The media sector has been relatively quiet in 2020, so far. Time for a look back at 2019. The sector, as per the Telecompaper Global Media index, did almost as well as the S&P 500 index. The absolute winner in our basket was Snap, up almost threefold. McClatchy was the worst stock to own in 2019, down 94 percent. Furthermore, in most segments performances diverged widely. Gaming, social networking, VOD and conglomerates were exceptions, with most shares in those segments doing (very) well last year. The theatre segment stayed behind.
2020: a soft start
So far in 2020 we have seen Walt Disney round off a solid 2019 in terms of box office receipts. The total stands at USD 11.1 billion. Sony, a competitor to some extent, launched a new brand campaign and announced the arrival of the PlayStation 5 toward the end of 2020. Another competitor, Quibi, albeit in a very specific niche (short-form mobile video), announced its own arrival for 6 April.
In the broadcast segment, Nexstar struck a measurement deal with Nielsen and Meredith acquired a recommendations platform. ProSieben apparently resumed the sale process for its production unit Red Arrow. The fight for control between Mediaset and Vivendi continues, this time bringing Mediaset in the lead after a court victory and the Mediaset EGM subsequenty approving the proposed new holding structure. Vivendi acquired a Swiss ticketing company.
In the internet segment, IAC sold its CollegeHumor subsidiary and Naspers' Prosus failed to acquire Just Eat. Small consolation, Naspers' PayU unit acquired PaySense in India.
So far in 2020, AMC Entertainment (-11%) is the weakest share. There are four shares up double digits: VOD provider Bilibili (+16%), Tencent Music (+15%), Sanoma (+13%) and Mexico's TV Azteca (+12%).
2019: media almost in step with the market
The Telecompaper Global Media index ended 2019 with a gain of 27.9 percent, closely behind its chosen benchmark the S&P 500 index, which was up 28.9 percent. The best and worst performers were respectively Snap (+196%) and McClatchy (-94%). While the market grew much more positive about Snap's long-term prospects, McClatchy got into a liquidity crisis in November.
If we zoom into the different segments of the media market, we see widely diverging performances for several sectors: advertising, broadcasting, music and publishing. Others did mostly well, such as gaming, social networking and VOD. Just a single sector, which notably holds just two stocks (AMC Entertainment and Cinemark) was under pressure in 2019. Conglomerates, with large interests outside the media sector, generally did well: construction firm Bouygues (+21%), Comcast (+32%), AT&T (+37%) and Sony (+40%). Their interests in the media industry may have helped their share prices outperform in 2019.
