Media Stocks Drop, Increasing Pay TV Concerns

With the possibility of more TV entertainment disruption to come, major media stocks took some hits in early Wednesday morning trading.

Discovery Communications was down 4.6% to $23.17, after incurring some losses a week ago on the news of its planned purchase of Scripps Networks Interactive.

Analysts are concerned about pure cable-network groups finding homes for all their channels on new "skinny" digital TV network platforms.

Walt Disney fell nearly 4.5% following its weak quarterly earnings/revenue network results on Tuesday, to $102.22. The company also announced a number of streaming services to meet the challenge of the slowing traditional pay-TV market.

At the same time, Netflix lost 3% to $173.17, partly as a result of news that Disney would not be making another streaming distribution deal for some of its new films.

Viacom also took a hit -- down 3.6% to $29.67 -- while 21st Century Fox went down 2.0% to $27.45. Some of the better-performing companies included CBS -- losing 1% to $64.60 -- and Sinclair Broadcast Group, down 1.6% to $31.25.

Charter Communications was one of the few companies to show gains -- up 2.2% to $398.11. There is speculation that new cable operator Altice USA, a subsidiary of the French-based telecommunications company, is looking at Charter as a potential acquisition target.

The broader stock market indexes fared much better. The Dow Jones Industrial index slipped 0.3% to 22,016. The Nasdaq was down 0.6% to 6,334, and the S&P 500 lost 0.3% to 2,467.

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