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Fitch Ratings: 2010 Media Rebound ‘Modest and Uneven’

4 Dec, 2009 By: Chris Tribbey

Increased movie piracy will continue to hurt DVD in 2010, though the theatrical window should remain as-is for some time, according to a 2010 forecast by global credit rating agency Fitch Ratings.

“Movie studios will continue to emphasize cost controls in an attempt to make the theatrical window less of a loss-leader,” the company wrote.

And while the worst may have passed for media giants like Time Warner, Viacom and CBS, the advertising recovery will be very slow in 2010, the firm added.

The firm also predicts that one of the four major networks, possibly either NBC or ABC, could move to cable by 2011. “While the departure of one of the four networks would be detrimental to that affiliate group, it would actually be a material boost for the remaining three networks and affiliate groups,” the company wrote Dec. 3.

Fitch expects ad prices to stabilize in 2010, but advertisers will continue to shy away from non-TV mediums, like newspapers, phone books, consumer magazines and radio.

“Audience fragmentation will persist throughout 2010, but, positively, the pace of legitimate new-media entrants should slow,” the company wrote. “Fitch believes the field of legitimate online platforms is possibly set in video and music. The shift of eyeballs in video will likely occur to existing players, including the conglomerates' own sites.”

The firm doesn’t expect DVR to negatively affect advertising decisions, and doesn’t foresee people killing their cable or satellite subscriptions in favor of online only.

“On the surface, the TV Everywhere concept as proposed by Comcast and Time Warner appears to be a sound secular risk mitigation initiative for all parties. However, distribution companies may face challenges in convincing content companies to broadly sign-on,” the firm speculates.

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