Broadcast investors should brace for a big 2018.

Wells Fargo analyst Marci Ryvicker, speaking at a broadcast TV conference in New York on Thursday, said the broadcast sector could outperform the overall market and rest of the media sector.

Investors have been spooked by the reports of declining pay-TV subscribers as internet streaming services and live internet TV offerings gain traction, she said.

See: Media sector suffers selloff after Disney, Comcast give guidance scaring investors

Also read: Disney is accelerating the shift to streaming TV, and Wells Fargo says investors’ fears are overblown

“Every time either Time Warner TWX, -0.42%  or a Disney DIS, -0.05% or Viacom VIAB, +0.40%  talks about pay-TV sub declines they take everybody down. It doesn’t even matter if you’re in TV,” Ryvicker said. “Investors tend to invest in bundles. If they’re nervous about media as a whole—it’s called a risk-off trade—they start selling everything and anything that is ‘media-related.’”

What investors have overlooked, according to Ryvicker, is broadcast’s role in the growing number of stand alone streaming services and internet TV.

Virtual multichannel video programming distributors, or live internet TV such as Google Inc.’s GOOGL, +0.71%  YouTube TV, Dish Network Corp.’s DISH, +1.40%  Sling TV, AT&T Inc.’s T, -0.26%  DirecTV Now and Hulu’s new live TV offering, pose the biggest threat to the pay-TV landscape, according to Ryvicker. But it’s important for investors to separate the companies that have exposure to these rising services and those that do not.

Broadcast companies fall into the former camp.

Any live internet TV service that wants to include local, regional or national broadcast channels—and they do as it makes them more attractive to cord-cutters—has to pay the broadcaster. Ryvicker says investors seem to be forgetting that.

“Broadcast is going to get paid. No matter how you get your video, broadcast is going to be included,” she said. “That is still something the street is not willing to accept.

“I think that’s because right now the numbers for the streaming bundles are so small, but as they accelerate, and I think they will in the fourth quarter, the street is going to say, ‘you know what, broadcast is in the bundles. Their retransmission consent is totally fine’.”

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Read: YouTube and Hulu TV bundles will be rated like traditional networks by Nielsen

Though broadcast may be losing pay-TV subscribers—by an estimated 15% by 2022—investors have overlooked the boon they’ll see from internet TV gaining subscribers.

That, combined with the expectation that tax reform and deregulation will be pushed through and that 2018 will bring political ad dollars, will be catalysts for broadcast companies’ stocks.

“Right now, OTT is scaring the marketplace because investors don’t like what they don’t know. But I think OTT is going to be very good for the ‘haves,’” Ryvicker said.

“In my view, 2018 is going to bring huge M&A, it’s going to bring a lot of political dollars to the broadcast space and I believe that broadcast is not only going to outperform the overall market, but the rest of the media sector.”

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