Content is King…Even on Wall Street - Levi Shapiro
Traditional media companies had an amazing year on Wall Street. While the Dow Jones Index increased a respectable 6.7%, the US Broadcasting and Entertainment Index surged 40%. In fact, other than Sony (dragged down by its hardware business), 6 of the top 7 media conglomerates substantially outperformed the NASDAQ 500.
Comcast absorbed NBC Universal, becoming the largest player in the sector with a market cap of $99.28 billion. Investors shrugged off pesky details at News Corp, such as bribery, phone-hacking and perjury, increasing the share price by 47%. The biggest winner was Lionsgate Entertainment, which reaped the benefits of hugely successful franchises Hunger Games and Twilight. Viacom, on the other hand, desperately needs more hit shows. TV networks account for 90% of Viacom's profits but ratings at Nickelodeon and MTV last year were down about 30%.
The worst performing media category was video games. Electronic Arts (-30%), Activision (-13%) and Zynga (-67%) saw their margins eaten by free to play (f2p) casual mobile games.
In a period of high unemployment and economic uncertainty, clearly Wall Street thinks that "Content is King"
| Company | Price 1/1/13 | Change |
| Walt Disney | $49.85 | 32% |
| Comcast | $37.36 | 54% |
| Time Warner | $47.83 | 31% |
| NewsCorp | $26.24 | 47% |
| CBS | $38.05 | 28% |
| Discovery | $63.48 | 59% |
| Sony | $11.20 | -38% |
| Time Warner Cable | $97.19 | 53% |
| Charter | $76.24 | 34% |
| Dish Network | $36.40 | 25% |
| Belo Corp | $7.67 | 21% |
| Scripps Network | $57.92 | 31% |
| AMC Networks | $49.50 | 32% |
| Viacom | $54.27 | 13% |
| DirecTV | $50.16 | 13% |
| Sirius XM Network | $2.89 | 61% |
| Lionsgate | $16.40 | 97% |
| Activision Blizzard | $10.62 | -13% |
| Electronic Arts | $14.52 | -30% |
| Amazon | $250.87 | 45% |
| TiVO | $12.31 | 37% |
| Apple | $532.17 | 33% |
| Netflix | $92.59 | 33% |
| Take Two Interactive | $11.01 | -19% |
| $26.22 | -30% | |
| Zynga | $2.36 | -67% |
Tags: Walt Disney, Comcast, Time Warner, News Corp, CBS, Discovery, Time Warner Cable, Charter, Dish Network, Belo, Scripps Network Interactive, AMC Networks, Viacom, DirecTV, Sirius XM, Lionsgate, Activision Blizzard, Amazon, TiVo, Apple, Netflix, Take Two Interactive, Facebook, Zynga, MTV, Nickelodeon, video games, margins, Wall Street, Down Jones, US Broadcasting and Entertainment Index, NASDAQ 500, Hunger Games, Twilight, TV networks, f2p, mobile games
Levi Shapiro is a Partner at TMT Strategic Advisors, a research and strategy firm focusing on the technology, media and telecom sectors. He can be reached at levi@tmtstrat.com or via twitter: @levshapiro
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Levi Shapiro
Levi Shapiro is a Partner at TMT Strategic Advisors, a research and strategy firm focusing on the technology, media and telecom sectors. Clients are split evenly between early-stage, Israeli start-ups and large entities like NTT DoCoMo, OpenTV and the Austra…
