Commentary

Sobering Wall Street Media Picture: Cord-Cutting Concerns Come To Market

by Wayne Friedman , Staff Writer, August 6, 2015

If you had any doubt where the marketplace was going, all you needed to do was look at Wall Street on Wednesday, when the traditional media faced off against newer media platforms.

Stock market trading of Walt Disney, 21st Century Fox, CBS., Comcast, and Time Warner stocks were down, from an eye-opening 5% to 11% -- all while Netflix was up 2.2% and Facebook gained 2.4%. Even Comcast, which has feet in both the old media (NBC) and the new (broadband), was hit with a 4.7% decline.

Other smaller media companies -- AMC Networks, Scripps Networks Interactive, and Sinclair Broadcast Group — also took it on the chin down 6% to 7%. Discovery Communications was down a big 12% toward the end of the day.

Some of this trend was kicked off by concerns for Disney over ESPN -- a big cable network revenue generator. It had seen slight losses in overall subscribers, which are still just south of 100 million.

On the same day, Dish Network released news that it had a net loss of 81,000 satellite subscribers. But that isn’t the complete picture.

MoffettNathanson Research estimates that when you factor in some cannibalization from regular Dish satellite customers switching to its “skinny” Sling TV digital package of TV channels, Dish could be seeing an actual massive net loss of 187,000 in traditional satellite TV subscribers.

To be sure it isn’t completely bad new. Dish is holding on to some of that revenue and consumers with the newer Sling TV.

Is this all about cord-cutting, a transformative TV business behavior? Surely, massive changes in media have been embedded in the market for sometime.

But one also needs to factor in the slowly changing TV advertising market, which is currently in a weakened state -- just up 1% or flat for major big TV-based media companies for their second quarter reporting periods.

It’s not that traditional media content providers are doing anything wrong. Many believe they are appropriately valued. But it’s the promise of the new and shiny that means media companies like Netflix and Facebook will pull older media in new directions -- whether they like it or not.

tv, wall street

6 comments about "Sobering Wall Street Media Picture: Cord-Cutting Concerns Come To Market".

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Ed Papazian from Media Dynamics Inc, August 7, 2015 at 8:21 a.m.
Wayne, in the interest of fair reporting, I would suggest that you provide the total subscription base as well as the gains or losses for, say, Dish Network, so readers can evaluate their relative size. For example, as I recall, Dish Network has something like 13.8 million subs. In this context, a loss of 187,000, while not a positive development, might not be considered a "massive" loss.
Reply

Wayne Friedman from MediaPost Communications, August 7, 2015 at 9:54 a.m.

Ed, you need to read more MediaPost. Perhaps you got that 13.8 million number in this story:
http://www.mediapost.com/publications/article/255548/dish-tv-subscribers-dip-revs-rise.html?edition=85047

Ed Papazian from Media Dynamics Inc, August 7, 2015 at 10:05 a.m.

Wayne, I think---but am not sure---that I saw that number, or thereabouts, on the WSJ website a while ago. In any event, whatever it is, the total subscriber base should also be noted in reports like this---just my opinion, of course.

Leonard Zachary from T___n__, August 7, 2015 at 12:21 p.m.

Ed do you lobby for the NAB?

Ed Papazian from Media Dynamics Inc, August 7, 2015 at 12:54 p.m.

Leonard, that's a funny one. Keep 'em coming.

Leonard Zachary from T___n__, August 7, 2015 at 2:21 p.m.

Ed you avoided the answer. The question stands.