Is Innovation Hurting the Media ETF?

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Technology is advancing and evolving, but it may be doing so at such a fast pace that some companies in the media exchange traded fund ( ETF ) could get left in the dust if they don't adapt.

Blockbuster has filed for bankruptcy in the United States, but internationally, it's still holding up. The former video rental giant says its international shops are still up and running, writes Stephen Kurczy for The Christian Science Monitor . Netflix has hurt Blockbuster's business at home, but mail-order rental services aren't as popular overseas - many countries have higher postage fees and more strict rental laws.

Blockbuster's troubles are a sign of changing times in the United States.

Technology companies are offering online-video services through their own media avenues, according to The Economist . Newer TV models allow viewers to stream online videos, bypassing old-fashioned distributors. And does anyone watch network television anymore?

For now, big media is safe since efforts to persuade television and film companies to reduce prices of their products by streaming online have been mostly rejected.

Currently, people watch online videos for around three hours per month while viewings on regular TV sets averages around 158 hours. Forrester Research found that many didn't understand the new devices and only a few would recommend the product. As things like on-demand viewing both through television and online catch on, however, the numbers may do a flip-flop. And as Blockbuster has so painfully learned, the ability to adapt and to do it quickly will separate the success stories from the object lessons.

For more information on the media industry, visit our media category .

  • PowerShares Dynamic Media (NYSEArca: PBS): Top components include Comcast, Time Warner, Viacom and DirecTV. PBS is down 8.6% in the last six months.

Max Chen contributed to this article.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

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