Disappointing second quarter earnings results from a handful of broadcast companies and concerns over consumers ditching paid TV services have sent the media exchange traded fund plummeting.
The PowerShares Dynamic Media Portfolio (NYSEArca: PBS), which tracks U.S. media companies, plunged 4.0% Thursday after falling off 1.9% Wednesday. PBS also broke below its long-term, 200-day level on Thursday.
Earlier in the week, Walt Disney (NYSE: DIS) caught investors off guard and revealed a weaker-than-expected quarterly revenue, reports Cecile Daurat for Bloomberg.
Additionally, the entertainment giant cut its forecast for cable-television profits, adding to market concerns over the declining trend in pay-TV packages. American consumers have been cutting the cord and have opted for online video streaming services, such as those provided by Netflix (NasdaqGS: NFLX) or smaller packages.
The media industry experienced an even steeper sell off Thursday, following the disappointing results from Viacom (NasdaqGS: VIA.B) and 21st Century Fox (NasdaqGS: FOX), the Wall Street Journal reports.
DISH Network Corp (NasdaqGS: DISH) revealed that its satellite TV subscriber losses quickened over the second quarter, declining by 81,000 to 13.9 million, or almost double the loss of 44,000 a year ago, CNBC reports.
“Media stocks are getting slaughtered,” Aaron Clark, a portfolio manager at GW&K Investment Management, told the WSJ. “It’s been the long-running fear that we would eventually see cord-cutting. Everyone thought it would be a slow-moving train wreck, but Disney’s comment woke people up.”