Media stocks on Wall Street fell heavily last week leading the major US indices to all post declines for Friday's session. Leading the charge lower were media stocks including Walt Disney and Rupert Murdoch's Twenty-First Century Fox.
A weak earnings result posted by Walt Disney led investors to question the outlook for 'old world' media companies in the face of growing popularity for online streaming services such as Netflix.
The action on Wall Street has caused leading media stocks such as Walt Disney and Viacom to fall 9.5% and 22% respectively in the past week. The moves could potentially be a harbinger for local media stocks, although arguably domestic investors have already recognised the structural changes facing the industry already.
There are no less than five ASX-listed stocks which offer free-to-air television services that are facing revenue and earnings pressure as online content alternatives capture an increasing amount of viewer attention. These five stocks are:
- Seven West Media Ltd (ASX: SWM)
- Nine Entertainment Co Holdings Ltd (ASX: NEC)
- Ten Network Holdings Limited (ASX: TEN)
- Southern Cross Media Group Ltd (ASX: SXL)
- Prime Media Group Limited (ASX: PRT)
Highlighting that Australian investors appear to already be well attuned to the structural challenges faced by television networks is the fact that all five of the above stocks are already trading near their 52-week lows, which in many cases also represent multi-year lows.
Importantly, even leading pay television company Foxtel, which is jointly owned by Telstra Corporation Ltd (ASX: TLS) and News Corp (ASX: NWS) does not look to be a safe haven, as the operator faces increased competition from the likes of Netflix as well.
