The Year Wall Street Cut the Cord

[Commentary] It was the year Wall Street discovered cord-cutting. Media stocks are headed for their first annual decline since 2008 as investors get increasingly wary of the growing number of Americans who drop traditional pay-TV packages, threatening the business model of an entire industry -- from cable providers to program producers.

Walt Disney Co sparked investors’ angst in August by revealing its ESPN sports network had lost subscribers and cutting its cable-TV outlook, triggering the worst two-day slump in US media stocks in almost seven years. As 2015 draws to a close, the Standard & Poor’s 500 Media Industry Group has fallen 4.3 percent for the year as more consumers migrate to cheaper “skinny” TV packages with fewer channels or watch shows via online services like Netflix. The decline would be even more severe excluding one-off events such as the pending acquisitions of Cablevision Systems and Time Warner Cable, which drove up the shares. Ironically, Disney -- the catalyst for the industry’s initial slump -- will end 2015 as one of the few winners. The entertainment giant, whose “Star Wars: The Force Awakens” recently shattered box-office records, has risen 14 percent this year, beating the S&P 500 Index’s 1 percent gain. Here’s what the stock performances of 2015 reveal about Wall Street’s bets on possible winners and losers in a shifting media landscape.