The media landscape is changing dramatically. Cable television and movie theaters continue to lose ground to audio and video streaming, while newspapers and radio struggle to keep up with podcasts, digital newsletters and text alerts.
It’s a brave new world that has upended the traditional business models that kept media and entertainment companies afloat for nearly a century. But within this shifting industry some clear winners have begun to emerge. While many companies lose ground to new competitors and fall by the way side, others are getting stronger and coming out ahead.
This success is being reflected in the share prices of the most successful media stocks. Here are my top media stock picks for 2024.
Spotify (SPOT)
Spotify (NYSE:SPOT) continues to be the leading audio-streaming service and a preferred way for people to consume music and podcasts. Consequently, SPOT stock has gained 86% in the last 12 months, including a 16% gain so far in 2024. Despite the big run, analysts see more gains ahead. UBS (NYSE:UBS) just raised its rating on Spotify’s stock to “buy” from “neutral,” and lifted its price target on the shares to $274, implying another 25% upside from current levels.
Spotify has succeeded in convincing consumers to pay a monthly subscription fee to stream music rather to buy and own albums or individual songs. Now, the company is focused on controlling costs and remaining a lean operation even as it grows leaps and bounds. In December, Spotify announced plans to layoff 17% of its workforce. The headcount reduction works out to roughly 1,500 jobs. The company has also raised prices for its monthly subscriptions and has expanded the podcasts and audiobooks it offers.
New York Times Co. (NYT)
There’s been a lot of reports of layoffs and closures across the newspaper industry in recent months. But not at New York Times Co. (NYSE:NYT). The publisher of The New York Times newspaper is thriving thanks to a digital first strategy and an increasingly diverse set of offerings for its subscribers. The Times has complemented its award-winning news coverage by adding popular games such as Wordle, beefing up its sports pages, and focus on lifestyle features such as weddings and recipes.
The strategy is paying off. Last November, the company announced that its total number of subscribers surpassed 10 million for the very first time. The vast majority of subscriptions are digital, with only 670,000 daily print subscriptions for the newspaper. The company has a goal of achieving 15 million paid subscriptions by the end of 2027, and says it may reach that milestone sooner than planned. The success has bolstered NYT stock, which has gained 37% in the last 12 months. Not bad for the old, grey lady.
Netflix (NFLX)
In terms of movies and television, Netflix (NASDAQ:NFLX) has really separated itself from the streaming pack. With 260 million subscribers worldwide, it is today the largest streaming service, dwarfing most of its competitors. It’s also currently the only streaming service that is profitable. The company is winning the streaming wars by continuously serving up content that people want to watch, and by taking a global approach to the movies and television shows it adds to its platform.
From Bollywood films to documentaries about Formula One racing, Netflix takes a global view and continues to push international growth. It also remains flexible and willing to adapt, adding advertisements to its streaming service and pushing into live sports broadcasts, two things it said it would never do. The approach has worked and today Netflix remains the undisputed streaming king. This helps to explain what NFLX stock is up 56% over the last year, including a 20% jump higher this year.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
