Tech stocks suffered a bad day on the Nasdaq Composite Index yesterday, with the FAANG stocks in particular taking a hit.
Facebook, Amazon, Apple, Netflix and Google have seen their collective values lose over $1 trillion since their market high earlier this year.
In August, Apple was worth $1 trillion on its own, while Amazon hit the landmark in September. Both have since seen their values drop.
Martyn Whistler, lead analyst, media and entertainment, at EY tells TVBEurope it's important to remember that while the FAANG companies tend to be grouped together, in reality they have very different businesses.
"The markets in which they operate, how they make money, how they measure success and the pressures on them are all quite distinct," says Whistler.
"Some of the share price activity reflects wider investor sentiment but it doesn’t look structural. When you look at each company in isolation, the reasons why they are where there are, it’s all very different. Those that can tell a compelling growth story and demonstrate their ability to execute will bounce back strongly."
Whistler says it's important to take a step back from the current tech downturn and look at what’s happening in the media industry: "In recent years, competition for the best content has been intense and I wouldn’t expect that to change any time soon.
"Many companies are still in a growth phase, which means they care most about driving subscribers and the top line, not the bottom. Big budget investments in content will continue. Today we hear about blockbuster shows costing over $10 million per episode - it probably won’t be long before those numbers start to look normal, perhaps even small."
EY has just published the latest version of the Capital Confidence Barometer and among media and entertainment executives, 42 per cent expect to actively pursue M&A in the next 12 months, a drop from 50 per cent a year ago and below the 46 per cent long-term average (since 2010).
Whistler describes that dip as "hardly surprising."
"In the past year, we’ve seen a lot of big deals in media and entertainment with companies adding to their portfolios of content and their distribution options. In the year ahead we’re expecting some heavyweight streaming services to launch," he says.