- Pivotal Research Group, a small research firm that called troubles for Facebook and Snap early on, just released its media, internet, and communications predictions for the coming year.
- Among the analysts’ forecasts are “material” management changes at Facebook and “another ugly year” for satellite television.
Pivotal Research Group analysts Jeffrey Wlodarczak and Brian Wieser listed 12 forecasts for 2019 in a report on Tuesday that highlighted a shifting media landscape.
The analysts’ first prediction concerned Facebook: “Expect material Facebook (FB, SELL) management changes,” referring to the firm’s “sell” rating on the stock.
“Whether that means one of Mark Zuckerberg or Sheryl Sandberg alters their roles within the company or something more extreme occurs, it seems difficult to imagine that the company’s Board will allow a status quo for the Chairman, CEO and COO roles, especially as regulatory scrutiny around the world escalates over the course of 2019.”
Other players in the broader media and communications space have experienced something of an upheaval in the last year, as legacy entertainment companies scramble to compete with Netflix and Amazon’s growing reach. The sector is also rife with deal activity and speculation.
Here are some of Pivotal’s other predictions:
- Consumers will continue fleeing traditional “pay TV” models for cheaper entertainment alternatives – in other words, “cord-cutting” won’t abate anytime soon.
- “Satellite TV RIP outside of rural areas,” the analysts wrote, adding they expect it to lose 2.5 million subscribers next year, heftier than the 2.1 million lost in 2018 and 1.7 million lost in 2017.
- Netflix should continue seeing healthy subscriber growth, at a clip of 4.75 million net new paying US subscribers in the coming year (down from the addition of 5.6 million in 2018), despite headwinds that could arise from Disney and Amazon.
- CBS and Viacom will likely merge, a forecast shared by some other analysts who see such a deal in 2019.
- Sports rights will become “even more competitive” as digital-media players pursue the content more aggressively.
The firm also said that Wieser, who slapped a “sell” rating on Snap when the company first debuted in early 2017, now views the stock as “undervalued.”
- An Amazon bull says the company’s stock is his ‘best idea’ for 2019. Here’s why
- Mark Zuckerberg has reached out to Microsoft president Brad Smith, which is bad for Sheryl Sandberg because it shows how messy things have gotten under her watch
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