Media and entertainment companies will gain from growing content demand by Internet video providers as well as traditional broadcast TV, says investment bank Jefferies, which on Thursday initiated coverage on the sector. Jefferies analyst John Janedis started coverage with buy ratings on CBS (CBS), Walt Disney (DIS), Twenty-First Century Fox (FOXA), Time Warner (TWX) and Viacom (VIA). “Despite emerging threats to the business model, we believe
If Time Warner had a theme song for the spinoff of its magazine publishing business, it would probably be “History Repeating” by Shirley Bassey and the Propellerheads. That’s because parent company Time Warner (TWX) is taking the same approach in saddling its Time spinoff with debt that Viacom (VIA) did with its spinoff of struggling video rental firm Blockbuster in 2004. Blockbuster was never able to shake its debt burden, which hindered its ability to pursue new opportunities. It was soon eclipsed by Netflix (NFLX) and eventually went out of business. Could the same fate await Time?
Apple ‘s (AAPL) iPhone distribution deal with China Mobile (CHL) this week is all well and good. But what Apple really needs to drive its stock price higher is a big new product or service category, Pacific Crest Securities says. “Although Apple ‘s (AAPL) balance sheet and strong ties into its customer base should prevent material downside, we see little to drive upside from current levels unless the company can launch a massively profitable new product or service category,” Pacific Crest analyst Andy Hargreaves said in a research note Monday. One possibility is an online pay-TV service to compete with cable, he said. To become a “virtual MVPD” (multichannel video programming distributor), Apple would need to sign deals with major premium content providers like AMC Networks (AMCX), Discovery Communications (DISCA), Viacom (VIA) and Walt Disney (DIS). Hargreaves also mentioned advertising and a mobile payment system as possible services that could drive Apple stock…