Jan. 5, 2011
/PRNewswire/ -- Against the cross-currents from new technologies and an increasingly uncharted regulatory backdrop, change was about the only constant for the Media sector in 2010. But with an improving economic outlook providing another area of support, S&P Equity Research believes the sector seems poised to weather lingering challenges and turn in another strong year in 2011.
With this in mind Tuna Amobi, Media & Entertainment Analyst at S&P Equity Research, provides the following 2011 Media Predictions.
1. We expect News Corp. (NYSE: NWS 17 ****) (NYSE: NWSA 15 ****) to ultimately prevail in its bid for majority ownership of BSkyB (despite stiff U.K. regulatory hurdles). Separately, we expect the company to take steps to cede control of MySpace, with
and company cutting losses, as the site has never gained real traction in a re-invention as a social entertainment hub.
2. We see interactive advertising making relatively large quantum leaps in addressability and measurement, as cable operators such as Cablevision (NYSE: CVC 34 ****), Comcast (NNM: CMCSA 22 ***) (NNM: CMCSK 21 ***), and Time Warner Cable (NYSE: TWC 67 ***) finally begin to leverage underlying technology advancements that have nurtured a new revenue stream from a likely growing base of EBIF-enabled U.S. households.
3. We expect one or more film studios - likely this time from the ranks of independents - to sign relatively long-term streaming rights deal(s) with Netflix (NNM: NFLX 181 **), which should also significantly expand its TV licensing pacts with the studios (for both current and prior season episodes) under incrementally shortened windows.
4. We think some of the largest cable operators will face renewed speed bumps over wireless strategies, as the WiMAX JV led by Sprint (NYSE: S 4****) and Clearwire (NNM: CLWR 5 NR) further unravels, while the JV's cable partners hesitate to make further financial commitments and slow the pace of deployment (as LTE begins to take flight among rival 4G technologies).