After four days without electricity in Seattle following a historic windstorm, I feel qualified to reveal the one power-required activity that is essential to modern life. It's not light; candles did the trick. It's not heat; a wood fire and quilts worked fine. It's not phone service; cell phones with three-day battery life kept us in touch. No, the one irreplaceable miracle of powered life we truly missed -- even while playing board games by firelight with the kids -- was our digital video recorder. Eighty-four hours without being able to time-shift a single show, are you kidding me? Thankfully, by sheer luck, Lost, 24 and Prison Break were all on winter hiatus. What this episode of Powerless in Seattle illustrates is how dependent many consumers have become on enjoying filmed entertainment in their homes with souped-up plasma TVs and speaker systems. Back in September, I
In DemandNow I would like to take this one step further and contend that one of the most profitable entertainment trends of 2007 is likely to be the long-delayed and much-anticipated arrival of video-on-demand, or VOD, as a major source of income for major motion picture makers.
Piece of the Video PieDistribution of video-on-demand through cable and broadband networks emerged as a $1.1 billion business this year, and industry experts estimate it will grow 35% annually into a $5 billion business by 2012, taking market share away from DVD retailers and intensifying carriers' ambition to bid for the best shows.
Two Years, 20%I think you make a lot of money over at least the next two years by betting on the stocks of content providers like Viacom, Disney, Lions Gate, Time Warner and Marvel. Look for the shares of each to advance at least 20% over the next 18 months. My favorites are Lions Gate, Disney and Viacom.
|Video-on-Demand Stocks |
|12/19 price||Market cap|
|Lions Gate Entertainment||$10.47||$1.1 billion|
|Walt Disney||$34.85||$72 billion|
|NDS Group||$48.03||$2.7 billion|
|Marvel Entertainment||$27.42||$2.2 billion|
|Time Warner||$21.92||$87 billion|