How Netflix is eating big media's lunch: Greenfield

Why this analyst is 'negative' traditional media stocks

The marketplace forces undermining traditional media conglomerates are being exploited by Netflix and other direct-to-consumer offerings, as more and more television viewers cut the cord on cable and satellite channel bundles, media analyst Rich Greenfield said Monday.

"Advertising overall is growing. TV advertising [is] declining," he told CNBC's "Squawk Box" in an interview. "I think more and more people are watching content not using advertising. So you look at why Netflix has exploded ... I think the lack of advertising is becoming a bigger and bigger problem for traditional media because eyeballs are shifting."

"Netflix is not just trying to replace and be HBO. Netflix is adding content that would be on Discovery. One of their most popular shows last quarter was a documentary called 'Chef's Table,'" going in the kitchens and the minds of six international culinary stars, Greenfield said. "Netflix is growing like a weed."

HBO rival Showtime, owned by CBS, is also going over the top directly to subscribers, in addition to offering its service to customers of satellite and cable, including Comcast, which owns NBCUniversal and CNBC.

Disney CEO: These brands could be sold separately

Last week, Walt Disney Chairman and CEO Bob Iger told "Squawk Box" that he sees ESPN as a media property that could be eventually sold directly to consumers like Time Warner's HBO.

"Disney would be the last company that I would expect to really go over the top. There's so much at risk," contended BTIG's Greenfield, noting cable and satellite subscribers are paying $6 to $7 a month for Disney's ESPN networks. "ESPN has never competed directly for your dollars. They're never really have tried to figure out how many people would actually subscribe just for ESPN."

Back in March, Greenfield downgraded his rating on Disney from "buy" to "neutral," saying the stock was "near full value." Since then, the company's shares have surged nearly 13 percent based on Friday's close.

"We've been sitting on the sidelines. We think the stock got expensive. We've been a five-year bull on Disney up until roughly six months ago. Did we get off a little too early? Absolutely," he told CNBC on Monday.

Lucasfilm | iTunes

On the movie side, Disney is also about to reboot the "Star Wars" franchise—with "The Force Awakens," set for release in December. It's the first of three films being produced since Disney bought Lucasfilm in 2012 for $4 billion. Stand-alone movies are also planned, such as a project exploring the backstory of a young Han Solo and "Star Wars: Rogue One" involving a heist surrounding Death Star plans. The six previously released "Star Wars" films have grossed more than $4.4 billion at the worldwide box office since 1977.

"'Star Wars' is going to be a monster. I think it's very hard to get in front of the Disney freight train right now," Greenfield said. "But everybody loves Disney right now. And I think that's part of the challenge. Disney is still exposed to the same problems in terms of advertising and the bundle sticking together."

The other factor working against Disney and the rest of big media is mobile, he said. "There are not major media companies that have any substantial presence on mobile … in terms of mobile penetration in terms of their apps [or] time spent."

Video viewing on mobile devices has soared in recent years. ZenithOptimedia—a media services network that's part of ad giant Publicis—predicts a 23 percent increase this year in the average amount of time people spend consuming online video each day.

At the same time, the new report, out last Friday, sees the number of people regularly watching traditional, linear TV peaking this year, and starting to decline for the first time in 2016.