A combination of fear, loathing and uncertainty converged on cable programming stocks in two extremely volatile days last week, sending investors stampeding toward the exits in a massive market correction that some analysts said could be a sign of things to come.

The Walt Disney Co. chairman and CEO Bob Iger inadvertently sparked a sell-off after his comments during an earnings conference call on ESPN refuting some reports that said the Worldwide Leader in Sports had shed 3.2 million subscribers in the past 12 months (he said losses were “modest”). More importantly, Disney took down guidance for its cable networks (of which ESPN is a huge part), stating that instead of high single-digit percentage operating-income growth through 2016, the cable segment would report mid-single-digit percentage growth.

Iger’s comments came just as the market was digesting a flurry of negative news: a sector-wide slump in ratings and ad sales; the growing popularity of over-the-top video; the resultant increase in cord-cutting; and, worst of all, no currency to measure that viewer shift.

It was enough to create a mini-panic in the media sector of the stock market. At one point, every major cable media stock was down at least 10% on Aug. 5. The media sector lost a combined $60 billion in market capitalization during the period, according to Bloomberg.

PANIC STRIKES

“Yesterday was probably one of the most challenging days media investors have ever had — literally,” RBC Capital Markets media analyst David Bank told CNBC Aug. 6.

He wasn’t really exaggerating. The one-day drop for the sector on Aug. 5 was one of the worst since 2008, when the advent of the Great Recession sent shares across all sectors down by double-digit percentages. When the market closed on Aug. 5, Discovery Communications led a parade of losers, falling 12.1%; followed by Disney, down 9.2%; Time Warner Inc., down 9%; Viacom, down 7.5%; AMC Networks, down 7.2%; and 21st Century Fox, down 7%.

The declines also bled into non-programming stocks. Comcast, which owns programmer NBCUniversal but derives more than 60% of its revenue from its cable-distribution operations, fell 5% on Aug. 5 to $59.81 per share. Other cable distributors followed suit, with Charter down 1.5%, Time Warner Cable down 1% and Cablevision Systems down 1.2%.

The bloodbath continued on Aug. 6, with Viacom plunging 14.2% ($7.31 each) to $44.10 per share after reporting a sharp 9% decline in domestic ad revenue in its fiscal third quarter. For the other stocks, the losses weren’t as heavy, but they continued, with Fox down 6.4%; AMC Networks down 4.2%; Disney down 1.8%; and Time Warner Inc. down 1%. Discovery gained some ground, up 3.5% on Aug. 6, but not enough to erase the previous day’s losses. The stocks began to claw back on Friday, with Viacom and Fox up about 3% each and others rising about 1%.

Investors have been skittish about over-the-top video, declining ratings and falling ad revenue before, but those fears seemed to reach a peak after hearing Iger talk of possible weak spots in what most had believed was ESPN’s otherwise impenetrable armor.

Bank told CNBC that Iger’s comments were among the biggest factors in the selloff. Coupled with Disney’s stature as one of the most broadly held media stocks in the world, they created a perfect storm.

“I think the average media investor knew there was some vulnerability to the cable bundle,” Bank told CNBC. “But if even ESPN is vulnerable, if the gold standard is vulnerable, then maybe everybody else is vulnerable.”

But BTIG media analyst Rich Greenfield, who has warned of the perils of OTT and SVOD to the distribution sector for years, said the worst has yet to come.

“I would just stay away,” Greenfield told CNBC of Disney on Aug. 5. “As you look at the future, the cable bundle is starting to become unhinged. Consumers are just giving up on multichannel television.”

Bank added that Iger’s comments were nothing new to longtime media investors. The possible effects of cord-cutters, over-the-top competitors and poor ratings have been hot topics for years. And today’s sell-off could be tomorrow’s buying opportunity. Already the stocks started to claw back slightly on Friday, with Viacom and Fox up about 3% each and others rising about 1%.

But the 48-hour stretch between Aug. 5 and Aug. 6 seemed to feed into a growing herd mentality among media investors, who stampeded away from what they perceive as a danger.

In a note to clients, MoffettNathanson principal and senior analyst Craig Moffett said the sell-off is another indication of a change in sentiment among media investors. Whether it’s based on fact doesn’t really matter.

“Almost every investor with whom we have spoken has described an almost palpable sense that sector sentiment has changed, some would say perhaps permanently,” Moffett wrote.

CONTENT’S REIGN OVER?

After years of hearing that “content is king,” some believe sentiment is beginning to shift gradually toward distributors, which have had their own pressures with over-the-top services and cord-cutting. But while the change in viewing habits, up to now, has mainly affected cable operators, satellite and telco-TV service providers, investors are beginning to realize that the disintegration of the pay TV bundle could have an equally devastating effect on programmers.

Distributors are not taking the threat lying down. Content companies, which have offset ad revenue and ratings declines by cutting distribution deals with OTT players, are now beginning to feel the pushback from pay TV distributors.

Charter Communications CEO Tom Rutledge recently told analysts that when content companies make the programming they sell to cable companies available in other spaces in pursuit of ancillary revenue, they risk diminishing the value of those offerings.

“No trend goes unchecked forever,” Rutledge said.

Dish Network chairman and CEO Charlie Ergen said although distribution is gaining some leverage, Netflix is the “most powerful content aggregator in the world today,” mainly because of its cost structure.

Netflix pays for programming at a fixed price, while Dish pays on a per-subscriber basis. That disparity, Ergen said recently, has caused Dish to change its approach to content deals.

“We have to now look at each content deal and decide whether, long-term, that content-to-content deal makes sense for us,” Ergen said on a recent call with analysts. “When somebody comes in and says, ‘I want a double-digit rate increase,’ and they’ve had double-digit viewership declines, we don’t think that math works for us.”

The shift in viewing habits — people are watching more programming on different devices and platforms inside and outside the home — has been going on for years, as has the cry for a new measurement metric to track just how many people are watching. Measurement companies are responding: Nielsen is expected to unveil its Total Audience Measurement product by the end of the year, and ComScore and Rentrak both have products tailored to tackle the change, but so far nothing solid has been released. If the programming sector sell-off continues, will that speed development of a new measurement currency?

“The primary beneficiaries of the sell-off of the entertainment stocks are the measurement stocks,” Telsey Advisory Group media analyst Tom Eagan said. “Essentially, declines among the programmers might finally convince them to come to an industry consensus on a crossplatform metric or currency.”

CHART: To see how major content stocks fared during the downturn, click here.

Most media stocks fell for a second day as earnings reports highlighted the risk that distribution revenue could be hurt if the pay TV bundle is coming undone.

The biggest losses came at Viacom, whose earnings report included a big drop in ad revenue. Viacom’s stock finished down 14 % at $44.10 a share.

AMC Networks fell 5% to $75.01 a share after its earnings report.

21st Century Fox, which lowered its earnings guidance for 2016 during Wednesday night’s earnings call (August 5), was down 6% to $29.06. And Crown Media, which owns Hallmark Channel, reported strong earnings on Monday, but its stock still fell Thursday by 8% to $4.64.

Other programmers whose share fell included Comcast, down 2% to $58.76; Disney, down 2% to $108.55; and Time Warner Inc., down slightly to $79.19.

See which media stocks bounced back at broadcastingcable.com.

AMC Networks reported higher second-quarter profits, reflecting the acquisition of BBC America.

Net income rose 41% to $83 million, or $1.14 a share, from $58.7 million, or 83 cents a share, a year ago. Net revenue rose 15.1% to $601 million.

Cash flow at AMC’s national networks, which include AMC, SundanceTV, IFC, BBC America and WE tv, rose 33% to $182.6 million. Net revenue was up 22.8% to $488.6 million, due to the inclusion of BBC America. AMC acquired a 49.9% stake in BBC America last year.

Ad revenue across the networks, including BBC America, increased 13.4% to $186 million. Growth was strong at WE tv, IFC and SundanceTV, the company said.

"AMC Networks had a strong second quarter, with double-digit growth in revenues, AOCF and operating income driven by our continued focus on investing in high-quality programming," CEO Josh Sapan said in a statement. "In addition to maintaining our core content strategy, we have become more of an owner of content; we have closely aligned ourselves with a premier producer of content through our BBC American joint venture.”

Read more at broadcastingcable.com.

Univision Communications reported a loss in the second quarter as revenue fell compared with last year, when its networks covered soccer’s World Cup.

The company lost $23.9 million in the quarter, compared with net income of $98 million a year ago.

Revenue fell to $696.3 million from $833 million a year ago. The company said the World Cup generated $115.5 million in incremental revenue a year ago. Excluding the World Cup, revenue decreased 1.7%.

“During the 2015 second quarter, we continued to execute on our strategy to deliver a Univision branded experience and target bilingual and millennial audiences with tailored ‘must-see’ content across platforms, which included signing a deal with Netflix to stream top Univision and UniMás content,” said CEO Randy Falco.

Read more at broadcastingcable.com.

Time Warner Inc. reported higher earnings as cost cuts at Turner Broadcasting boosted operating income. Profits were lower at HBO as it spent on marketing and technology to launch HBO Now.

Second-quarter net income rose 14% to $971 million, or $1.16 a share, from $850 million, or 95 cents a share, a year ago.

Revenue rose 8% to $7.3 billion.

The results were ahead of Wall Street expectations. The company also reaffirmed its guidance for full-year results.

At Time Warner’s Turner Broadcasting unit, adjusted operating income rose 20% to $1.1 billion as revenue rose and costs — including programming costs — declined. Turner’s revenue rose 3% to $2.8 billion.

Ad revenue was down 1% because of the strong dollar. Domestic ad revenue was up because of growth at its news networks and strong March Madness sales. Those gains offset the absence of NASCAR programming and having fewer NBA playoff games.

Adjusted operating income fell 8% at HBO, which had higher marketing and technology costs because of the launch of the HBO Now streaming service. Revenue at HBO was up 1% to $1.4 billion.

Read more at broadcastingcable.com.

The advertising market is expected to continue to be lukewarm at best in the second quarter, as declining ratings are expected to continue to drive down overall ad revenue.

Most of the top content companies are expected to release calendar second-quarter results in the next few weeks. In two separate reports, MoffettNathanson senior research analyst Michael Nathanson and Evercore ISI Group media analysts Vijay Jayant and David Joyce agreed that the ad market would continue to be tepid for broadcasters and cable networks alike. In the past, cable networks were able to offset ad-sales declines with strong affiliate-fee increases, but that gap is narrowing, the analysts said.

Overall, Nathanson predicted that national ad spend will be down between 2% and 3% in the second quarter, what he called the weakest growth in a non-recessionary quarter for the sector.

DOWN 8% IN KEY DEMO

Last year’s lower upfront base and tepid scatter markets are contributing factors, Nathanson said in a research note, but the steep decline in TV ratings is the main culprits. Aggregate C3 primetime ratings in the coveted 18-49 year-old demographic were down 8% in the second quarter, according to Nathanson, with broadcasters dipping 4% and cable networks declining 9%.

While the analysts may differ slightly on their predictions — Joyce and Jayant estimated that Viacom’s domestic revenue would fall 7.2%, while Nathanson foresaw an 8% decline — they agreed that compelling content is what is separating the winners from the losers. And for both broadcasters and cable channels, that means event programming and sports.

For some networks, tough comparisons to the prior year will hurt growth — for example, NBC had the Winter Olympics in second-quarter 2014, and ESPN had the FIFA men’s World Cup at the same time last year.

Others will benefit from event sports and entertainment programming to differing degrees. Joyce and Jayant predicted that Fox would get a boost from some FIFA Women’s World Cup matches in the second quarter, but not enough to offset greater overall ratings declines. AMC, which aired the much-awaited finale of Mad Men during the calendar second quarter, should see a 17.9% increase in ad sales, the two analysts believe.

Viacom, which has been plagued by ratings declines across the board, should expect domestic ad revenue to dip 7.2%.

While in the past, networks were able to fall back on rising affiliate fees and retransmission-consent revenue to offset ad-sales declines — 2014, when affiliate-fee revenue surpassed ad revenue in overall dollars for the first time, was a watershed year for the sector — that growth is beginning to level off.

Affiliate-fee growth is expected to continue, Nathanson added, but overall revenue from affiliate fees will decline as pay TV subscribers fall.

“We believe that the next wave of negative revisions for the sector could manifest itself in a slowdown in affiliate fees,” Nathanson said.

In a June note to clients, Nathanson said affiliate-fee revenue, which has risen at a double-digit clip for the past five years, will climb 9% in 2015 and by 2018 will increase an average of 7%.

Retransmission-consent fees, he wrote, which have grown an average of 67% between 2010 and 2015, will rise just 16% between 2015 and 2020.

Nathanson didn’t factor in the impact of over-the-top services on affiliate-fee revenue, but OTT is also expected to have a small impact on ratings declines.

Jayant and Joyce think Dish Network’s Sling TV OTT service could have as many as 250,000 customers, while CBS All Access (the broadcast network’s OTT offering) could have as many as 300,000 subscribers. Standalone online offering HBO Now could have about 400,000 customers, according to Joyce and Jayant, but again isn’t expected to make much of an impact on ratings.

The analysts said OTT offerings over the past two years have allowed cord-cutters and cord-shavers to be partly responsible for fully-distributed cable networks in losing between 3% and 5% of their distribution.

Traditional viewing has declined: the top 25 cable networks saw viewership dip about 10% season to date, on par with the 7% decline in 2014).

But there’s evidence that people aren’t watching less — they are watching more, at different times.

“Perhaps stabilization is the new up, until, of course, better measurement on multiple screens is available and accepted,” the analysts wrote.

And it’s not just different screens. More and more viewers are watching programming when it is most convenient for them and when longer viewing windows are considered ratings rise dramatically.

RISE IN C7 SALES METRIC

Broadcaster CBS has been a big proponent of moving to a live-plus-seven-day (C7) measurement window, counting viewership up to seven days after a show originally airs. Joyce and Jayant predicted that CBS, which already sells about 30% of its ad inventory in C7, will increase that to more than 50% of its inventory this year.

The numbers appear to back up the practice. According to the analysts, ratings can in some cases more than double in C7 compared to live plus same day ratings in the coveted Adult 18-49 year-old age demographic. For example, TNT’s Rizzoli & Isles drama series normally gets a 0.6 live-plus-same-day rating, but its C7 rating is 1.3 — a 117% increase.

Other shows, such as A&E’s Duck Dynasty (0.9, 1.7 for an 89% increase) and Discovery Channel’s Deadliest Catch (1, 1.6, 60%), see healthy increases as well.

This is not just a cable phenomenon: according to Jayant and Joyce, a June 25 episode of Fox’s Wayward Pines saw ratings in the 18-49 demo double to 2.4 in C7, compared to 1.2 for live plus same day. CBS’s Under the Dome saw a 69% increase between C7 (2.2) and live plus same day (1.3) on June 25.