TV Getting Less Static Over Third-Quarter Earnings

摘要

WALL STREET IS cautiously upbeat about the media industry as companies in the TV business get ready to release their earnings for the third quarter. What had been dark clouds over the industry now seem less threatening. Analysts are predicting that advertising revenue growth will be better than in the last few quarters. The pace of subscriber losses in the pay TV business has also moderated, which makes the trend in distribution revenues less dire. Some of the individual stories are also more positive, with Discovery getting traction with streaming distributors and the battle between The Walt Disney Co. and Comcast over 21st Century Fox's assets and Sky having been settled. "Based on our industry contacts and bottoms-up tracking, positive trends for media should include stable-to-improving total pay TV subscriber trends (traditional + virtual) for the fourth quarter in a row, U.S. TV advertising stable year-over-year again as the strong scatter market and digital efforts offset ratings declines, and cost-cutting efforts continue to deliver," Credit Suisse analyst Doug Mitchelson said in a recent report. "We expect international revenues will be hit by currency, though with little impact flowing through to bottom lines," Mitchelson wrote. "M&A and the pursuit of streaming will remain topical." As traditional TV's temperature improved to lukewarm, though, streaming giant Netflix was red hot after a third-quarter report showed better than suspected subscriber growth. Reed Hastings, CEO of traditional TV's chief nem- esis, insisted during Netflix's earnings call that it can continue to add subscribers and increase profit margins.