The Hollywood market is going down hill. According to a report by Financial Times, the American movie headquarters lost a total of $524 billion in shares in 2022. Who was hit the hardest? The Walt Disney Company, which is facing its worst fiscal year in 50 years, Netflix, and Comcast.
According to the report, the main reason is that investors are not as confident as before in the so-called streaming revolution. Long gone are the years when platforms such as Netflix, HBO Max, and Disney+ enticed shareholders to invest in them. Now, those same people are watching the platforms deflate and, with them, the advertising market, which also experienced a major slump.
Just look at the figures. Breitbart reported that the entertainment market lost 40% of its market value this year. According to the Dow Jones Media Titans index, if in 2021 the shares belonging to the 30 largest media companies in the world were worth $1.35 trillion, this year they end with a value of just $808 billion.
The sector with the highest losses
The numbers are not the only thing that is worrying. It is also striking that Hollywood is the sector that recorded the most significant losses in the market, even surpassing the banking and telecommunications markets, which lost 14.5% and 11.2%, respectively, in the stock market this year.
According to Financial Times, the reasons for this decline could be increased competition, with more streaming platforms with each passing year, coupled with a rise in the price of subscriptions to these online channels. In fact, not a single one of the streaming platforms maintained its price. Apple TV raised its price from $4.99 to $6.99 a month, while Netflix, HBO Max, and Disney Plus raised their prices by $4, $5, and $3 a month respectively over the last few years.
The bad patch in the advertising market did not help either. All of this contributed to the Hollywood market experiencing its worst year in decades. MoffettNathanson media analyst Michael Nathanson said: "It’s been a perfect storm of bad news. I’ve been covering this sector a long time and I’ve never seen such a bad collection of data points before."
The data does not improve even when analyzing each company separately. Walt Disney Company is down 45%; Paramount Global, 42%; Netflix, 52%; and, Warner Brother Discovery lost 63% of its shares in 2022.
