The top 30 companies in the Dow Jones Media Titans index have lost approximately $540 billion in market valuation this year, with companies like Warner Bros. Discovery among those affected by the streaming revolution bubble burst.
Coupled with advertising slowdowns and conservative consumer behavior, the upcoming financial recession has created a historic drop in share prices, World News Era reports.
The index has dropped 40% in 2022, with its total market value shrinking from $1.35 trillion to $808 billion.
From film companies to cable networks and music streamers, entertainment conglomerates have been among the hardest hit in the economic downturn. As a result of mergers and acquisitions, as well as various cost-cutting efforts to triage losses from dwindling subscribers or ad slumps, many companies like Paramount Global and Netflix have opted for mass layoffs.
For example, Walt Disney shares are down roughly 45%, the largest annual decline since 1974, likely in part spurred by a slightly underwhelming box office for James Cameron’s “Avatar: The Way of Water.” Meanwhile, Paramount Global has declined around 42% and Netflix has seen a loss of 52%. Hardest hit, however, is Warner Bros. Discovery, which has tumbled 63% following the $43 billion merger between Discovery and AT&T’s WarnerMedia earlier this year. Since then, the company — under CEO David Zaslav — has made tough and oft-unpopular cuts to programming and executive staff in hopes of garnering $3.5 billion in savings.
Other companies that have been affected include Spotify (down 69%) and Roku (81%), as well as traditional broadcasters like Charter Communications (53%) and Comcast (31%).
While streaming platforms were boosted amid lockdown in 2020, experiencing outstanding growth in stocks, that era of growth has since downturned as immense spending caught up with executives and viewers themselves are cycling through subscriptions.
Additionally, some of these platforms — like Paramount — have had to incur heavy losses with the decline of linear television, meaning that they will have to pivot to offset those declines through other means, as seen in price hikes or ad-supported tiers.
