The phrase "content is king" has never rung more true. An expanding global market for entertainment and a range of technological advancements are making entertainment more accessible and more engaging than ever before. This means the companies that continue to capture imaginations and create enjoyable leisure experiences stand a good chance of delivering strong returns for shareholders. 

The entertainment industry has also been historically resilient in times of economic downturn, creating a dynamic that allows investors to pursue big growth stories with smaller risk profiles than companies that operate in many other industries. With those appealing characteristics serving as a backdrop, here's why The Walt Disney Company (DIS -1.93%) and Activision Blizzard (ATVI) are top options for investing in entertainment. 

Statue of Walt Disney and Mickey Mouse in front of the Magic Kingdom castle at Disneyland.

Image source: Disney.

The Walt Disney Company

When most people think about the entertainment industry, one of the first names that's likely to come to mind is Walt Disney. That's a testament to the company's history of success and points to brand strength that will be an asset for decades to come. The House of Mouse has built a media empire spanning move theaters, theme parks, television, and consumer products, and it leverages an impressive degree of synergy between these segments. Hit movie properties become fixtures at its theme parks, featured on hot-selling merchandise items, and assets for its cable networks -- creating a positive feedback loop that positions the company to continue being one of the top-performing players in entertainment. 

Disney's shares price has seen little movement over the last year, up just 3% over the stretch while the S&P 500 index has notched roughly 35% gains. The impact of cord-cutting on its media networks segment has led to more cautious outlooks on the company's business, and the specter of increased competition from Netflix and Amazon is fomenting additional uncertainty. However, I see the recent lack of enthusiasm for the company's prospects creating a worthwhile buying opportunity for long-term investors. Shares trade at roughly 17 times forward earnings estimates, an appealing valuation in the context of Disney's prospects and pedigree.

No company has a better slate of entertainment franchises, and that advantage is set to become even more pronounced if its pending acquisition of Twenty-First Century Fox assets goes through. In addition to opening up new opportunities at movie theaters and theme parks, the Fox deal will bolster Disney's position in the streaming space. Disney is set to launch its own over-the-top streaming options -- a move that could have tremendous payoff and mitigate the pressure currently facing its networks segment. Adding the bulk of Fox's entertainment assets will strengthen Disney's content offerings for streaming services, give it greater leverage when negotiating pricing with third-party services, and bring its stake in the Hulu platform up from 30% to 60%. It's a move that will fortify the company's position in entertainment and allow it to continue to shape the industry landscape in a favorable direction. 

Disney also deserves some attention as a dividend growth stock. The company has increased its payout by 124% over the last five years, and it still has lots of room for growth -- with the cost of distributing its current dividend representing just 30% of trailing free cash flow. 

With a stable of blockbuster entertainment franchises that's only getting stronger, a track record of resilience and innovation that spans nearly 95 years, and a business model that allows its successes to trickle into other segments, Disney is a top investment in the entertainment space.

Characters from Activision Blizzard games (Skylanders, Destiny, Overwatch, World of Warcraft, and Candy Crush) standing together.

Image source: Activision Blizzard. 

Activision Blizzard

Video games are one of the fastest growing segments of the entertainment industry, and Activision Blizzard stands out as one of the most appealing long-term investments in the space. PricewaterhouseCoopers estimates that the global video-game industry will have undergone 5% annual growth from 2016 to 2020, and with more sales coming from digital downloads and in-game purchases, large publishers are on track to capture more profits than ever before. 

With industry tailwinds at its back, a high barrier to entry for new competitors, and a long list of competitive strengths, Activision Blizzard has the chance to nourish its position in video games into a multimedia empire. No other third-party video-game publisher has a more potent collection of franchises or a better history of delivering consistent quality with its releases. Its core console games business looks to be in great shape, with growth for digital sales pushing profits higher and the potential for new customers in emerging markets like China and India presenting long-tail growth opportunities. Activision Blizzard also has a long growth runway in the mobile space.

The company completed its acquisition of King Digital in 2016, instantly making it one of the leaders in smartphone and tablet games, but it's still in the early phases of taking advantage of some big opportunities. The King Digital unit is just beginning to implement advertising as a sales model for its games -- a development that could prove hugely profitable. Right now, the large majority of mobile sales come from a small pool of players purchasing in-game currencies and items. Introducing advertising presents a way to dramatically widen the sales stream, and it could turn into a major performance driver in coming years. 

Activision Blizzard is also in the early stages of expanding beyond the video-game space. A third season of a television adaptation of its Skylanders franchise will debut on Netflix this year, a Call of Duty movie franchise is in the works, and the company is exploring film adaptations for other big properties like Overwatch. The publisher is also upping its merchandising efforts, having recently launched a dedicated consumer-products segment that's focused on pushing its properties even further into the mainstream.

With technologies like augmented reality and virtual reality on the horizon, Activision's development assets and franchises make it one of the companies that's most likely to emerge as a winner in the mixed reality space as well. The company also looks to be one of the biggest beneficiaries of the growth of esports -- or competitive video games as spectator entertainment. The stock might look a bit pricey at roughly 29 times forward earnings estimates, but Activision's laundry list of promising assets, position at the top of a fast-growing industry, and emerging growth catalysts outside its core competency make it an investment that has tremendous long-term potential.