Media shares have gone from heaven to hell in the last twelve months, and it keeps getting worse. A while back I blogged about whether it’s a structural problem, if the media industry’s business model is fucked, as Nick Ward of Panmure Gordon put it, or if the industry is just suffering the effects of a jittery market.

When media shares took yet another massive beating earlier this week, I had a chat with Henrik Schultz, a media analyst at Kaupthing, who I know thinks the media sector is just going through a rough patch at the moment. His view:

”It’s a real bear market out there. The market is particularly worried about companies with big exposure to the advertisement market, so these get the worst beating. If they have high debts in addition, like Mecom, they are punished even more.

“Right now investors are really worried about consumer spending. Everyone with big exposure to the consumer sector is punished. The worst turmoil is over for financial institutions, but we’ve yet to see the impact on consumer spending.

“We’re in a real bear market now, but these rarely last very long. We’ve already put at least six months of this market behind us in the media sector, but of course it hurts when it goes on and on,” he said, adding that he is confident media shares will get a real lift in six to twelve months.

The bear is back (picture from Nordagutu station, Telemark, snapped from the train when driving past)

Now, I must admit that I’ve been watching and waiting for the ghost of recession to spread from the US and through Europe. Watching and waiting for its footprints to appear in the quarterly results of media companies like Metro International and Schibsted as the advertisement slump set it.

And it’s certainly a story that’s still happening: at an early stage the Spanish property and job markets, and the corresponding classified sections, were hit, later the same market segments in Denmark, where the newspaper ad market also is ravaged by a two-year-long freesheet war. 

In Norway, I think it’s yet to kick in – in fact, there are those who think Norway might be spared. But only Wednesday I was talking with Kees Pijnapples, editor-in-chief of Mecom-owned de Gelderlander, who said revenues in Holland were down as a result of a slump in parts of the classifieds market.

Now, I promised you a bullish view, Schultz is certainly bullish about the outlook, but me? We’ll I’m traveling through bear country at the moment - I kid you not, just look at the photos in this post - and I’m a bit grumpy since the web access here is very limited (hell, even my cell phone is struggling to find a connection here). Besides, I guess I’m more interested in recording the story as it unfolds than in predicting the outcome.   

And, if I can only find a spare moment while covering the festival I’ll be attending this weekend, I’ll tell you a very bearish tale from my part of the world…