Looking for the best media stocks to invest in? Find out some of the top choices plus the advantages and disadvantages of investing in these blockbuster shares.
Media is all around us, shaping our perceptions and experiences. Today’s media giants are at the forefront of our imaginations, redefining both the content we consume and the ways we access it.
As the best media stocks continue to innovate and stream straight to our eyeballs, they offer promising opportunities for investors looking to tap into this ever-evolving industry. Whether you’re a seasoned investor or just starting out, these media stocks are worth a closer look.
What are the best media stocks?
This sector constantly shifts and finding the best media stocks can feel like trying to shoot arrows at moving targets, on horseback, while filming a blockbuster Western film. To give you some starting inspiration for action, we’re shining some lights and cameras on these top media stocks:
Media stocks include shares in companies involved in creating and distributing content across traditional and digital platforms. These companies range from film production and television broadcasting to digital streaming and publishing.
The media landscape is rapidly growing, particularly in digital areas. For instance, total global entertainment and media revenue grew by 5.4% in 2022, reaching $2.3 trillion (around £1.9 trillion), with a positive but declining growth rate forecast until 2027, according to research by PwC.
Types of media stocks
The media industry is vast and varied, giving investors lots of choices. Here’s a look at the main types of media stocks:
Broadcasting and entertainment. These are the big names in TV and film production, cable operations, and broadcasting. They’re behind many of the shows and movies we stream at home or watch in theatres. Big players include Disney and Netflix.
Publishing. This category includes companies that publish books, newspapers, magazines and digital content. Despite the rise of digital media, traditional publishing houses like the New York Times still play a significant role in the industry.
Streaming services. As more people choose streaming over traditional TV, companies that offer streaming of music, video and other forms of media (like podcasts and audiobooks) are booming. Leaders in this space include Spotify for music and Netflix for video, continuously looking for ways to grow their subscriber bases.
Digital advertising and social media. These companies make money by selling ads online and operating social media platforms where those ads appear. Giants like Google and Facebook dominate, but there are many other niche players as well – most recently, Reddit.
How to invest in media stocks
Open a sharing-dealing account. The first step in investing in media stocks is to open a share trading account. Choose a platform that suits your needs, whether it’s one with robust research tools, low fees or a user-friendly interface.
Fund your account. Once your account is set up, proceed to fund it. You can do that via a bank transfer, debit card or any other means allowed by your share-dealing platform.
Research and choose media stocks. Research the best media stocks for your portfolio and then search for them on your chosen platform. You can search by company name or ticker symbol.
Buy shares. Once you’ve found the media stock you’re interested in, select the amount you want to invest and hit “buy.” And just like that, you’re now officially an investor in the media sector.
Free fund trading Expert insights Wide range of accounts
We analysed all popular share dealing platforms in the UK using 35 data points and combined this with our expert insight from using the apps. The platforms we've selected as best for each category offer stand-out features or a unique combination of elements for a specific aspect of investing. If we show a "Promoted for" pick, it's been chosen from among our partners and is based on factors that include special features or offers, and the commission we receive. Keep in mind that our picks may not always be the best for you – it's important to compare for yourself. More details in our full methodology.
Why do people want to invest in media stocks?
Investors are keen on media stocks because this sector is crucial in shaping how we consume news and entertainment globally. Consider this, billions of people around the world log on to the internet every day, many of them to stream videos, scroll through news or download content. Attention and eyeballs equals opportunity and possible revenue.
These vast audiences spell big potential for companies in the digital media and streaming landscapes. In 2024, 5.3 billion people have access to the internet, with that number expected to soar to 7.9 billion by 2029.
Putting money into media stocks is like getting a front-row seat to the latest advancements in technology and entertainment. The growth possibilities are massive as new platforms emerge and evolve to capture audiences’ attention with innovative content delivery methods. With internet use continuing to climb and a growing demand for on-demand media, companies in this space could be poised for significant expansion.
Advantages of investing in media stocks
Here are some compelling reasons why media stocks might be a valuable addition to your investment portfolio:
Surging global consumption. As the world becomes more connected, the demand for media content is skyrocketing. With over half the global population now online, and numbers still climbing, the appetite for entertainment and information is greater than ever. This trend is not just limited to developed nations, with emerging markets also seeing a rapid increase in media consumption as internet accessibility improves.
Innovation and adaptation. Media stocks are at the forefront of technological innovation, constantly adapting to changes in how content is consumed. Giants like Disney and Netflix are continually evolving, pushing into new markets and experimenting with different content formats to capture a larger audience. This adaptability makes them poised to lead the market as consumer preferences shift.
Revenue from diverse streams. Media empires often have multiple revenue streams, including advertising, subscriptions and licensing deals – making them resilient in changing economic climates. The expansion of streaming services, for example, has created a recurring revenue model that benefits investors, especially as more people opt for on-demand content over traditional media.
Economies of scale and low marginal costs. One of the biggest financial advantages for media companies, especially those in digital content and streaming, is economies of scale. Once a platform or content is developed, the cost of serving one additional customer is almost negligible. This near-zero marginal cost of distribution means that the best media stocks c can increase a customer base without proportionately increasing costs, leading to higher profit margins with scale.
Disadvantages of investing in media stocks
As with any investment, it’s important to think long and hard about the risks before you dream of becoming a media mogul and tying up your hard-earned money in media stocks:
Regulatory pressures. As media consumption increases, so does the scrutiny on media companies to make their platforms less addictive and more transparent. Governments worldwide are stepping in to regulate everything from social media algorithms to digital advertising practices, which could impact the profitability and operational freedom of these companies.
Cyclical nature. Much like other industries, media is not immune to economic cycles. During economic downturns, advertising budgets are often the first to be cut, which can hit media companies hard. Especially the media stocks that are heavily reliant on ad revenues.
Content saturation. The digital age has led to an explosion of content, making it increasingly challenging for media companies to hold the attention of a fragmented audience. This saturation can dilute audience engagement and make it harder to grow subscriber bases or maintain high advertising rates.
High churn rate. Media companies face the constant challenge of content renewal. As viewers quickly consume content, the pressure to release new, engaging material is relentless. This high churn rate can lead to significant production costs and the risk of content not meeting audience expectations, which can affect subscriber growth and retention.
Monopoly risk. Because of economies of scale and the advantages media stocks gain as they grow, becoming a monopoly (and the possibility of unfair competitive advantages) becomes an issue and can lead to governments or regulatory bodies clipping the wings of companies or preventing big mergers.
Expert comment - What's the best thing to look for in a media stock's financials
If you're thinking about investing in media stocks, it's worth taking a look behind the curtain - don't let the glitz and glamour fool you, they need to be researched just like any other stock.
Key areas to take a look at will be a company's cash reserves, and also look out for healthy and consistent cash flow. Having plenty of cash on hand allows media stocks to invest in content and produce new material. The flipside of this is that you should watch out for excessive levels of debt, especially if the cashing coming in (perhaps from subscription revenue) isn't capable of bridging the gap over time.
Alternative ways to invest in media stocks
Other than investing in individual stocks of companies in the media sector, there are other alternative ways of gaining exposure to this industry. Here are some of your options:
Index funds and exchange-traded funds (ETFs). Investing in ETFs or index funds focused on the media sector is a viable alternative to buying individual stocks. These funds represent a collection of various media-related stocks, providing broader industry exposure and potentially reducing risk through diversification.
Investment funds. Here, a company pools money from individual investors and then invests it in a diversified portfolio of stocks. Investors have to pay a fee, however, for having someone else manage the investment for them.
Investment trusts. These work in a similar manner to funds, with one major difference. While funds are open-ended, allowing continuous trading of stocks and investor withdrawals, investment trusts are closed-ended. The funds are locked in, which allows a more long-term approach.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Pros and cons
Pros
Huge growth prospects due to increasing global connectivity and media consumption
Continuous innovation and adaptation to new markets and consumer behaviours
Diverse revenue streams from advertising, subscriptions and licensing
Economies of scale with near-zero marginal cost for serving additional customers
Cons
Vulnerable to regulatory pressures that could affect profitability and operational freedom
Susceptible to economic cycles, with potential reductions in media spending during downturns
Risk of content saturation in a market flooded with digital media
Continuous production of new, engaging content, can increase costs and risks
Technology can leave some media companies lagging behind
Bottom line
Investing in media stocks can be a smart move for some investors, thanks to the increasing global demand for digital content and connectivity. There’s a whole range of options when searching for the best media stocks, from traditional media powerhouses to cutting-edge streaming services.
However, there are challenges to consider. Regulatory changes aimed at making platforms less addictive could impact business operations. The media sector’s reliance on advertising revenue also makes it sensitive to economic downturns, and the constant need for fresh content can be a major drain on resources.
Whether you’re interested in established companies or newcomers shaping the future of the media industry, it’s important to approach with caution. Make sure to diversify your investments and only invest amounts you’re comfortable with.
Investing in the media industry can be profitable, especially if you choose stocks with strong fundamentals and you manage your investments wisely. Remember that all investments carry the risk of financial loss, however.
Investing in media stocks offers opportunities for significant growth and portfolio diversification. It's an interesting and fast-moving sector that captures the attention of people all around the world.
The main risks of investing in media stocks are technological and cultural disruptions, dependency on hit content, and intense competition, all of which can impact a company's profitability and, by extension – stock performance.
Media stocks can be a good choice for long-term investment, especially if you invest in companies with strong fundamentals, a history of steady growth, and that have proven to be adaptable to changing market dynamics. However, these stocks should be balanced with others from different industries to manage risk.
George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio
George's expertise
George has written 181 Finder guides across topics including:
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