Oxstones Investment Club™Before the Internet, fantasy sports was an uncharted and unglamorous, paper-and-pencil and snail-mail entity — many leaps and bounds from the highly profitable enterprise that is now counted among the fastest growing industries fantasy sports in the world.
Today, drafting and managing fantasy teams of real-life professional ball players is big business, $1.2 billion to be exact. Fantasy sports service firms develop software and online platforms that have taken the activity from tight-knit social circles to literally any sports fan in the universe with an Internet connection. Since 2003, the industry has reaped an “explosive” 240 percent rate of growth and, as content continues to accommodate mobile devices, the forecasted 13.1 percent rise through 2018 should stay right on track.
With a far wider selection available on websites that offer crisp, zoomable color photos, slipping away is the consumer’s need to actually sit in a chair before buying it. Sure, shoppers still visit the Ashley Furniture store, IKEA, and Pottery Barn (WSM), but the new wave of home goods and decor is happening exclusively online and also in the emerging market of curated flash sales sites such as Joss & Main, which promise below-retail pricing and have mobile apps built into their business models. This year, online furniture revenue will climb to over $7.5 billion and the industry will have experienced annualized growth of 13.8 percent between 2008 and 2018.
An obvious beneficiary of the e-commerce boom are developers of online payment processing software that make electronic financial transactions possible. No single firm has emerged as a heavy hitter in this fragmented market, though the largest player, PayPal (EBAY), claimed 24.2 percent of the industry’s total bottom line in 2012. This makes an interesting open season of the next five years of market growth; in that time, the industry is expected to see a 17.2 percent increase in revenue per year.
Investors who blazed the trail in the social media sector by snapping up shares of Facebook on the first day of trading are now being rewarded for their pioneer spirit. The long wait to see the stock rise above $45 is over.
In the black and on the climb, Facebook seems to have sorted out its once-iffy mobile strategy. The company’s second-quarter earnings report — touted by experts as a huge turning point — showed 800 million users accessing the social network on a smartphone or tablet, and mobile ad sales accounting for 41 percent of total ad revenue.
Meanwhile, Twitter’s (TWTR) IPO created 1,600 new millionaires — though, mostly, of its workforce.
Over the past decade, social networking sites recorded 74.4 percent annualized growth with 2103’s revenue nearing $6.6 billion. The next five years will find the industry gaining another 25 percent through 2018 as it continues to test and prove monetization schemes. And though Facebook and Twitter currently dominate the social networking space, the wealth is spreading to a number of publicly traded companies like LinkedIn,Mediabistro (MBIS), Renren Inc. (RENN), Sina (SINA), MeetMe (MEET), and Vringo (VRNG).
The term “out of print” is beginning to take on new meaning. Though a bit hyperbolic, it’s been said that a couple of generations from now, people won’t know what a book is.
The $6.8 billion e-book market certainly seems to speak to a paperless future. Many book publishers are now catering exclusively to the on-the-go reader by producing digital-only versions of some titles. The recent merger of publishing powerhouses Penguin and Random House will likely propel the company to the top of the e-book industry and let it reap a large share of the 88.3 percent revenue growth, annualized between 2008 and 2018.
Not quite hanging in, but rather, hanging on, is the newspaper industry.
While there’s still a crop of news consumers that will never give up the smell of newsprint and the feel of holding a paper in their laps, they are a dying crop. The business model that made corporate behemoths of The Wall Street Journal (NWS), The New York Times (NYT), and USA Today (GCI) is struggling to support the media sources in print as Generation X and beyond are increasingly reading (and watching) news via digital outlets.
Paywall systems and ancillary mobile platforms have only slowed the bleeding; the newspaper-publishing industry is expected to follow the declining revenue path of the past five years and drop by an annualized rate of 3.7 percent to $27.7 billion through 2018.
Maybe Jeff Bezos, who purchased The Washington Post earlier this year, knows something the rest of us don’t.
One of the casualties of Bill Clinton’s NAFTA, apparel manufacturing has become a barely visible category in the US. And its long decline has turned this country’s once-humming clothing mills into boarded up and abandoned real estate.
A peek at the tag on the shirt you’re wearing will tell you it came from China or Bangladesh where — even after rampant and fatal factory accidents — Western safety standards are still not enforced.
At the top of the supply chain it’s a far rosier picture. US manufacturers like Wal-Mart (WMT) and Gap(GPS) enjoy a $19 billion garment industry boosted tremendously by the low cost of doing business overseas.
An exception to the dismal forecast — that has industry revenue falling at an annualized rate of 3.1 percent to $412.0 million through 2018 — is the outlook for domestic operators catering to niche markets that demand higher quality knits. These manufacturers, along with ones that can incorporate designing and marketing activities, may be poised for growth.
If you thought the state of manufacturing during the Great Depression was rough, feast your eyes on these figures: America lost 5.7 million manufacturing jobs between 2010-2012, and the decline as a share of total manufacturing jobs (33 percent) exceeded the rate of loss from 1929-1933. Never in US history has this industry suffered more job loss than over the past decade.
Singled out among the worst of the worst is the appliance-manufacturing sector. The many whammies this category has endured include the rising costs of steel, plastic, and resin; weak sales from recession-hit consumers; the overseas outsourcing of labor; and increased demand for imports. (The demand for appliances made abroad is expected to reach a staggering 47.5 percent of total demand by 2018.)
US appliance manufacturing certainly has a lot working against its success, but a couple of silver linings will actually allow the industry annualized growth of 2.8 percent to $17.7 billion over the next five years — namely, a recovering housing market and product releases of highly popular, energy-efficient models.
The phasing out of the independent repairer isn’t just a simple matter of the big-box shops like Home Depot (HD) and Best Buy (BBY) bundling service warranties into appliance purchases.
Ironically, the appliance manufacturers themselves have just as much to do with the shuttering of the mom-and-pop shop by not only writing those warranties, but making products that don’t break — or at least not as often. When something does go wrong, built-in diagnostic tools empower owners to make fixes themselves and, as an added bonus, make their cable TV lineup of DIY shows finally relevant.
More zeroes in the (post-recession) bank account is also starting to allow consumers to splurge on shiny new replacements rather than repair old ones.
This all bodes badly for the appliance-repair industry, headed for a fall of an annualized 1.5 percent to $3.4 billion through 2018.
Going the way of the floppy disk’s recycled existence as an ironic art statement is the recordable CD and DVD. Our state-of-the-art lives now revolve around clutter-free content — whether we’re watching videos on YouTube (GOOG), streaming movies from Netflix (NFLX), tuning into Internet radio on Pandora (P), or listening to digital music files on the now-seemingly-ancient Apple’s (AAPL) iTunes.
In addition, as conventional businesses are increasingly turning to cloud computing for IT services, so goes the need for physical software.
The film industry is recordable media’s last hope since studios continue to profit heavily from movie sales in DVD format. In particular, 3-D films, with file sizes too large to stream, will help drive demand for the optical disc.
Still, Hollywood alone can’t stop the industry’s five-year projected freefall of 3.9 percent to $3.2 billion.
It will take a new runway rage of these beauties to keep recordable media from the brink. Ah, but who are we kidding? They’d be manufactured in China anyway.
http://money.msn.com/investing/c_galleryregular.aspx?cp-documentid=253189319
Tags: Apple iTunes., Ashley Furniture store, Best Buy (BBY), e-book market, e-book publishers, facebook, fantasy sports, Gap (GPS), growing industries, Home Depot (HD), IKEA, Joss & Main, linkedin, Mediabistro (MBIS), MeetMe (MEET), Netflix (NFLX), newspaper industry, online furniture, online payment processing, Pandora (P), PayPal, recordable CDs/DVDs, Renren Inc. (RENN), Sina (SINA), social networking websites, The New York Times (NYT), The Wall Street Journal (NWS), twitter, US appliance manufacturing, US clothing manufacturing, USA Today (GCI), Vringo (VRNG), Wal-Mart (WMT), YouTube (GOOG)