The Walt Disney Company (DIS), Time Warner Inc (TWX): What’s New In This Space?

Netflix and Disney have already inked an exclusive deal, that doesn’t include Lucas content. More such deals are clearly on the way. Although The Walt Disney Company (NYSE:DIS) shares are expensive, the company is among the largest and best positioned content owners in the media industry. Keep it on your watch list.

More is Better

The rumor of a deal between Time Warner Inc (NYSE:TWX) and CBS, put against this backdrop, makes complete sense. CBS is among the leading networks and Time Warner has a treasure trove of content. The pairing would look a lot like Disney, which owns ABC and key cable assets like ESPN and The Disney Channel. No wonder the shares of CBS and Time Warner both went up on the news. Normally, the purchaser’s shares would have fallen.

Time Warner Inc (NYSE:TWX) shares, while trading higher of late, have been range bound for about a decade. That means that this could be an opportunity to buy in before they push above that range. Buying CBS Corporation (NYSE:CBS) could be just the impetus needed to break through the ceiling. CBS shares, on the other hand, are at all-time highs, making them somewhat less appealing.

Good Even Without the Web

Bulking up, however, is good business even without the Internet. For example, there is a constant struggle between media owners and those that distribute content, like cable companies and television stations. The better content one has, the higher the prices that can be charged.

Essentially, this is the same dynamic that is playing out on the Internet. So, the moves to bulk up are good all around. Investors should keep an eye on the media space and this trend. The Walt Disney Company (NYSE:DIS) seems well positioned and should be on every investor’s watch list for a pull back.

Time Warner Inc (NYSE:TWX), meanwhile, could be at an important turning point in its re-positioning efforts. That could make now a good time to buy in for more aggressive investors.

The article The Media Bulk Up originally appeared on Fool.com and is written by Reuben Brewer.

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