This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Big Media Is Doing Just Fine, Thank You

NEW YORK ( TheStreet) -- Old Media just keeps chugging along.

Facebook (FB), Twitter and Reddit, the young and sexy online platforms fast replacing traditional forms of communications (including talking to a friend while walking down the street together), continue to dominate media industry headlines. But the old line "content producers" have been the ones generating the profits.

Time Warner Inc. (TWX - Get Report), which reports its first-quarter numbers before the market opens in New York on Wednesday, has gained 61% in the past 12 months, 26% since the beginning of the year. Viacom (VIAB - Get Report), owner of Nickelodeon, MTV and Paramount Pictures, has gained 39% over the past year and 22% in 2013. Investors have liked what they've seen. Viacom also reports Wednesday morning.

Tuna Amobi, the media analyst at S&P Capital IQ, points out that Time Warner, Viacom and CBS (CBS - Get Report), which reports at the end of trading on Wednesday, have thus far been able to make money selling access to their content to Netflix (NFLX), Amazon (AMZN) and Hulu while simultaneously winning increased retransmission fees from cable/satellite operators and regional television affiliates.

These companies, Amobi says, have been able to gradually mix traditional advertising with video-on-demand sales and digital advertising. CBS has trimmed its dependence on advertising revenue, which last year comprised 60% of the company's $14 billion in sales, a drop from 65% in 2010.

"The media sector has been on a tear coming out of the worst years of the recession," Amobi said. "The nascent revenue streams are starting to accelerate, and investors like that."

Time Warner has been enjoying the additional catalyst of its impending spin-off of Time Inc., the largest U.S. magazine publisher, a split that the company has said will take place toward the end of 2013. CBS, likewise, has been bolstered by CEO Leslie Moonves's plan to convert the company's U.S. outdoor advertising division into a real estate investment trust and sell the international parts of that business. CBS is expected to use the proceeds from those transactions to fund further stock repurchases.

As a result, analysts are expecting Time Warner and CBS to show double-digit earnings growth for the first quarter while Viacom, harder hit by the downturn in traditional advertising, is forecast to report a 3% drop in earnings, according to data compiled by Bloomberg. Time Warner is also growing its international sales, as evidenced by increasing sales from HBO Latin America, and Viacom's Paramount channels with pay-TV operators globally.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CBS $61.59 0.00%
DIS $110.26 0.00%
NWSA $15.54 0.00%
VIAB $66.80 0.00%
TWX $85.20 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs