LOS ANGELES (Reuters) - A raft of dismal quarterly results and grim forecasts by U.S. media companies has investors lowering 2009 expectations and looking to smaller players with less exposure to DVDs and advertising.
One bright spot in the quarterly earnings reports was cable operations, whose steady stream of affiliate and subscriber fees should continue to offset a swoon in TV advertising that is expected to last through 2009, analysts say.
"The area that we like conceptually is cable networks. I think they are better positioned than the pure broadcast companies and the TV stations," said Larry Haverty, manager of Gabelli Global Multimedia Trust. Traditional media is out.
Disney Chief Executive Robert Iger provoked further angst last week by describing "secular changes" to DVD sales that could portend slower growth even after the recession fades.
"The bigger you are, the more you are tied deeply to traditional media and the more you're dependent predominantly on display (advertising) the harder this is going to be for you," said Mike Vorhaus, president of media research firm Magid Advisors.