WMG - Zacks Industry Outlook Highlights Warner Music News Lions Gate Entertainment and IMAX | Benzinga
Today, Zacks Equity Research discusses Warner Music Group (NASDAQ: WMG), News Corp. (NASDAQ: NWS), Lions Gate Entertainment (NYSE: LGF-A) and IMAX Corp. (NYSE: IMAX).
Industry: Film & TV
The Zacks Film and Television Production and Distribution industry is benefiting from a spike in demand for digital entertainment, fueled by limited capacity and operational limitations in movie theaters, theme parks and cruise lines. The increased consumption of media, music and news over the web, triggered by the work-and-learn-at-home wave, has been a key catalyst for industry participants like Warner Music Group, News Corp., Lions Gate Entertainment and IMAX Corp. Companies have been focusing on a superior product strategy and prudent capital investments. Steady recovery in the advertising spending environment and resumption of production pipelines bode well for film and television production companies.
Industry Description
The Zacks Film and Television Production and Distribution industry comprises companies involved in film and TV production, distribution and exhibition. The main activities of the industry participants include the production and distribution of entertainment content to theaters, TV networks, video-on-demand platforms, streaming services and other exhibitors.
Imax offers entertainment technology and specializes in motion picture technologies and presentations. Industry participants produce and distribute motion pictures for theatrical and straight-to-video releases alongside TV programming. These players are heavily dependent on the box-office performance of their films, both domestically and internationally, the number of film releases and the ratings of TV shows.
3 Film and Television Production Industry Trends in Focus
Over-the-Top Services Gain Prominence: Companies involved in content creation are looking to distribute content through over-the-top services to leverage the popularity of their franchises. With this, they are looking to provide exclusive content and a differentiated experience. However, streaming companies are increasingly producing original and award-winning feeds to reduce licensing costs and excessive dependence on third-party content providers. This is likely to hurt industry participants' content distribution strategy.
Binge-Watching Drives Consumption: Factors such as binge-watching, deepening Internet penetration and advancement in mobile, video and wireless technologies have got viewers glued to small screens. To keep pace with new consumption patterns, industry participants are turning to digital content distribution. The emergence of digital capabilities is making consumer data easily available to companies.
With the use of AI tools, production houses are gaining a better understanding of user preferences. This helps them produce content that strikes a chord with viewers. However, increasing spending on content and sales & marketing is hurting profitability due to stiff competition from streaming players.
Technological Advancement Aids Prospects: Exhibitors are turning to highly efficient and cost-effective technologies like laser-based projection systems to enhance image quality and the entire movie experience. Additionally, the use of technologies like motion seating, ...