'Old Guard' Players Post Gains

LOS ANGELES Concerning Wall Street's view of media, it was out with the new and in with the old last month.While shares of the more traditional movie retailers Blockbuster and Movie Gallery, for example, surged approximately 35 and 24 percent, respectively, during the holiday month of December, their new-media counterpart, Netflix, saw its shares tumble about 12 percent.The stodgy old conglomerates also outperformed the more nimble growth companies, too. Time Warner shares were up 8 percent last month, while shares of Walt Disney rose 4.5 percent, and shares of News Corp. were up 3.5 percent.By contrast, shares of Yahoo and Google dropped 5.5 and 5 percent, respectively. TiVo shares were off 10 percent.While shares of XM Satellite Radio rose a penny during the month, shares of rival Sirius Satellite Radio sunk 17 percent, but satellite TV operators DirecTV Group and EchoStar rose 10 and 4 percent, respectively.Speculation is rampant that Liberty Media, which will take control of DirecTV around midyear, might try to merge its new asset with EchoStar, operator of Dish Network.New-media's funk even spread to the top makers of video games, despite predictions of robust sales fueled by a holiday gift-giving season that coincided with massive hype about next-generation consoles.Analyst Lowell Singer seemingly nailed it when, in early December, he said he was neutral on the group, though he rated shares of Activision "outperform." They closed only 1.5 percent higher for the month, though outperformed Electronic Arts (down 10 percent), THQ (down fractionally) and Midway Games Inc. (down 10 percent). Shares of Take-Two Interactive Software rose 2.5 percent."We believe that the console transition is likely to remain volatile," Singer said. "We maintain our longer-term neutral view on the industry, but continue to rate Activision 'outperform' due to its robust upcoming release slate and its overall game quality."Oppenheimer analyst Shawn Milne in December initiated coverage of THQ with a "buy" rating, partly because its titles for PlayStation 2 and the Nintendo DS are solid.He also sees potential for Activision in the new year, in part because he likes the prospects for its "Guitar Hero" game and sequels to such franchises as Shrek and Spider-ManLikewise, Bank of America analyst Michael Savner is bullish on shares of Activision and THQ, though he is neutral on Take-Two and Electronic Arts.As for new media's more dramatic losers, TiVo hasn't helped its cause with the ongoing confusion as to when Comcast Corp. might offer the TiVo software to all of its customers. TiVo's software solution is considered a huge step for the company that introduced DVRs to the masses."We still think the market will give TiVo some leeway as it sorts out its strategy, keeping the shares' valuation largely intact," FBR Research analyst Brian Coyne said. He has a $6 price target on TiVo shares, which closed the month at $5.12, six cents shy of where they started the year despite a couple of spikes past the $8-mark at about midyear.As for Netflix, its shares could remain volatile, some observers said, as the DVD-by-mail company gets set to roll out plans as to how it will deal with digital-download technologies that allow for movies delivered on-demand.

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'Old Guard' Players Post Gains

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