Content is King…Even on Wall Street

CrownTraditional 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 and is now the biggest 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.

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.

Even newspaper conglomerates outperformed the S&P 500, which rose by 13.7%. Six of the 8 major US publicly traded companies were up last year, four of those by more than 30%. These stocks have been pummeled over the last few years but investors liked the increase in profits (although revenue continues to fall dramatically), smart investments in digital start-ups and the widespread introduction of pay-walls. Lee (+69), McClatchy (36.8%), EW Scripps (35%) and Gannett (34.7%) were the biggest winners.

Newspaper stock performance_trended

In a period of high unemployment and economic uncertainty, Wall Street clearly 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%
Facebook $26.22 -30%
Zynga $2.36 -67%

 

 

Follow Levi

Levi Shapiro

Managing Partner at JIMMI Fund
Levi Shapiro is the Managing Partner at the JIMMI Fund, a corporate venture investment fund, and concurrently Partner at TMT Strategic Advisors. He is also the organizer of Marketing & Ad:Tech Israel (www.adtechsummit.com), Israel's largest conference for digital advertising.

During a 20 year career inmedia and technology, including 7 years in Asia, Levi launched new business units(IBM), new products (Toyota) and new startups (TwoMinute Television, Snack Mobile, etc).

He teaches Entrepreneurship and Mobile Marketing as an Adjunct Professor at IDC Herzliya, serves as Mentor in Residence for The Hive accelerator and writes a bi-weekly column about digital media and technology in the Jerusalem Post called "Unleavened Media ".

Mr. Shapiro is a graduate of Tulane (BA), Cornell (Asian Studies) and MIT (MBA)
Follow Levi

Leave a Reply