More Drama Next Time Media Companies Report Financial Results -- And The Next?

Remember the last financial report for Walt Disney back in August, which noted there could be some dramatic declines in ESPN subscribers?

Yeah, that one -- which had a major crushing effect on media stocks.

Then on Wednesday, Time Warner offered up some dramatically lower profit estimates. Time Warner and Viacom each lost around 7% that day,  with 21st Century Fox slipping over 5%.

Additionally, deep inside Time Warner’s financial report  was a noted drop in Turner Broadcasting subscribers, which caused major concerns among some analysts. Time Warner also said it was pulling back on TV programming deals made with the likes of Netflix, Amazon, and Hulu — all to promote its own digital video platform efforts such as HBO Now.

If you believe that the TV ecosystem has dramatically changed, then you might need to brace yourself for more reports of fewer pay TV subscribers. This factor — perhaps more than sometimes-lackluster TV ad revenues -- will make the real difference.



For a long time subscriber revenue has been the buffer, countering the ups and downs of national TV advertising revenues. Broadcast networks looked with envy at cable networks because of their “dual revenue” advertising/affiliate fee revenue stream. Now broadcast networks also have this profit stream, with retransmission revenue.

This brings us to CBS. This company will continue to stick out from the rest, seeing at least near-term upside results from its retransmission revenue, getting to over $1 billion in 2016. CBS, as compared to other big media, continues to have lower exposure to the whims of the cable TV market.

Maybe we don’t have to wait until the next dramatic release of quarterly results. In the meantime, Time Warner stock lost another 4% on Thursday, the day after it released its third quarter results, with Viacom down 2.5% on the day.

What about Walt Disney -- the company that seemed to start the whole shebang? On Thursday, its stock was down a little -- 0.2% -- to $113.00, with after-market trading up about the same level.

Seems quiet? Expect more stirring episodes to come.

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