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.
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.”