Media Stocks Sink, Comcast Warns Of Subscriber Loss
- by Wayne Friedman , September 7, 2017
Concerns over accelerating cable TV subscriber losses sparked a steep sell-off of big media stocks.
During a Merrill Lynch media conference, Matthew Strauss, EVP of Xfinity services for Comcast, said the company expects to report a loss of 100,000 to 150,000 subscribers during the third quarter -- partly due to growing digital media services and the effects of Hurricane Harvey.
At the end of the day Thursday, Comcast stock sank 6.2% to $38.60.
Major TV network-based companies like Walt Disney also got hit. Disney was down 4.4% to $97.06 -- also due to the company’s own forecast. Disney’s warning: its 2017 earnings would be “roughly in line” with results of a year ago.
Other media companies were not spared: 21st Century Fox was down 2.4% to $25.79; CBS was off 2.1% to $60.50; Discovery Communications sank 2.4% to $21.34, AMC Network lost 2.9% to $57.14, and Viacom dipped 3.6% to $27.20.
Traditional pay TV providers -- cable, satellite and telco -- were also hit. Altice USA was down 3.4% to $29.25 and Dish Network lost 3.7% to $55.48. Charter fared the best, slipping just 1.7% to $395.64.
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Analysts believe that mounting concerns over cord-cutting and shifting digital media consumer behavior are now impacting some larger companies.
“You had little cracks in the pay TV firmament,” said Barton Crockett, media analyst at FBR Capital Markets, speaking with CNBC. “Comcast, which had been the most resilient cable company, growing subscribers, is now saying it sees some pressure.”
Crockett says that one big competitor in the digital space is a growing digital consumer brand. “YouTube TV is really accelerating their rollout... YouTube TV is something that is resonating with consumers, reflecting their interest in skinny bundles. You also have DirecTV Now and Hulu [live] TV package.”
I used to think it was just broadcast TV that was in deep trouble, but now it looks as though all linear TV is on the ropes. The over-40 crowd doesn't quite seem to get it, but the Millennials and post-Millennials simply don't watch as many "channels" -- which bodes ill for both local stations and cable competitors.
Douglas, as more and more channels/platforms offer content the average episode ratings per channel/platform must, of necessity, get smaller as the viewing pie is divided among more and more contenders. However, it has been shown time and time again that as more content becomes available the totality of consumption also rises---but not proportionate to the increase in the number of viewing options. As you probbaly know, the Nielsen tallies of the number of channels an average TV home "uses" per week, do not include non-linear TV/video uasge----which is a bit misleading. And we must also remember that the time frame is arbitrary. Over longer periods of time---a month, three months, etc.,--- most people sample many more channels/platforms than they do in a week. Nope, it's not the broadcast TV networks and stations plus cable that are "in trouble", it's all channels/platforms be they linear or digital that must face issues of audience fragmentation, subscriber "churn", etc. There are simply too many wannabie programmers and ad sellers of all types for the public to accommodate at the scales we were once used to.
Comcast will just find another way of adjusting consumer bills higher with more fees or higher rates on equipment.