Taking Stock of the Year Ahead

[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
B&C tracks 69 media stocks and the 2005 results were not very good: the index of TV-station owners dropped 20%, even worse than the 17% slide during 2004. Cable operators slid 18% and radio stations dropped 9.1%. Universal McCann advertising forecaster Bob Coen believes spending on all media increased by a fairly healthy 4.6% last year. The good news is that overall spending should jump another 5.8% next year. But that may not help everyone in TV and radio. Except for politicians, Coen sees advertisers favoring national TV -- cable and broadcast networks -- more than local stations. And cable systems, networks and entertainment giants, which don't live on advertising alone, say they need a broad increase in consumer spending on subscriptions, DVDs and other entertainment to thrive. Here are some lessons from the stock market to carry forward this year: 1) cable operators face a big opportunity in stealing telephone subscribers from the Baby Bells, but they also face a huge challenge as the bells introduce video services. 2) Broadcasters' stocks may face another tough year. 3) Howard Stern alone cannot save satellite radio.
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