3 Film & Television Production Stocks to Watch Amid Dull Industry Trends

Industry Overview - The Zacks Film and Television Production and Distribution industry is experiencing increased demand for digital entertainment due to operational constraints in traditional venues like movie theaters and theme parks, driven by the work-from-home trend [1] - Companies such as Live Nation Entertainment, TKO Group Holdings, and CuriosityStream are benefiting from this trend, although rising content costs are pressuring profitability [1] Industry Trends - Over-the-top (OTT) services are gaining prominence as content creators distribute through these platforms to leverage franchise popularity, while streaming companies are producing original programming to reduce reliance on third-party content [3] - Binge-watching and advancements in technology are leading to increased consumption of content on smaller screens, prompting industry players to pivot towards digital distribution [4] - Technological advancements, including laser projection systems and immersive experiences, are enhancing the viewing experience, but alternative distribution channels are challenging traditional exhibitors [5] Financial Performance - The Zacks Film and Television Production and Distribution industry ranks 155, placing it in the bottom 37% of over 246 Zacks industries, indicating a negative earnings outlook [6][8] - Despite a gloomy outlook, the industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500, returning 46.8% over the past year compared to 17.3% and 10.9% respectively [10] Valuation Metrics - The industry is currently trading at a trailing 12-month price-to-sales (P/S) ratio of 2.79X, lower than the S&P 500's 5.33X and the sector's 2.31X [12] Company Highlights - CuriosityStream: Achieved its first positive net income and adjusted EBITDA, with a 26% year-over-year revenue growth to $15.1 million, driven by a $4 million increase in licensing revenues [15][16] - Live Nation Entertainment: Reported record-breaking deferred revenue levels of $5.4 billion for concerts, up 24% year-over-year, with 95 million concert tickets sold for 2025 events [21][22] - TKO Group Holdings: Reported revenues of $1.27 billion and adjusted EBITDA of $417.4 million, reflecting a 23% year-over-year growth, bolstered by acquisitions and strong performance from UFC and WWE [26][27]