MoffettNathanson Research estimates revenue from Warner Bros. Discovery's live, linear cable TV networks will decline 13% in 2024 to $20.1 billion, while AMC Networks will dip 21% lower to $2.4
billion.
Four of the five legacy media companies were down in advertising results in the first and second quarter of this year.
"Programmers have continued to impose and enforce strict bundling requirements through exorbitant minimum penetration rates," writes DirecTV Chief Content Officer Rob Thun.
WBD is participating in assorted bundling partnerships and entertainment bundling. With all these deals, Zaslav believes WBD is at the forefront of where streaming is headed.
Former Canoe Ventures CEO David Porter has been hired as head of ad sales research, data, and insights of Warner Bros. Discovery.
A sale of Paramount Global to any big legacy TV-based media or digital-first company is an uncertain situation, Bernstein Research says. "Without a clear buyer/structure, the outcome is still up in
the air," writes Bernstein media analyst Laurent Yoon. "It could limp along for a while and requires a risk-taker with a lot of money to burn."
A WBD-Paramount Global merger would initially result in dominance in two legacy entertainment measures: Linear TV viewing time and theatrical box-office revenue. MoffettNathanson Research says the
initial combination of the companies would result in a 35%-40% share of linear TV time depending on the season for viewers ages 2 and up.
TV network groups with 15 to 20 channels might have good reason to be concerned about their next negotiations with legacy pay TV services.
Guggenheim Securities estimates a 6.8% drop in revenue for Q4 after a 10.4% decline in Q3 - but media analyst Michael Morris says to "expect more meaningful improvement in the fourth quarter as the
company benefits from the upfronts."
Affiliate-fee revenues as a percentage of total company revenue is highest for Fox Corp. followed by NBCU, Warner Bros. Discovery and Paramount Global, MoffettNathanson says.
Peacock led all streamers in monetizing per hour of streaming viewing, in terms of ad and subscription revenue, according to MoffettNathanson Research. But Peacock and other streamers are still far
behind when it comes to monetizing viewing from their linear TV viewing.
MoffettNathanson forecasts NBCU and Warner Bros. Discovery will see declines in content spending this year while others will climb. Walt Disney will lead all big media companies, followed by NBCU,
Warner Bros Discovery, Paramount and Netflix.
"The advertising environment is challenged as supply chain disruptions have restricted inventory for products leading to lower advertising spend in areas," writes KeyBanc's equity research team.
The biggest moves will come with realignment as Jon Diament, Karen Grinthal and Greg Regis divide responsibilities among the company's more than 20 cable TV networks. Reports last month suggested the
new Warner Bros. Discovery would cut around 30% of its ad force as part of the goal CEO David Zaslav outlined to investors, to achieve $3 billion in synergistic savings as a result of the merger.
Signaling a wider macro-view of a possible slowdown in advertising, traditional TV-based media companies' stock prices declined sharply after Snap said on Tuesday it is seeing a sharp deceleration of
its digital ad revenues. MoffettNathanson Research senior research analyst/co-founder Michael Nathanson says there are some concerns that Q2 may end a bit soft. Many companies sank to new 52-week
lows.