u/ No-Fig-8614 writes:
What most people do not realize is that the majority of the major studies are owned by larger entities that do not suffer from this. Sure its small term pain knowing that certain projects are on hold. There is a lot of content in the coffers that they can still continue to produce without additional writing.
Most of the major studios also have other revenue streams that power them through. Let’s just take Disney to start. They have $8.3B coming in from parks. They have $5.5B coming in from Streaming. They have 1.9 Billion coming in from cord deals.
Look at Comcast, they have Peacock streamers, they have their existing cable business, they have their internet business (mixed with cable subscribers), they have their mobile unit.. they have plenty to keep powering their way through.
Then you have weird companies like Apple and Amazon who can take virtual losses forever in entertainment and not care. Netflix is weird because of all its custom content but has a massive catalog of back content to keep subscribers happy for a while.
What stocks to look at are the ones that rely only on content to stay alive. Those are the companies to be paying attention too. For instance I’d be very interested in how Warner Bro’s/Discovery are going to be doing. I’d also look at Sony who owes a lot to their entertainment divisions for profits (sure they do electronics and niche other areas), but they own some of the larger studios.
I also don’t want to make this a political topic but the Writers guild really needs to re-think their leverage. Sure the major studio’s wont have new content coming out and already put a massive backlog and delays to projects. The major studios now are conglomerates that own so many other businesses they can keep moving along. They also don’t realize that these studios will keep generating revenue but don’t have to pay any of the writers, actors, production, etc… they have a freeze on money coming in but also a freeze on money going out. The problem with industry consolidation + multi-faceted businesses is you lose your negotiating leverage.
Would love to hear other peoples thoughts on this. What do you think?
Especially their fear of AI As they know will becoming after their jobs. Netflix already was using it to determine what shows and themes would be the most productive for returns. Disney/ILM started using it to replace opening credits. Disney even hired the group that for the end of Mando Season 2 were Luke showed up, another group of people showed they could do a better Deep Fake and they hired them. If I’m not mistaken Netflix used AI to write one of black mirrors episodes.
AI is coming and I can see why writers are so fearful. People are so naive on the idea that AI is coming for jobs even creative.
If anything I’d love to hear from people some of the VFX studios if they are public? That would be were I would start putting money into. Ones that are progressive and have a massive catalogue. It sucks ILM is private (Disney owned), Pixar (Disney Owned), Dreamworks, etc.
I wish Epic which powers the majority of games but also the Volume that is used in almost all new TV productions…. was public but they are private for now.
At the end of the day the stocks to pay attention to are:
The Chips Needed to Make these: Intel, Nvidia, AMD
The Fabs that produce them: TSCM, Samsung, Intel
Then there are companies producing the software: Epic, Blender, Unity. Adobe
The Streaming Services: Netflix, Disney+, Max (Warner Bros) — then you have youtube material being turned into its own streaming service like Curiositystream Inc.
The Companies that specialize in building AI Model with datasets: OpenAI (Microsoft), Google, Facebook, ByteDance, etc.
Then there are the host of startups creating custom chips for these tasks (ASICS), newer software, and existing VFX studios who know how to power them all. Which is where the money will be for future stocks.