Media behemoth, The Walt Disney Company (DIS - Analyst Report) grabbed all the attention in 2015 with big box office hits like Avengers: Age of Ultron, Ant-Man, Inside Out and Cinderella. And to top it all, Disney’s Star Wars franchise returned to the theaters after a decade with Star Wars: The Force Awakens to give a fitting end to a spectacular year.

Dream Year for Disney’s Movie Business

Disney tasted repeated success at the box office raking in more than $5 billion in 2015. Luck seems to be on its side with the company striking gold at the box office with almost every movie released over the last couple of years. In 2015, it came up with hits like Avengers: Age of Ultron, Marvel's Ant-Man, Inside Out, Cinderella and Star Wars: The Force Awakens.

Looking at Avengers: Age of Ultron’s box office numbers, the movie has earned $458.9 million in the U.S. and $946 million from the overseas market. The total collection of this movie, which was made on a budget of $279.9 million, has crossed $1.4 billion globally.

Made at a budget of approximately $175 million, Inside Out released in June also did fabulous business and earned more than $800 million globally. Cinderella, released in March, had a budget of $95 million and also did sound business with a total box office haul of over $542 million out of which $201.1 million came from the domestic market and $341.4 million was earned internationally. Paul Rudd starrer Ant-Man, which hit the box office in July, collected nearly $410 million globally.

In December, the company released its much awaited flick – Star Wars: The Force Awakens. The movie is flying high at the box office, with its worldwide collection crossing the $1 billion mark. And this feat was achieved in the first 12 days of release beating "Jurassic World," which had crossed the figure in 13 days. In the opening weekend, the movie shattered box office records with a massive collection of $517 million worldwide.

Why Didn’t Disney’s Share Price Show the Same Magic?

Despite Disney’s massive box office numbers it failed to give the desired impetus to the stock. What was pulling back the company was its Cable Networks division, especially the ESPN network. As of Dec 30, 2015, Disney shares have increased 13.7%. As of Nov 25, 2015, the company’s share price was up 26%.

The company’s stock lost momentum after its SEC filing revealed that ESPN, one of the primary revenue and margin drivers, has been losing subscribers pretty regularly. ESPN has lost nearly 7 million subscribers in the last two years as the number of cord cutters continues to rise. At the end of the fourth quarter of fiscal 2015, ESPN had a subscriber base of 92 million in comparison to 95 million at the end of the prior-year quarter. More than the year-over-year shortfall what was more alarming was that the subscriber base was a regression to the prior decade level.

For some time now ESPN, which was once Disney’s primary cash cow, has come under immense pressure as the Pay TV landscape sees continuous migration of subscribers to online TV. Falling subscriptions will have a telling effect on the network’s ad revenues.

Notably, a large chunk of media companies’ revenues comes from affiliate fees paid by Pay-TV providers to carry their channels and is calculated on a per-subscriber basis. With the majority of Pay-TV operators gradually losing their subscribers, a contagion effect can be seen on media companies’ revenue growth from affiliate fees, which is going considerably downhill. Also, with their subscriber base already dwindling, the media companies are now no longer in a position to charge higher programming costs from Pay-TV operators.

As per several analysts, weakness has persisted in the TV ad market for some time and subscriber loss has been on the rise but the effect of the same wasn’t felt so strongly by the traditional media companies as it is seen now.

5 Stocks that Beat the Media Bellwether

You will be surprised to know that there were a few other stocks in the media industry which have even outperformed Disney in 2015. We have identified five stocks which have surpassed Disney in 2015.

Shares of World Wrestling Entertainment Inc. (WWE - Analyst Report), an integrated media and entertainment company, have skyrocketed more than 51% in 2015. In the long haul, this Zacks Rank #3 (Hold) company will continue banking on its content distribution agreements. During 2014, the company confirmed its television distribution agreements in the U.S., the U.K., India, Thailand, Canada, UAE and Mexico. Management expects contractual increase of television rights fees as well as the acquisition and retention of WWE Network subscribers to be the primary growth driver in 2016 and beyond. Revenue growth of more than $100 million from these distribution agreements is above the company’s total revenue growth over the past four years.

As of Dec 29, 2015, shares of DreamWorks Animation SKG Inc. (DWA - Analyst Report), a developer and producer of feature films, television specials and live entertainments have increased more than 19%. DreamWorks has taken several steps to improvise on the film making process to significantly cut down production costs. In the third quarter of 2015, the company witnessed 43% year-over year growth in revenues. The upside in revenues was mainly buoyed by growth across all operating segments. Notably, this Zacks Rank #3 (Hold) company has surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average earnings beat of 82.6%.

AMC Networks Inc. (AMCX - Snapshot Report), which sports a Zacks Rank #1 (Strong Buy), has shown great potential. The value of the company which owns and operates various cable televisions brands has increased more than 20.8% in 2015. The share price appreciation was primarily a result of better-than-expected earnings reported by the company in the trailing four quarters, with an average earnings surprise of 19.3%.

Shares of Entravision Communications Corporation (EVC - Snapshot Report), which operates as a diversified media company in the U.S. as well as in the border markets of Mexico, have gained 16.5% till Dec 29, 2015. The company has surpassed the Zacks Consensus Estimate in two of the past four quarters, with an average earnings beat of 26.9%.

Shares of IMAX Corporation (IMAX - Analyst Report), a leading global entertainment technology company, have increased 18.3% year to date. IMAX theaters witnessed huge box-office success in 2015. Apart from Star Wars, Universal Pictures’ Jurassic World and Furious 7 were successful releases. Also Marvel’s Avengers: Age of Ultron generated considerable revenues. This Zacks Rank #3 (Hold) company’s movie business is also gearing up for a grand 2016 with some big films lined up for release like Marvel’s Civil War and X-Men: Apocalypse Now and DC Comics’ Batman v Superman: Dawn of Justice.

Summing Up

Without any doubt Disney is one of the largest media conglomerates and the studio’s success story will go far beyond Star Wars as it boasts an impressive lineup of big budget movies. The success of its movies will also mean great business for its Consumer Products division, as demand for associated merchandise usually skyrockets as seen in the case of Frozen. Addition of popular themes to Parks and Resorts is also likely to increase footfall.

But beyond Disney there are other media stocks that also merit attention. The stocks discussed above speak of their potential and their addition to your portfolio will not be a disappointment in the long run.