TL;DR
- The U.S. media and entertainment industry is the largest in the world, worth $717 billion, and is expected to reach more than $825 billion by 2023.
- Most of the media you see comes from one of the six major media companies, called The Big 6.
- The U.S. publishing industry, which includes both physical and digital books, raked in $38 billion in 2018.
We are living in a consumer culture in the U.S., and it’s not just the physical products we buy that define us. The content we consume plays a significant role in our daily lives. From eye-catching billboards for upcoming movies to new music playing on the radio, and ads for video games at the bus station, media is everywhere, and as consumers, we thoroughly enjoy the entertainment it provides.
The U.S. media and entertainment industry is the largest in the world, valued at $717 billion. It represents a third of the global industry and encompasses motion pictures, television programs, commercials, streaming content, music and audio recordings, broadcast, radio, book publishing, video games, and ancillary services and products. According to the 2018-2023 Entertainment & Media Outlook by PriceWaterhouseCoopers, the industry is projected to exceed $825 billion by 2023.
Did you know that 90% of the media you see in the U.S. comes from one of the six major media companies: Comcast, The Walt Disney Company, News Corporation, Time Warner, Viacom, and CBS? These conglomerates, known as The Big 6, dominate the industry.
Understanding the relationships between sub-companies and their parent companies can be challenging. For example, 20th Century Fox, Fox Searchlight, and Fox News are all owned by the News Corporation. To make things easier, Public provides comprehensive profiles, earnings reports, and more for each company, allowing you to break down the conglomerates into manageable pieces.
Shares of stock in these media conglomerates and their acquired companies can trade for more than $200 per share, making it difficult for investors with limited budgets to invest flexibly. However, fractional shares, also known as slices, have changed the game. With slices, investors can buy fractions of shares without purchasing the whole share. This means that even if you have a limited budget, you can invest in your dream companies. For example, if a company you like is trading at $100, but you only have $20 to invest, you can buy 20% (or 1/5) of a share. If the stock price rises and you decide to sell, you’ll earn a return proportionate to your original slice.
Fractional shares allow for portfolio diversification, reducing the risk associated with investing in a single stock. Instead of having all your money tied up in one expensive stock, you can now buy slices of multiple stocks, spreading your investments and potentially lowering your risk.
What are Media and Entertainment Companies?
Decades ago, media and entertainment referred to newspapers and movies. But today, almost everything we see or hear can be considered media and/or entertainment. The industry can be divided into four subsectors:
Filmed Entertainment
This subsector includes films, movie theaters, TV subscriptions, electronic home video production, distribution, and consumption. Box office receipts were expected to exceed $11 billion in 2019, with cinema advertising earnings of $991 million. The rise of streaming services has transformed this traditional industry, with big players like Disney+ creating their own services or acquiring smaller companies.
Music
The music industry, including concerts and touring, reached $22 billion in 2019. All recorded music segments, including digital, streaming, and sync licensing, experienced growth. Sync licensing covers various mediums such as TV ads, in-flight entertainment, satellite radio, restaurants, touring, live entertainment, and merchandise.
Book Publishing
The U.S. publishing industry, including physical and digital books, is the world’s largest, valued at $38 billion in 2018. The market is divided into professional, educational, and consumer publishing, with consumer books holding the largest market share. By 2023, digital publishing is expected to account for nearly 60% of all U.S. publishing.
Video Games
Gaming and esports have their unique place in the industry and can be considered part of media and entertainment. This subsector was worth $281 billion in 2019, more than double its size in 2016.
Why Invest in Media and Entertainment?
The media and entertainment industry has witnessed the transformative effects of new technology on content consumption. With digital, mobile, social, and emerging technologies like virtual reality and AI voice technology, consumer behavior has shifted significantly, especially among millennials. This shift has created what is known as the attention economy.
How to Find Media and Entertainment Companies to Invest in?
Research is key! Start by creating a watchlist of stocks and ETFs in the media and entertainment sectors. Familiarize yourself with the theme and track the companies and ETFs that interest you on the Public app. Following news and updates from these companies can help you stay informed and learn more about them every day.
The bottom line is that investing in media and entertainment is a popular path to pursue. Dive into the subsectors, build your knowledge, and stay engaged. The industry has been an integral part of American daily life since its inception, and companies continue to transform and provide the best content through technological innovation.
Invest in the exciting world of media and entertainment with investment. Begin your journey and explore opportunities in this dynamic industry!
