The old guard is shifting quickly in the world of media. Special effects and 3-D have changed cinematic viewing. DVD distribution is being altered. Newspapers are pleading for donations. Cable companies are scrambling as gaming consoles slowly transform pay-TV. In a vast industry constantly inundated with new players and new ideas, there's just no easy way to predict the future.
However, we know that some companies are better positioned for the long haul than others, so today I asked some of our analysts to name names, and reveal stocks on their wish list, by answering this question:
What will be the biggest change in media this year, and which companies do you like for the long run?
Here's what they had to say:
Eric Bleeker, Fool.com Editor: The only sure play in media right now seems to be the Jeff Zucker pair's trade: Short his ability to run a network, and go long on his chances of a promotion. Since there are no corporate executives futures market (yet ...) to play this sure thing, I'll have to go with the next best thing: the growth of data traffic.
Through 2013, Cisco Systems
Rick Munarriz, Rule Breakers Analyst/Writer: I can't get excited about 3-D television. It may have been the big buzz during this month's Consumer Electronics Show -- with plenty of cable networks committing to programming and TV manufacturers committing to rolling them out -- but consumers aren't ready for premium sets and donning hokey glasses.
By the time 2010 is over, it will be the year of digital convergence for the masses. A year or two ago, it was mostly nerds like me watching digital long-form video. The technology to get digital streams into the home theater wasn't exactly seamless, and mainstream audiences lacked the patience to watch anything longer than a sneezing panda or any short clip on their computer.
It's all changing. Netflix
Tomorrow has finally come today. I pity the cable providers and DVD rental chains that will grow less relevant as couch potatoes explore new ways to entertain themselves in 2010.
Tim Beyers, Ruler Breakers Analyst/Writer: When it comes to the print and digital media business, there's very little we know right now:
- We don't know if Apple's
(NASDAQ:AAPL)tablet, presumably dubbed the iSlate, will generate incremental revenue for the company or if it will cannibalize sales from its notebooks, etc.
- We don't know if there will be an iTunes-like model for Web-published content, though it would make sense to have one.
- We don't know how the top newspaper holding companies such as Gannett and McClatchy will recruit the next generation's top reporters when they've already fired so many of this generation's top reporters.
And that's just off the top of my head. What we do know is that large numbers of media outlets still allow Google
For content producers and distributors, Google is still the best option for earning a return. That won't change during 2010. What might change is how investors value Google's competitive edge in this area. The stock still trades for below its historical averages.
Eric Jhonsa, Fool.com Writer: Thus far, online video has mostly been something watched on PC monitors. And that's put a limit on how thoroughly it can challenge cable, satellite, and DVDs for the leisure time of consumers. But big changes are under way. Sales of Internet-connected TV sets and Blu-Ray players are expected to soar this year, and this hardware will often support video from the likes of Netflix, YouTube, and Amazon right out of the box. The big three gaming consoles are also supporting a growing list of online video options. Expect cable and satellite providers to begin feeling the heat.
Netflix looks like the best play here. They've done a remarkable job of building their streaming library, and lining up hardware support for it. This should both put Netflix on even better footing against Blockbuster
And there you have it -- the best media picks for 2010. After you've shared your thoughts in the comments section below, check out whether the best stocks of 2009 will continue their surge in 2010.
Fool contributor Jordan DiPietro compiled this article, and owns no shares of the companies mentioned above. Akamai Technologies and Google are Motley Fool Rule Breakers choices. Apple and Netflix are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy looks spectacular in 3-D.