Midtown Blogger/Manhattan Valley Follies: Media Stocks Plunge AP

Thursday, August 6, 2015

Media Stocks Plunge AP

Media stocks slammed as pay TV bundle starts unravelling

The Associated Press - By By RYAN NAKASHIMA - AP Business Writer

53 minutes ago

FILE- In this Jan. 5, 2015 file photo, Joe Clayton, president and CEO of Dish Network, introduces the Sling TV, a live television streaming service, at a news conference at the International CES in Las Vegas. Dish said its satellite TV subscriber losses accelerated in the quarter through June, falling 81,000 to 13.9 million, nearly double the loss of 44,000 a year ago. Analysts say that popular channels like ESPN would likely survive any dramatic shift in consumer preference toward online channel packages like Sling TV, which at $20 a month, is far cheaper than traditional pay TV packages. (AP Photo/Jae C. Hong, File)

LOS ANGELES (AP) — Signs that pay TV's pricy bundles of channels are starting to unravel are starting to take a toll on major media companies.

Media stocks were hammered for a second day Thursday as Viacom's underwhelming earnings gave investors another reason to sell, after industry bellwether Disney earlier in the week trimmed a profit outlook due to more people cutting the cord on pay-TV packages.

While there have long been signs consumers love online video distributors like Netflix, Hulu and Amazon, it's the first time that signs of trouble for the traditional cable and satellite TV business have sent such a powerful shudder through the stock market.

Disney's stock is down 14 percent since Tuesday, when it reported that it was trimming its forecast for TV subscriber-fee profit growth through next year because of subscriber losses at its flagship ESPN sports network.

Over two days, Viacom is down 22 percent, Time Warner is off 13 percent, CBS has shed 7 percent and Discovery Communications is down 11 percent. Twenty-First Century Fox is down nearly 13 percent.

"Questions around the death of pay TV are now front and center even if the size and pace of declines are likely being overstated by press and Street commentary," wrote analyst Michael Nathanson of MoffettNathanson Research.

Dish said Wednesday its satellite TV subscriber losses accelerated in the quarter through June, falling 81,000 to 13.9 million, nearly double the loss of 44,000 a year ago.

Viacom Inc., which owns Comedy Central and Nickelodeon, reported Thursday that its profit fell in the most recent quarter. While that is largely due to a lack of big films this year, there have been questions about how it will handle a shift in how people consume media. Its shares have fallen 41 percent this year.

"There is no question that our industry is in the midst of significant change," Viacom CEO Philippe Dauman told investors Thursday.

2015 The Associated Press

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