(FreedomBeacon.com)- This year was a tough one for many industries, but one in particular was hit extremely hard.
Recent reports have shown that Hollywood lost $542 billion total in market value this year. That includes cable providers, streamers, major students and media giants. The bulk of the losses were felt by major studios such as Comcast, Netflix and Walt Disney Co.
The Dow Jones Media Titans index dropped 40% in 2022 alone, according to a report by the Financial Times. The total market value of the index, which tracks the overall performance of the 30 biggest media companies in the world, dropped from $1.35 trillion in 2021 to $808 billion.
Those losses far outpaced other major sectors such as telecommunications, which experienced an 11.2% decrease, and banking, which dropped 14.5%.
The huge losses happened due to a major downturn in streaming along with millions of households also cutting the cord. As households have also cut spending during this extremely high inflationary period, advertising has cratered as well.
Disney was one of the biggest losers in Hollywood, with its stock value dropping 40% in 2022. Profitability outlooks weren’t great, either, which prompted the company’s board to fire its CEO, Bob Chapek, and bring back Bob Iger, who preceded Chapek in the role.
In fact, Disney may experience its worst financial year since back in 1974.
Netflix experienced two quarters in a row of net losses of subscribers. That forced the company to cut costs in multiple areas, which included laying off workers. In 2022, the streaming giant’s stock price is down by more than 50%.
Paramount Global has decreased in value by 40%, and Warner Bros. Discover – which owns liberal media outlet CNN – has dropped by more than 60%.
Comcast – which owns Universal, MSNBC and NBC – experienced a drop of more than 30% in 2022.
In the Financial Times report, Michael Nathanson, who works at SVB MoffetNathanson as a media analyst, said:
It’s been a perfect storm of bad news. I’ve been covering this sector a long time, and I’ve never seen such a bad collection of data points before.”
Roughly 3.5 million people cancelled their cable TV or satellite TV plans this year alone, and that number is expected to climb in the future. The reasoning is that traditional cable bundles force you to pay for channels you don’t watch.
That led many big media companies to create their own streaming networks, hoping to capitalize on this trend – and not lose customers in the process. But, that hasn’t worked out so well.
All the revenue that the cable companies are losing from customers cutting the cord isn’t being made up by streaming revenue.
A few weeks ago, The Hollywood Reporter published a story on the topic. It cited James Dolan, the executive chairman of AMC Networks, who said the company needed to have “a large-scale layoff as well as cuts to every operating area.”
“It was our believe that cord-cutting losses would be offset by gains in streaming. This has not been the case.”