The 4 Drivers of Moat in Media Today
Long-term success will require producing a variety of programming across multiple sectors, a strong portfolio of network brands, lower exposure to advertising revenue, and more exposure to international markets.
Neil Macker: We recently published a report looking at the television ecosystem and outlining a four-part moat framework for media companies. As a result of this work, we've downgraded Discovery Communications (DISCA) to a narrow moat from wide moat. In our report, we looked at some of the challenges facing the media industry, such as cord-cutting, and how the media industry can evolve to tackle these challenges.
We've examined trends facing the industry, including declining television penetration and lower viewership by young adults, along with some common reasons given for these problems such as pricing. We believe that the industry is ripe for innovation on the distribution side and believe that content owners should work with new distributors such as Apple and Sony to protect the value of the bundle to consumers. Based on this work, we've created a four-part framework for evaluating the competitive positioning of media firms within the industry.
Neil Macker does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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