Stocks Set To Rise Across The Entertainment Industry Due To Post COVID Rebound

Through a steady return of advertising revenues and production resuming across numerous territories, the entertainment industry is on a surge, somewhat bouncing back from the impact of the pandemic.

Many entities were able to springboard off the change in lifestyle to its consumers that the pandemic brought to the table. More people were restricted in movement across the world due to government lockdowns, so viewing figures wholly went up across the board but advertising revenues went down.

Over-The-Top (OTT) platforms benefitted from this more with their general non-reliance on advertisers. Production was also hit with mass shutdowns and delays. IP holders’ revenue grew as a result as cable and streaming companies relied on buying content rather than making their own in a period of uncertainty.

Most of the power in the entertainment industry has been largely consolidated into a few key players. Walt DisneyDIS
, Discovery, and ViacomCBS are the key players.

Discovery’s purchase of Scripps in 2018 helped it become an unscripted powerhouse, coupled with its acquisition of AT&T’sT
WarnerMedia, its broadcasting rights to the Olympics, and its growing direct-to-consumer stable under the Discovery+ banner which will now also include HBO Max and CNN+, Discovery is primed to have a strong future as it stands.

NetflixNFLX
, the largest streaming service in the world, has been garnering mass amounts of data through its original series and films which it has utilized internally to make informed content decisions. It now has the ability, after using debt as a means of cash flow for years, to self fund its content through its growing pot of funds from its subscriber growth. It is now also expanding into video game development to help create stronger branding around its franchises and to create new ones. All of this whilst planning to introduce an ad-supported version of the platform with MicrosoftMSFT
.

Walt Disney’s diversification as both a tangible entity with theme parks, toys and games coupled with its digital presence and IP ownership of Marvel, Star Wars, and Pixar has given it the viability to be extremely versatile across its business.

Hulu and Disney+ also give it leeway to compete with Netflix and other streaming services long-term.

ViacomCBS has enviable cable channels across its roster with Showtime, Comedy Central, MTV, BET, and Nickelodeon to bring in diverse audiences. It has now also conglomerated its streaming capabilities under the Paramount+ banner.

Some big players are certainly making waves across entertainment but there are smaller entities also to watch out for.

Key insight

Sam Logan, who was a shareholder of Scripps when the company sold to Discovery and still is today, envisions a mixed future for the entertainment industry.

“I think there are many elements to consider in regards to the industry as a whole. We’re living in an era where things change so quickly. COVID taught us a lot in regards to how we can be heavily affected by things way out of our control.” He said.

Logan added, “The major entities in entertainment right now – as you can see – want to be able to largely compete and consolidate their strength across numerous areas. The phrase ‘content is king’ has never been more apropos, as when Netflix rose we quickly saw Disney, HBO, Discovery and others mould their IP into their services, in a few instances at the expense of Netflix.”

As well as being a shareholder in Scripps, Logan is a primary investor in Kuma Cannabis, Concierge Automotive, and is working on several new ventures including a Faux Fur company and Tea at Barnes and Logan which is currently on YouTube.

He continued: “I think it’s important to spot key trends in this current marketplace. Things are moving very quickly and innovation comes at the drop of a hat, so you have to have an element of foresight to be able to capitalize.”

“Through its unscripted movements and the merger which has brought HBO Max under its banner as a service, you can see that Discovery is primed to compete with anyone out there. Disney has always had so much strong IP to work from and Netflix had a strong user base and capable branding.”

“I think it’s going to be very interesting to see who makes the next jump, perhaps through technology such as the Metaverse and Web 3.0.”

The Siesta Keys star added that it’s important to interact with the world day-to-day as an investor and experience things “through your lens and others” to inform your next steps.

With a jump in revenues and some market-changing movements, the entertainment sector at large is charged to establish a productive future.