NEW YORK (TheStreet) -- Research firm Bernstein sees strong evidence that audiences of ad-supported TV have entered a period of "structural decline." The firm cut its rating on Discovery (DISCA) , the owner of the Discovery Channel and Animal Planet cable stations, and Viacom (VIA) , (VIAB) , which owns MTV and and Nickelodeon. The firm also cut its price target on CBS (CBS) .
WHAT'S NEW: Noting that audiences for ad-supported TV have fallen by unprecedented amounts for four months, Bernstein analyst Todd Juenger added that consumption of subscription video on demand, or SVOD, services continue to grow. Meanwhile, TV networks are seeing increased competition from Internet websites for ad dollars, limiting the ability of the networks to raise ad prices, Juenger stated. The profit margins and return on investment of content owners are likely to decline over time, the analyst believes. He downgraded Discovery to Market Perform from Outperform and set a $37 price target on the stock, and cut Viacom to Underperform from Market Perform, placing a $71 price target on that stock. Juenger reduced his price target on CBS to $55 from $60 and kept a Market Perform rating on the shares. He kept Outperform ratings on 21st Century Fox (FOXA) , Disney (DIS) , and Time Warner (TWX) , saying that those are least affected by the trend, as they are less dependent than their peers on the American TV ad market and have a large amount of sports programming.