Walt Disney, Time Warner shares fall over concerns that cord-cutting will crimp revenue

Shares of The Walt Disney Co. and Time Warner Inc. fell on Thursday as concerns mount that more people are cutting the cord to traditional cable offerings in lieu of mobile viewing and a la carte options.

The movement is impacting advertising revenue for companies like Disney and Time Warner. Both companies, along with other peers, have been trying to make the move to offer more on-demand content, either through partnerships or stand-alone services.

Disney, which operates ESPN, saw shares fall $5.26 or 4.9 percent, to $101.38 in midday trading. In its most recent quarter ESPN subscriptions fell, prompting the Burbank, California, company to taper its outlook. CEO Bob Iger has said that the company would consider "direct-to-consumer" alternatives for ESPN if the traditional pay TV business continues to erode.

Time Warner, whose units include HBO and Turner, saw shares fall $2.94, or 3.8 percent, to $74.88. The New York company has partnered with Hulu to stream previous seasons of shows from Cartoon Network, along with TNT and TBS shows. It is also offering HBO Now, and on-demand service for HBO.

In a note to investors, AllianceBernstein analyst Todd Juenger downgraded both companies to "Market Perform" from "Outperform", citing the loss of advertising revenue as viewing habits shift to on-demand and streaming services.

It's the second downgrade of the week for media stocks. On Tuesday Wells Fargo downgraded Disney along with CBS Corp. and Twenty-First Century Fox Inc. to "Market Perform," but kept an "Outperform" rating on Time Warner, citing its growth in adjusted earnings.