanded dramatically over the last decade due to the widespread use of mobile devices and the rise of digital media institutions; the coronavirus epidemic only served to hasten this trend. With the proliferation of Internet-connected televisions and mobile phones, Americans spend more than 13 hours daily engaging with media.
Firms well-established in digital media continue to broaden their customer involvement, while those dependent on traditional media channels face increasing difficulties. M&A activity has been high for many years running because of this.
Some publicly listed media enterprises should be given more attention over other emerging media platforms, concepts, and businesses.
We recommend these six stocks:
ViacomCBS
The fact that ViacomCBS is one of only four U.S. broadcast networks is to its advantage. Market dominance like that guarantees widespread exposure to many people. Nickelodeon, BET, MTV, Comedy Central, and Showtime are just a few of its cable networks that appeal to a wide variety of viewers.
In 2021, the business renamed its direct-to-consumer initiatives. Most of the material from Paramount, Viacom, and CBS has been merged into one streaming service called Paramount+. Sky, controlled by Comcast (NASDAQ: CMCSA), will distribute Paramount+ in certain territories and a SkyShowtime service in the rest of Europe on behalf of ViacomCBS. The collaboration ought to raise product visibility and lower distribution expenses.
Although switching to a DTC model may cut into its content license income, the long-term potential of increasing its DTC business is far more significant.
Fox Corp. (NASDAQ: FOXA)
The stock price of Fox Corporation (NASDAQ: FOXA) rose at the market close on August 10, 2022, although the company did not meet analysts’ profit or sales projections for its fiscal fourth quarter. Nevertheless, the media conglomerate increased its adjusted earnings per share to 74 cents from 65 cents a year earlier.
Fox Corporation (NASDAQ: FOXA) also reported $3.03 billion in sales, up 5% year-over-year. Earnings per share were at 74 cents, while sales came in at $3.05 billion, both of which were below what was expected.
In addition to overall sales figures, Fox Corporation (NASDAQ: FOXA) reported sales figures for each of its business divisions. Advertising income increased by 7 percent to $1.06 billion, affiliate revenue increased by 2 percent to $1.73 billion, and other revenues increased by 4 percent to $252 million.
Discovery
When it comes to television content, Discovery is a significant player in the industry. With the 2018 purchase of TV channel operator Scripps, it achieved massive scale and became the go-to place for unscripted shows. With the addition of AT&T (NYSE: T) WarnerMedia, the company will gain even more reach and scale with cable TV networks, a film studio, and other well-known properties. The acquisition will also increase Discovery’s ability to generate a wider variety of programming.
The corporation owns many well-known networks and brands, such as the Food Network, the Home and Garden Television Network, and its eponymous channel. It also has an enticing portfolio of sports broadcast rights, making it even more successful in other countries.
Discovery’s foreign DTC initiatives are light years ahead compared to its domestic DTC operations. To better compete in the digital streaming arena, the firm recently merged all of its streaming activities under the Discovery+ brand. In addition, with WarnerMedia on board, the company may provide HBO Go and CNN’s new OTT service, CNN+.
NextDoor Holdings, Inc. (NYSE: KIND)
During the second quarter, Nextdoor Holdings, Inc. (NYSE: KIND) reported a loss that was larger than anticipated, and the company also reduced its sales forecast for the whole year. Because of this, on August 10, 2022, Wednesday, its stock dropped approximately 25% in value.
Losses of 10 cents per share were disclosed by the provider of a hyperlocal social networking service for communities, which was much higher than the average loss forecast of 5 cents per share by market experts. Nextdoor Holdings, Inc. (NYSE: KIND) also reported quarterly sales of $54.54 million, up 19% year-over-year but falling short of analysts’ $55.22 million estimate.
Nextdoor Holdings, Inc. (NYSE: KIND) has lowered its full-year sales forecast from $252 million to $256 million to $220 million to $225 million.
Walt Disney
After purchasing much of 21st Century Fox, Walt Disney has become one of the largest media businesses in the world. Star Wars, Marvel, Pixar, and the other legendary Disney properties are only some of the numerous strongholds in its intellectual property portfolio. It also controls the Disney and ESPN television networks. In addition, the second group has exclusive rights to air prestigious athletic events, such as Monday Night Football, for extended periods.
Since taking over the day-to-day operations of Hulu and releasing Disney+, Disney’s foray into direct-to-consumer streaming has been successful. Walt Disney’s purchase of BAMTech, a streaming technology company, is good for business for both companies.
In addition to producing licensed merchandise, the corporation also operates a chain of successful amusement parks. Disney’s film studio, television networks, and direct-to-consumer businesses often generate lower operating profits than those divisions above.
If you’re considering buying Disney stock for your media and entertainment companies portfolio, that’s something to keep in mind. While other media conglomerates did well during the coronavirus outbreak, Disney was hampered by its parks business. It weighed on operating profitability and cash flow; thus, leadership temporarily halted the payout. Although the company’s diversified business model may appeal to certain shareholders, it does not qualify as a “pure-play” media stock.
Netflix
Netflix provides more direct-to-consumer video streaming than any other company. It started investing in original content in 2013 and has since seen a rise in revenue due to its increasing catalog of shows and movies using unique material. In addition, Netflix’s large size allows it to collect and analyze vast amounts of data, which it then utilizes to guide its content production and licensing choices and enhance its users’ overall Netflix experience.
Netflix is now self-funds its content acquisitions after years of growing its debt cash flow. The firm can keep increasing its content selection thanks to the subscription service’s rising source of recurring income. In addition, the business is expanding into the video gaming industry.
Read More: 6 Best Media Stocks To Buy Before 2023