7 Stocks for the Future of Entertainment and Media


  • Here are seven stocks to buy for the future of entertainment.
  • Walt Disney (DIS): Bob Iger is righting the ship at the Mouse House.
  • Netflix (NFLX): The latest subscriber numbers blew away Wall Street’s expectations.
  • Paramount Global (PARA): The addition of Showtime premium content could be a catalyst for this stock.
  • World Wrestling Entertainment (WWE): The share price has risen more than 50% in the last 12 months.
  • Spotify (SPOT): The audio streaming service continues to sign up new subscribers in record numbers.
  • Live Nation (LYV): LYV controls 70% of the live music business, giving it a near monopoly position.
  • Amazon (AMZN): AMZN is a growing leader in entertainment with original content, sports, and movie for theatrical release.
media stocks - 7 Stocks for the Future of Entertainment and Media

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Entertainment and media stocks are off to a good start this year. The Invesco Dynamic Leisure & Entertainment ETF (NYSEARCA:PEJ) has gained 15% so far in 2023 as people continue to spend money  on movies, concerts, theme parks, live shows, and streaming. The uptick is welcome news for an industry that was hard hit by the pandemic. Although it has gotten off to a strong start this year, PEJ remains down 14% over the last 12 months as Covid-19 lockdowns ended in fits and starts and consumers tentatively returned to in-person gatherings. Given the proliferation of entertainment and media stocks, there is plenty for investors to choose from as their share prices recover and ascend to new heights. Here are seven stocks to buy for the future of media and entertainment.

DIS Disney $108
NFLX Netflix $360
PARA Paramount $24.30
WWE World Wrestling $87.25
SPOT Spotify $128
LYV Live Nation $78
AMZN Amazon $100

Walt Disney (DIS)

an image of mickey mouse on a yellow background to represent disney (DIS)

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It’s been a tough year for Walt Disney Co. (NYSE:DIS) and its shareholders, but things look to be turning around at the world’s biggest entertainment company. Former CEO Bob Iger returned to run  the Mouse House late last year and has wasted no time in charting out a restructuring plan for the company that is home to streaming, cable channels, theme parks, and cruise ships, not to mention popular properties ranging from Star Wars and Marvel superheroes to Pixar animation and National Geographic.

As part of its recent fourth-quarter earnings release, Disney announced that it would restructure itself into three business segments while cutting 7,000 jobs and $5.5 billion of costs. Moving forward, Disney will operate under three divisions: Disney Entertainment, which includes most of its streaming and media operations, an ESPN division that includes the sports TV network and the ESPN+ streaming service, and a Parks, Experiences and Products division.

The restructuring was applauded by investors, notably activist shareholder Nelson Peltz who called off his proxy fight with Disney following the news. Investors also liked that Disney reported Q4 earnings per share of 99 cents and a year-over-year revenue increase of 7.8% . Both the top and bottom lines were above Wall Street’s average forecasts. DIS stock has gained 22% so far this year to reach $108 a share. After a steep selloff in 2022, Disney’s stock looks to be back in the limelight.

Netflix (NFLX)

The Netflix logo on a tablet with earbuds and a bowl of popcorn nearby.

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Like Disney, Netflix (NASDAQ:NFLX) appears to be on the comeback trail after enduring a very rocky 2022. This time last year, the streaming giant was reporting declining subscriber numbers, and its stock was collapsing in epic fashion. But now Netflix is back in the good graces of investors after taking several decisive steps to right its ship. Chief among the company’s moves was adding advertisements to its streaming platform for the very first time, and cracking down on the practice of password sharing.

Also like Disney, Netflix is going through some changes among its senior management ranks. In late January of this year, it announced that its co-founder, Reed Hastings, would be stepping down as Netflix CEO but would remain with the company as its chairman.

Co-CEO Ted Sarandos will remain in his current role, and Greg Peters, who had served as Netflix’s COO is being elevated to a co-CEO role and will also join the company’s board.

News of Hastings stepping down came as Netflix reported that it had added 7.66 million paid subscribers last quarter, blowing away  analysts’ mean forecast of 4.57 million net new subscribers. The company said that its new content such as the television series Wednesday, the docuseries Harry and Meghan, and the film Glass Onion drove consumers to join its streaming service during Q4.

Paramount Global (PARA)

Paramount Plus mobile app icon is seen on an iPhone representing PARA stock.

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The shares of Paramount Global (NASDAQ:PARA) have been on a nice run this year as well. Since the start of January, PARA stock has gained 43% . The entertainment conglomerate owns a vast array of companies and properties that include the Paramount Pictures movie studio, as well as cable channels such as MTV, Nickelodeon, BET, and Comedy Central. The company also owns TV stations as far away as England and Australia.

Increasingly, Paramount Global is pushing into streaming through its Paramount+ app and service. The streaming service will get a boost later this year when  it adds content from the Showtime premium TV channel.

Additionally, Paramount+ is boosting its original content with shows such as Tulsa King, Star Trek: Picard and a reboot of the show Frasier. The enhancements to Paramount+ have investors excited, judging by the move upward by PARA stock this year. One of those investors is Warren Buffett, who has  a 15% stake in the firm.

World Wrestling Entertainment (WWE)

wwe stock WWE Monday Night Raw at 02 Arena. London

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While professional wrestling might not be everybody’s cup of tea, there is no arguing with the performance of World Wrestling Entertainment’s (NYSE:WWE) stock. In 2023, WWE stock is up 27%. Over the past 12 months, the share price has risen 52%, and it is up 139% through five years. World Wrestling has been a consistent winner for shareholders regardless of how they might feel about body slams and headlocks.

The key to World Wrestling Entertainment’s success, say analysts, is a passionate and loyal fan base that is continually growing, driving revenues up in the process. The company just reported fourth-quarter 2022 results that showed its revenues grew 5% year-over-year to $325 million in the October through December period. For all of last year, revenue grew 18% to reach a record $1.29 billion, while net income increased 10% to $195.6 million and EPS grew 13% to $2.63 from $2.32 a year earlier.

Both live event attendance and TV viewership of pro wrestling grew in 2022. And World Wrestling Entertainment has plenty of room left to grow internationally.

In January of this year, it was announced that former CEO Vince McMahon was returning to WWE as a board member. There are rumors that he wants to put the company up for sale. Whether a sale actually happens or not, WWE stock has proved to be a champion for the shareholders who own it.

Spotify Technology (SPOT)

Spotify (SPOT) logo is on the screen of a smartphone with headphones plugged in.

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Few stocks have moved as high this year as audio streaming giant Spotify Technology (NYSE:SPOT). The shares of the Sweden-based company that specializes in podcasts and music streaming have jumped 52% since the start of 2023. The stock has been on a tear since the company reported its fourth-quarter and full year results in early February.  Those numbers showed that Spotify finished 2022 with 10 million more users than analysts, on average, had anticipated. Nearly a 500 million people streamed music on Spotify during Q4.

Despite its popularity, Spotify remains unprofitable, reporting an operating loss of $708 million for all of 2022. The company pays out two-thirds of its revenue to songwriters, podcasters and other copyright holders. However, there are rumblings that the company plans to raise prices in the U.S. market, where it has more than 50 million subscribers. Such a move could provide a meaningful boost to Spotify’s financial health. Regardless, the company’s popularity with users shows no signs of waning.

Live Nation Entertainment (LYV)

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Its recent spat with Taylor Swift aside, there are several reasons to like Live Nation Entertainment (NYSE:LYV) stock. Among the reasons to be bullish on LYV stock is the fact that Live Nation, which is the parent company of Ticketmaster, has a near monopoly over the live-music business. Today Live Nation controls 70% of live-entertainment events. If you want to see a live concert, you’re likely going to have to deal with Live Nation through Ticketmaster or another of its subsidiaries.

While consumers and musicians grumble about Live Nation’s prices and ticket sales practices, the company continues to have an iron grip on the live-music business, and that is reflected in its earnings.

Last November, the company reported that its third-quarter revenue had jumped 63% year-over-year to  $6.2 Billion, while its operating income had nearly doubled to $506 million. With people returning to live concerts following the pandemic lockdowns., Live Nation is thriving

Amazon (AMZN)

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Amazon (NASDAQ:AMZN) isn’t the first company investors think of when they consider entertainment stocks. But the e-commerce giant is increasingly expanding its footprint in the entertainment world. Amazon Prime Video is now home to a robust library of films and original television series such as Jack Ryan, The Boys, and Three Pines. Plus, Prime Video now has the exclusive rights to broadcast Thursday Night Football games thanks to a $1 billion per year deal it struck with the NFL.

Additionally, Amazon has dramatically ramped up its spending on new, original content, having spent an estimated $715 million on its Lord of the Rings series, making it the most expensive show ever produced. And, Amazon has designs on producing movies for theatrical release.

Last November, the company announced plans to spend more than $1 billion a year producing at least a dozen films for release in movie theaters. While e-commerce remains its bread-and-butter, entertainment is a growing and important part of Amazon’s business.

AMZN stock is up 19% in 2023, but it is down 36% over the last 12 months as it has struggled along with the entire tech sector.

On the date of publication, Joel Baglole held a long position in DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Article printed from InvestorPlace Media, https://investorplace.com/2023/02/7-stocks-for-the-future-of-entertainment-and-media/.

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