TW (Time Warner) TOPS IN MEDIA FLOPS (Dinosaur Media DeathWatch™)

NBC may broadcast "The Biggest Loser," but in terms of 2007 stock price performance, Time Warner ran away with that title.

Of the big five entertainment conglomerates - CBS, Disney, News Corp., Time Warner and Viacom - only Viacom managed to post a share price increase this year, as uncertainty over the impact of digital delivery of content and a weakened advertising environment due to a weak economy dampened investor enthusiasm for the space. (NBC is part of General Electric and doesn't trade on its own merits like the other companies.)

Time Warner took the largest broadside from jittery investors, with its stock price shedding 23.46 percent of its value during the year. It closed yesterday at $16.67.

While the company was hammered for everything from its perceived reluctance to detail a succession plan - which it finally announced in November - to the disappointing performance of AOL, it was the cable unit that caused the most anxiety for investors.

According to Miller Tabak analyst David Joyce, investors are uncomfortable with Time Warner Cable accounting for roughly 40 percent of the parent company's $94.4 billion enterprise value at a time of increased competition from satellite and telecom providers as well as intense pressure from the Federal Communications Commission.

CBS didn't perform much better than Time Warner, with its stock closing trading yesterday at $26.95, down 13.57 percent for the year.

Part of the blame for CBS' issues lay with Chairman Sumner Redstone's decision to split the company off from Viacom two years ago.

Joyce said that CBS suffered from its businesses being highly advertising focused and therefore not diversified enough to weather the year's economic downturn.

All the stock prices slide because all the company’s could not deliver on their proposed audience levels. People are watching less of the old broadcast TV because most of the content is insulting to them and their country. It has NOTHING to do with the fictional “...weakened advertising environment due to a weak economy dampened investor enthusiasm for the space.”

Joyce said that CBS suffered from its businesses being highly advertising focused and therefore not diversified enough to weather the year's economic downturn.

Addressing CBS' supposed problem with its advertising focus Boriss recently disclosed dinomedia's dirty little secret of paying more for less.

... What incentive does an agency have to propose more productive plans for their clients’ ad spending if these threaten to reduce both total ad expenditures and this cozy business model — for instance, a plan that shifts funds to lower cost, more highly targeted, and more measurable ads on the Internet? Not much.
So when you read in the NY Post and at BuzzMachine that advertisers are paying for more and more network TV spots, at higher and higher rates, because of fewer and fewer network viewers, using plans developed by their ad agencies, it makes one wonder. Just whose side are ad agencies on? ...

CBS using a supposed economic downturn as a scapegoat echoes the economic boogeyman excuse pitched by bell cow Washington Post.

Newspaper publishers have struggled in recent years as Deutsche Bank noted that about 80 percent of The Post Co.'s profit-creating businesses -- almost everything but the newspaper -- have not been affected by the economic slowdown.

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