The coronavirus has already hammered the travel and airline sectors as more consumers are opting to stay at home to avoid getting sick. Now the virus has claimed another economic victim: the news media and Hollywood, which are feeling the financial ripple effects of a weakening advertising market.
Axios reported this week that analysts are predicting that the entire advertising market is likely to be negatively impacted by the coronavirus, based partly on how China’s advertising industry has faltered in recent months.
Advertising is the lifeblood of major media conglomerates like the Walt Disney Co. and Comcast. These media empires function as movie and TV studios, but they also own news divisions, like ABC News and NBC News, which depend heavily on commercials and digital ads.
Axios reported that advertising is suffering because of uncertainty in marketing around retail and consumer packaged goods, which are often linked to Chinese supply chains. Advertising is also being weighed down by the travel and entertainment sectors, which tend to make large ad buys.
Disney shares have tumbled more than 15 percent since late February. Comcast shares are off about 7 percent for the same period.
Another media giant that is feeling the effects of the coronavirus is the New York Times.
The Grey Lady said in a SEC filing Monday that it expects global advertising revenue to be down this quarter due to uncertainty surrounding the coronavirus. “Like many companies, in recent weeks we have begun to see some economic impact from the coronavirus,” Times CEO Mark Thompson said in the filing.
The newspaper said it expects total advertising revenues to decline between 10 and 20 percent in the current quarter. It said digital advertising revenue is expected to decline 10 percent.
The filing caused shares of the Times and other media publishers to dip on Monday, though the some of the stock have since recovered those losses.
Axios also reported that advertising giants including WPP, Publicis, Omnicom, and IPG have seen their shares sink in recent days.
Follow David Ng on Twitter @HeyItsDavidNg. Have a tip? Contact me at dng@breitbart.com
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