As the middle-class is growing, more and more people are turning to stocks as an investment and way of deriving income. The entertainment industry in particular, is hugely popular. And the demand for products relating to entertainment, be it movies, music or casinos, is continuing to grow. Importantly, entertainment has always had a central role in the lives of humans. This means that even in more negative times where the economy has been uncertain, entertainment has always been in demand. Subsequently, purchasing entertainment stocks looks to be a good bet given the consistent demand in this sector.
What are entertainment stocks?
Entertainment stocks are the shares in a company that get huge amounts of their revenue from the entertainment industry. Of course, many of these companies don’t always solely operate in the entertainment industry, but may have their fingers in many other pies as well. But, to count as entertainment, their core must be within this industry. For those who opt to invest long-term, using the buy-and-hold approach, is likely to earn profit over the longer term.
The media and entertainment industry has different areas. When considering stocks, consider the key areas. These include film and television production, broadcast networks, streaming services, publishing, music production, theme parks, and gaming.
Why invest in the entertainment industry?
With so many options, there are multiple reasons to invest. Depending on your goals, there is a lot of growth potential in this sector. It’s rapidly growing and as technology continues to evolve, there are always going to be new opportunities for entertainment coming through. Adding entertainment stocks means diversifying your portfolio. As outlined above, there are various sub-sectors within entertainment which means that maintaining a diverse portfolio is a lot easier. And, in doing this, you can reduce the investment risk.
As proven in recent years, the entertainment is a particularly resilient industry. Even when the economy is suffering a downturn, people are consuming media. In fact, during harder times, it’s likely more people turn to entertainment and media to forget their troubles and worries. This means that there is strong growth and bounce-back potential as well.
Top entertainment stocks to watch
Currently, there are six major entertainment stocks to keep an eye on — Walt Disney Company, Take-Two Interactive, Roku, Tencent Holdings, FuboTV, and Electronic Arts. Each of these companies have made significant gains in recent years and are generally seen to be constantly growing.
Top of the list is the Walt Disney Company. Unsurprisingly, this is one of the largest entertainment companies out there. It’s continued growth is due to the amalgamation of numerous franchises and other studios such as Pixar, Marvel, and ILM. The value of this stock was proven back in 2020. During the pandemic, Disney not only cemented itself as an entertainment giant, but saw the Disney+ platform really take off. The long-term growth potential, particularly when it comes to streaming services is unparalleled. And with other parts of the business (theme parks and film production), now in recovery after the pandemic, further growth is expected.
Take-Two Interactive is in the video game industry. Over the past ten years, it has been one of the biggest growers in this sector. It’s well known for publishing hugely popular console games including Red Dead Redemption and Grand Theft Auto. There are many other game franchises under its umbrella as well. As such, it’s a leader in this market and has moved to purchase mobile-game leader, Zynga to reach a wider audience. This means reaching out to the casino sector and operating games on sites like Monkey Tilt Casino. Operating within the gambling sector is an excellent way to ensure continued growth.
Finally, it’s worth taking a look at Roku. This streaming hardware is integrated in many smart TVs. Not only does it distribute content from other companies, but it also earns ad revenue. It’s grown very quickly too, building an enormous user base in a very short period of time. With cloud and streaming services becoming the norm, Roku is a solid option.
However, investing in entertainment stocks is never easy. It’s always a gamble. It’s essential to consider the latest technological trends and what types of media are popular before making that initial investment.
