A Horse Race For the “Big 13”

The summer has been an eventful one for big changes in big companies. One of our favorite publications recently released a fun infographic on market cap data for the entertainment sector, which insights we will discuss below. Out of the 13 companies studied, the big three media companies currently, by market cap value, are Amazon and Apple (each over a trillion dollars!) and Comcast (barely ahead of Disney) with an honorable mention to Disney and Sony for being above the $100mm mark. Under that falls Netflix ($77.97 billion), the awkward middle child. Beneath Netflix we have Warner Bros. Discovery ($34.51 billion), Fox ($17.28 billion), Paramount Global ($16.05 billion), and Roku ($11.21 billion). In the single digits we have AMC Entertainment (movie theatre chain) at $6.48 billion, followed by Lionsgate at $2.05 billion, and AMC Networks (AMC+), the baby, at $1.21 billion dollars. Apple’s market cap alone could have single-handedly funded the 2.2 trillion dollar COVID legislation, the CARES Act (2020). 

But what insights did we get from this ordering? Plenty. Companies that lead are diversified. Amazon began by selling books and now sells just about everything, everywhere. Prime Video is a bonus, but it does not run the show. This means that Amazon would do fine without Prime, though it now houses MGM’s catalog post May-1986 as well. Apple excels at computer hardware and software; it’s Apple+ is also a bonus like Prime Video for those using Apple products (and get that first year free). Comcast and Disney each have theme parks (Universal Studios and Disney World/ Land) that sustain them in addition to their television news networks (NBC and ABC) and movie studios. Sony, the only non-U.S. company, has a movie studio and record label, but its main claim is the video game console – PlayStation, which like AppleTV and Roku, supplies the hardware from which all shows flow. 

So what’s in the back of the bus? The companies who have either been spun off (AT&T’s Warner Bros.) into new ones (Warner Bros. Discovery), or are in a bit of disruption and need to sell (Lionsgate’s STARZ), or those whose streaming products never really hit the ground running (CBS All Access which is now, Paramount+ under Paramount Global brand). The uber niche streamers like AMC Networks and Fox may just be small and lean enough to stick around for the long haul, showing that size does not really matter, it’s sticking power that lasts. Netflix is stuck in the middle, literally, and has recently begun diversifying with games and plans for ad-supported video, but the bubble officially burst this year.

The perennial saying, don’t put all your eggs in one basket, rings true here as it does in most any business venture – may the best horse win!

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