Another takeaway: Comcast said paid cable subscribers dipped by just 4,000 between April and August — the smallest loss in more than a decade. By contrast, Netflix added just 1.7 million subscribers during the same period, far short of its own forecast of 2.5 million. "The OTT services seem to be slowing," says Steven Birenberg of Northlake Capital Management. "It seems skinny bundles from established distributors in cable, satellite and telco are having more impact than cord-cutting."
This is a somewhat remarkable turnaround given the media meltdown triggered when Disney CEO Bob Iger said Aug. 4, 2015, that powerhouse ESPN was shedding subscribers. Analysts interpreted that to mean cable TV was imploding and punished media stocks with double-digit percentage drops across the board.
But now, analysts say Wall Street is judging each company on its own merits. "You have to show something clearly good for your stock to work — better HBO [numbers] at Time Warner, for example — or else you are in the penalty box," says Birenberg. THR takes a look at what the conglomerates have done to right their ships:
The Walt Disney Co.
Disney has been knocking it out of the park since the year-ago swoon (outside of a few film flops like The BFG and Alice Through the Looking Glass). Star Wars: The Force Awakens, The Jungle Book, Finding Dory and Captain America: Civil War
more than made up for the misses. Its Aug. 9 earnings report indicated
another (undisclosed) number of subscribers lost at ESPN but it still
eked out higher revenue on rising affiliate fees. On the digital front,
Disney paid $1 billion for a one-third stake in BAMTech, Major League
Baseball's digital unit that provides streaming video to HBO Now, the
WWE Network, ABC/ESPN and CBS Sports. As part of the deal, Disney plans
to launch a new ESPN-branded streaming service (but offered no specific
details). The latest digital push comes after Disney invested $400
million in Vice Media in 2015, showing Iger's emphasis on positioning
his networks for the OTT future.
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Time Warner
The company spent much of the past year beefing up its digital offerings, including revealing Aug. 3 that it purchased a 10 percent stake in Hulu for $583 million. TBS, TNT, CNN, Cartoon Network and more not only will make their shows available on-demand but also in real time when Hulu launches its live-TV service in 2017. Streaming service HBO Now already has led to a 2 percent revenue gain at the network. Warner Bros. was a laggard (it hasn't released a billion-dollar grosser since the first Hobbit in 2012), but execs believe Suicide Squad's box-office returns will help fix that.
Comcast
The cable giant
and its NBCUniversal segment have been doing well, except its movie
business has fallen behind a record 2015 with titles like Warcraft and The Huntsman: Winter's War.
NBCU is betting its deal to buy DreamWorks Animation for $3.8 billion
will bolster the film side. The company also continued to invest in
digital content during the year, sinking $200 million each into BuzzFeed
and Vox. And NBCU CEO Steve Burke hailed strong upfront ad sales and
told analysts he expects "a very profitable Olympics."
Viacom
It's impossible
to separate Viacom's financial performance from the drama in its
boardroom, where founder Sumner Redstone and his allies are trying to
oust CEO Philippe Dauman (who is pursuing a sale of a stake in
Paramount). Viacom's TV ad and movie businesses are ailing, leading to a
27 percent drop in profits this quarter, but there are pockets of
strength on the TV side, including improvements in international ratings
and revenue. Though films like the latest Teenage Mutant Ninja Turtles disappointed, home entertainment sales have been a surprising boon.
CBS
CEO Leslie Moonves can't stop talking about Star Trek.
Hype for the new show developed specifically for VOD service CBS All
Access has reached a fever pitch. Moonves told analysts July 28 that the
show already was profitable before production began because Netflix had
licensed it in foreign markets and other entities. In June, CBS
unveiled Showtime OTT to compete with HBO Now, and Moonves said All
Access and Showtime have about 1 million subscribers apiece.
21st Century Fox
CEO James Murdoch
told analysts Aug. 3 that it was "clear we have work to do at the film
studio," which will replace chief Jim Gianopulos with Stacey Snider next
year. The company blamed weak earnings on costs associated with X-Men: Apocalypse, Independence Day: Resurgence and Ice Age: Collision Course.
Though Fox News is dealing with widening fallout from the ouster of
founder Roger Ailes, co-executive chairman Lachlan Murdoch said the
network "is on track to have its highest-rated year ever."
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Sony
The biggest laggard of all the studios, Japan-based Sony booked another loss during the most recent quarter: a disastrous $103 million. That's before the money-losing Ghostbusters. Some woes are due to a strong yen, which blunted gains from The Angry Birds Movie and growing TV ad sales in India and South America. Sony Pictures should fare better in the second half of 2016 with The Magnificent Seven remake and Dan Brown's Inferno — though, as this year has shown, no movie is a sure thing.
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