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Are Media Companies Charging Streaming Services Enough?

 

In early August, lower than expected subscriber numbers at ESPN caused Disney to lower its forecast for cable operating income growth.  We then witnessed almost $50 billion being wiped off the combined value of the biggest TV content producers, including Disney, Time Warner, Fox, CBS, Viacom, and Discovery Communications. The Dow Jones U.S. Broadcasting and Entertainment Index continued to fall, ending 15% down from the beginning of the month.

The concern on Wall Street is that increasing numbers of subscribers are ‘“cord-cutting” – abandoning cable altogether or opting for slimmer channel packages in favor of subscription video-on-demand (SVOD) platforms such as Netflix, Amazon Prime and Hulu Plus. Investors also are worried that media companies aren’t earning enough from VOD services to compensate. Reliable measurement of those platforms is needed to determine whether that’s true.

Read the entire story here.

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