Cable stocks began the long crawl back on Friday after two straight days of heavy losses, with Viacom and other major media stocks gaining back some lost ground.
The programing sector was hit hard in the past few days, with stocks in the sector down a collective 10% between Aug. 5 and Aug. 6 as investors, skittish over over-the-top competition, declining ratings and slumping ad revenue, headed for the exits. Viacom dipped more than 14% on Aug. 6 after reporting a 9% decline in domestic ad revenue in its fiscal third quarter. Discovery dipped 12% on Aug.5 after it reported sluggish results for its U.S. networks and others like Walt Disney Co., 21st Century Fox and AMC Networks weathered similar declines.
Viacom began the long road back, rising as much as 6% during the day before closing at $45.47, up 3.1%. Other stocks were up slightly – 21st Century Fox rose 2.8%; AMC Networks rose 1.4%; Time Warner Inc. increased 1.2%; and Disney increased 0.7%. Discovery, which gained back some ground Thursday, fell 1.5% on Friday.
Distribution stocks also felt some pain early on – Comcast dipped about 5% on Aug. 5 and Charter, Time Warner Cable and Cablevision declined in the 1% to 2% range. Cablevision, which reported second quarter results on Friday, saw its stock dip as much as 4% on Aug. 7 before closing at $25.82 each, down 2.7%, despite reporting its first positive customer relationship growth (5,000 customers) in two years.
Cablevision CEO James Dolan also lashed out at Verizon Communications’ FiOS service – the company is often singled out by analysts as having the greatest exposure to FiOS service in the cable industry – claiming that the telco has lost the competitive fight.
On a conference call with analysts, Dolan said that since Cablevision began competing with FiOS, Cablevision has taken about 2 million phone customers from the telco to become the largest telephone company in the tri-State area.
“The impact of FiOS on Cablevision has been minimal,” Dolan said, adding that the telco fiber unit is “an unprofitable business today, and I doubt that they will ever be profitable.”
Cablevision, on the other hand, has transformed its business, focusing on connectivity rather than promotions, and has led the charge for flexible packaging with its cord-cutter package (high-speed Internet and a digital antenna) and other products.
“Cablevision has changed its culture. We no longer think like a monopoly. The Verizon FiOS Effect, if there ever was one, is over,” Dolan said.
Verizon said its products would provide the best response to Dolan's claims.
“We’ll let our FiOS services speak for themselves – better Internet speeds, better connectivity, better TV quality, tops in customer service rankings, and better overall value for our customers,” Verizon spokesman John Bonomo said in a statement. “That speaks volumes.”