Investing in Entertainment Stocks

The changes in the entertainment industry are dynamic and happening at warp speed. Total US commercial and media spending hit $1.189 trillion in 2012 and is expected to rise to $1.455 trillion by 2016. Here are some sub-group numbers within this total:
· We have 10,509 FM radio stations
· 1.3 billion movie tickets were sold in the US.
· The American Gaming Association estimates that casino gambling generates $35.6 billion per year.
· Entertainment on the Internet grew by 16.8% in 2012 to $37.31 billion.
· In 2013, it is estimated that we have 321 million wireless subscriptions.
· TV sets now enable the Internet to deliver rented movies.
· AT&T and Verizon are streaming TV programs in home via ultra high speed Internet.
· We have advanced smart phones, Digital Video Recorders (DVRs), Video on Demand (VOD) and digital movie players.

In this segment we will look at stocks that cut across various segments of this industry.

Movies still dominate the “away from home” entertainment with 1,285 million viewers, followed by theme parks at 350 million and sports events at 133 million. The current craze is for supernatural, apocalyptic themes.

Time Warner (TWX) has produced “The Conjuring” with the second highest opening revenue at $41.9 million.

Viacom (VIA) produced 4 films with these themes, grossing a total of $718.7 million

Lions Gate (LGE) produced and distributed “Sinister” and “Possession” and is set to release five more films on this theme. Lions Gate is more that just a movie producer and distributor. Based in Vancouver, BC, it produces and syndicates TV programs. home entertainment and distributes digital content. It produces 20 TV shows over 20 networks and distributes 280 TV series. Their library has 15,000 movie and TV episodes. It also sells to retailers and rental kiosks.

Sony (SNE) is the owner of Screen Gems. It plans to do a remake of “Carrie.”

Liberty Capital (LCAPA) is primarily a holding company with ownership of the Atlanta Braves, a pair of CBS affiliates and a piece of the MacNeil/Lehrer News Hour. It owns stock in Time Warner, Viacom and Live Nation (LYV). In addition it has a 40% stake in Sirius XM radio.

Dreamworks Animation (DWA) of “Shrek” fame now has a new entry: “How to Train Your Dragon.” So far it grossed $493 million

On the takeover front, Comcast (CMCSA) is buying GE’s cable unit with 23 million subscribers. It has a test program in Augusta, GA offering TV via the Internet.

In motion picture exhibition Cinemark (CNK) is the leader with 504 theaters worldwide and 5,794 screens. In the US it has 332 theaters and 4,434 screens. In Latin America they have 172 theaters and 1,390 screens in 13 countries. They have a presence in 14 of the 15 top motion picture areas in Latin America.

Moving to the gamming industry we have key companies including Caesars Entertainment (CZR), Las Vegas Sands (LVS), MGM Resorts (MGM) and Wynn Resorts (WYNN)

In the cruise industry the key players are Carnival (CPCCI) and Norwegian Cruise Line (NCLH)

The above discussion is neither a recommendation to buy or sell any of the aforementioned stocks. You must always do your own diligent research.

We close this segment with a nostalgic look back at the musical phenomenon called the “Fastastiks” On a shoestring budget of $900 for the set and $540 for costumes it opened in 1960 at the Sullivan Playhouse in downtown Manhattan. Anyone seeing the production cannot forget the theme “Try to Remember.” It had the longest run on off- Broadway for 42 years and 17,162 performances, closing in 2002.

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