Big Media Q1 Corporate Earnings Roundup: How Long Will The Good Times Roll?

Big Media companies in the Q1 earnings season that wrapped this week reminded me of Garrison Keilor’s description of the kids in Lake Woebegon: Virtually everybody was above average, at least when measured against analysts’ expectations. Media stocks began to trade ahead of the overall market as Q1 reports spread their cheery results. But CEO presentations to analysts left me thinking that companies simply had a good quarter. With just a few exceptions — Dish Network’s Charlie Ergen comes to mind — they seemed as complacent as ever about the need for bold initiatives to reinvigorate their maturing businesses. Movie theaters still aren’t addressing the long-term declines in ticket sales. Studios still don’t know what to do about their evaporating DVD sales. Networks appear flummoxed by the general decline in their ratings. And most pay TV distributors can’t imagine anything besides marketing gimmicks that might enable them to proactively boost subscriptions. In order to beat the Street’s earnings expectations, several companies relied on unsustainable gambits. They cut costs, raised prices, and enjoyed the fruits of conveniently timed licensing deals with digital streaming services including Netflix and Amazon. It sounded like they’re hoping that they can keep coming up with new tricks, and that they’ll be bailed out by continuing growth in the overall economy, which remains vulnerable to shocks including a possible worsening of the European debt crisis. (more…)

This article was printed from