Andrew Neville, manager of the Allianz RCM UK Mid Cap fund, says the internet could have easily caused the death of the newspaper industry, and believes the industry lacks a platform for people to read the papers on.
"You need to be able to carry a platform round that is portable, so perhaps the Apple iPad could deliver, but it really is the cavalry arriving at the eleventh hour," he says.
"Perhaps if newspapers can get their charging structures correct maybe it will save them. Perhaps the iPad or the likes of these things will provide the newspaper industry with the platform it needs."
Trustnet Alpha Manager, Sanjeev Shah has remained bullish on media stocks through the past year and says the media sector remains his biggest overweight.
"Up until about a year ago media had been a terrible sector in the stock market. It had been de-rated over several years and this was for two fundamental reasons. Firstly, the structural threat to the companies' business models from the internet and, secondly, the threat of media fragmentation," he says.
"That led media to get down to historically low valuations and I was able to identify franchises within the media universe that were leaders in their field, which could potentially be beneficiaries of the internet and the shift online but were also potentially beneficiaries of media fragmentation as well."
Shah, who manages the Fidelity Special Situations fund, says valuations in the sector are at multi-year lows compared to the market.
"The sector is very out of favour with other institutional investors. Advertising is showing signs of recovery. The sector is also very diverse and I have exposure to many different businesses including education, publishing, event management as well as more advertising related companies."
Shah currently favours companies such as BSkyB which he says is showing good growth in high definition subscribers and Pearson, which has a dominant position in the US.
Performance over 3-yrs
Source: Financial Express Analytics
Performance over 3-yrs
Source: Financial Express Analytics
Pearson is also popular with Trustnet Alpha Manager, Leigh Harrison, who says: "We bought Pearson because of its attractive dividend yield and our belief in the long-term growth potential of the educational publishing business which includes both textbooks and digital learning resources and our desire to invest in companies with significant overseas earnings, which account for 80 per cent of Pearson's revenues."
Harrison, who manages the Threadneedle UK Equity Alpha Income fund, says he does not feel relatively strongly about the media sector relative to other parts of the market. Although he notes it does have companies which give you exposure to business-to-business B2B services rather than business to consumer services, an area he believes looks unattractive in the current environment.
"As a result we are finding other ideas in the media sector though I would be reluctant to reveal which they are but, suffice to say, there are some cheap and unloved companies sitting alongside some growth and recovery opportunities," he says.
Neville believes the B2B sector will be improving as companies become more profitable and willing to spend the excess profits on advertising.
"This is typical of a late cycle and you can see company profitability improving. Companies may be uncertain about the outlook but they know that if they spend money they will get a return on it. This has traditionally happened in all cycles so there is no reason why it should not happen in this cycle," he says.
"I think recovery in the media sector will continue quite happily throughout the rest of this year. However, will it ever get the ratings it ever got ten years ago? I really doubt it at the end of the day," says Neville.