Investors on the ASX could almost be forgiven for completely overlooking the media sector. For what has historically been an important segment of the overall market and also a significant earnings generator for share market investors, the sector doesn't appear to be garnering the sort of attention it used to or arguably as much as it deserves…
What's happened?
Old stalwarts of the industry have endured significant erosion in their earnings power over the past decade. This has left companies such as Fairfax Media Limited (ASX: FXJ) and APN News and Media Limited (ASX: APN) in a far weaker position, with "new world" competitors such as REA Group Limited (ASX: REA) and SEEK Limited (ASX: SEK) capturing market share.
It's a similar sorry story for the free to air television assets housed inside Ten Network Holdings Limited (ASX: TEN), Nine Entertainment Co Holdings Ltd (ASX: NEC) and Seven West Media Ltd (ASX: SWM), which are all struggling to grow in the face of the entrance of online streaming which is fast gaining traction amongst viewers.
Then there has been the hole left by the separation and delisting of Twenty-First Century Fox Inc which houses many of the high growth assets of Rupert Murdoch's empire, with the newspaper, book publishing and some digital assets remaining in the ASX-listed News Corp (ASX: NWS).
While "old world media" assets from television to radio and newspapers are all facing structural headwinds from digital and online competition, one media sector which appears resolute is the outdoor advertising sector.
Interestingly both APN Outdoor Group Ltd (ASX: APO) and oOh!Media Ltd (ASX: OML), which are leading outdoor advertising companies in Australia and New Zealand have recently listed on the ASX and both companies look to have bright futures ahead of them. APN just held its annual general meeting at which it reminded shareholders that it had beaten its prospectus forecasts for 2014. It also provided a strong outlook for 2015 and stated that unlike most other media, APN's audiences are increasing and therefore APN's service offering is growing in attractiveness with advertisers.
