UBS: Online Video Poses 'Real Threat' To Traditional TV

Although traditional television has dropped to an 85 percent market share of all video viewing, an analyst said there's no increase in "intent to cut the cord" among TV viewers. UBS's Doug Mitchelson launched coverage on a raft of media companies Monday with an overall Neutral rating. Mitchelson's only Buy ratings in the group include Twenty-First Century Fox Inc,

with a $46 target, Time Warner Inc.

with a $100 target and Walt Disney Co.

with a $106 target. Online streaming video will more than double by 2020, when it will garner a 35 percent market share and, pose a major threat to traditional venues, according to Mitchelson. The streaming segment has already topped a 15 percent market share in Mitchelson's view, well above the 10 percent share often reported. "Online video is back and the threat is real this time," Mitchelson said. National TV advertising dollars are "clearly following viewers online" according to Mitchelson, who estimated a 200 basis point share loss during the second half of 2014. In the recent third quarter, live TV viewing dropped by 10 percent from a year earlier, according to Mitchelson, citing Nielsen data. Market share migrated to Netflix Inc.

and to video posted on sites like Facebook Inc

, as well as to TV viewing on on unmeasured devices like gaming consoles and tablets. Still, a UBS survey found no increase in "intent to cut the cord" and discovered that heavy streamers tend also to be heavy TV watchers. Moreover, the survey found that heavy consumers of streaming video are more satisfied with Pay TV than the average subscriber. Mitchelson added that international growth prospects for pay TV "remain quite healthy." Nonetheless, Mitchelson launched coverage with Neutral ratings on AMC Networks Inc.

, CBS Corp.

, Discovery Communications Inc.

, Netflix, Scripps Networks Interactive Inc.

and Viacom Inc.

.