Monday, November 9, 2015

Report: Media Stocks Are In For A Rude Awakening

Media investors breathed a sigh of relief last week after Walt Disney CEO Bob Iger assuaged industry concerns about the rate of consumers dropping premium subscription channel cable packages — otherwise known as cord cutting — on the company earnings call.

However, according to one widely followed analyst, those concerns should not be put on the back burner as media stocks are in for a rude awakening.

"There is a seismic change in consumer behavior that is affecting the entire media sector," said BTIG's Rich Greenfield on CNBC's  "Fast Money" last week.

"Consumers are not dumb. They're making decisions and more of them are cutting or shaving the cord, and it's affecting every one of these companies in the sector," he said.

Many of the cable companies have explored streaming options to combat fleeting young viewership — but Greenfield says the problem exists in content.

"The whole industry needs to reorient itself — invest heavily in great, must-watch programming, and build the technology to go direct to consumer and support customer care," said Greenfield.

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