The media exchange traded fund (ETF) contains companies that represent nearly every corner of the media universe, from television, the internet and newspapers.
That could be a good thing, since the newspaper industry had one of its roughest weeks yet last week, as six newspapers said they were going to slash payrolls, other papers announced layoffs and one said it would outsource its printing, reports Seth Sutel for the Associated Press. Tribune Co., one of the country’s largest publishers, said it might sell its Chicago headquarters, which is one of the Windy City’s most recognizable icons.
One analyst at Fitch Rating says the industry is in "survival mode." Advertising is the largest source of revenue of any newspaper, especially classifieds. Ad revenue in the last year has fallen off 12.9%, while revenue for classifieds has dropped off 24.9%.
Meanwhile, online rivals in the classified ad space, such as Craigslist, Move.com and AutoTrader.com, are thriving. And as paper circulation continues to drop, more and more advertisers find themselves shifting to internet advertising, where the reach is better.
Only two major publishers have investment-grade ratings from Standard & Poor’s: Gannett Co. (GCI), which publishes USA Today and others, and the New York Times Co. (NYT). Gannett is 2.6% of the PowerShares Dynamic Media (PBS), while the New York Times Co. is 2.5%. Year-to-date, the fund is down 14.4%.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.