Summary:

Old media isn’t seeming so stalwart after an analyst at Lehman Brothers this morning downgraded shares of Disney, CBS and News Corp., sending them down as much as 3.8 percent, 6 percent and 3.2 percent, respectively. The report, written by Lehman’s Anthony DiClemente, looked at declining […]

Old media isn’t seeming so stalwart after an analyst at Lehman Brothers this morning downgraded shares of Disney, CBS and News Corp., sending them down as much as 3.8 percent, 6 percent and 3.2 percent, respectively.

The report, written by Lehman’s Anthony DiClemente, looked at declining revenue for the entertainment industry in general, for which it blamed “ubiquitous technological change” including digital distribution, audience fragmentation and file-sharing. According to Wired News, DiClemente pointed to tech companies as successors to the entertainment throne. “Content may no longer be king in the entertainment business, as distribution giants Apple and Google seem to prove again and again.”

DiClemente downgraded Disney to “underweight” from “equal weight,” dropping his price target on the Mouse House to $29 from $40; he also downgraded CBS shares to “neutral” from “equal weight,” cutting his price target to $16 from $25. And he took his rating on News Corp. to “equal weight” from “overweight,” lowering his price target to $15 from $26.

Update: DiClemente also downgraded Time Warner and lowered his price target for Viacom (Viacom missed the downgrade due to the success of Rock Band and affiliate cable fees).

We’re pretty sure digital distribution is the future, too, but we don’t have that kind of market power.

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