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Digital Media Era Creates the Perfect Storm

Kagan Research reports that most media sectors have been slumping for years on Wall Street as cable TV, broadcasting and film underperform the broad stock market. Established media companies are unaccustomed to life in the doghouse because for decades they were darlings of the investors.

Are they in a "perfect storm" � a freak confluence of unfavorable trends that will suddenly pass � or has the media landscape evolved into a more hostile environment? It's an interesting debate.

Established media is roiled by digital media's disintermediation (consumers accessing content directly thus bypassing traditional aggregators), personalization and increasing overlap erasing watertight media borders of the analog era.

"I see a lot of uncertainty about the effect of viewer time shifting, the erosion of the 30 second TV spot, and the threat of the Internet for video delivery," observes John Mansell, a senior analyst at Kagan Research. "There's too much up in the air to expect optimism from Wall Street in the near term."

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