Media shares defied the current stock market downturn by rising over the course of last week.
The Bloomberg Media Index, which charts the fortunes of 43 leading media groups, saw a rise from 106 on Tuesday to 120.10 on Friday.
The increases follow the Federal Reserve’s decision last Wednesday to cut interest rates, a move which should benefit media owners by encouraging adspend. “If interest rates come down, then people can afford high-ticket items and advertisers pump up their spending,” explained Universal McCann’s forecasting director Robert Coen.
A similarly upbeat note was sounded by Michael J Wolf, senior partner for media and entertainment at management and technology consultancy Booz, Allen & Hamilton. “Advertisers won't cut back as much as people say,” he predicted. “They may slow down, but they are concerned that in a slower economy they have to create demand.”
News source: New York Times