Will entertainment content become more valuable as the methods of distribution multiply? With the current speed of proliferation, it may not take long to find out.
According to an announcement on Monday, TiVo
Monday's other related announcement is that News Corp.
These announcements come on the heels of AOL's move to offer "vintage TV" for downloading and Sprint's
So let's step back and look at the big picture: Video entertainment is headed to every possible distribution pipeline. Given the explosion in availability, the content owners -- in other words, the movie studios -- must be a big winner in all of these activities, right? I mean, after all, there are a lot of people to sell such media to. Well, if you look at the stocks, you would think there was no video revolution in progress at all.
Disney
You see, these same companies that are poised to benefit from the growing number of channels also derive significant revenue from advertising. How much will a TV commercial (or a commercial before a movie) be worth if, instead of being seen by the declining population of network viewers, it is viewed by a growing audience of bored and on-the-move cell phone and iPod users? Will the lunch break at the local high school become a video event?
Investors would be wise to take stock of the evolving playing field in entertainment distribution. Digital, video, and traditional media could be on the verge of a large-scale sea change, as well as a large-scale shift in sources of revenue. Given the multiples for the entertainment stocks, there isn't a lot of risk in investing in them and waiting to see whether this distribution phenomenon pays off.
TiVo and Time Warner are Motley Fool Stock Advisor recommendations.
Fool contributor W.D. Crotty owns stock in Disney and News Corp. Click here to see The Motley Fool's disclosure policy.
