For the first time in five years, the media and entertainment industry is expected to outperform the major stock market indices in 2013. Overall revenue and EBITDA dollars have continued to climb steadily for media and entertainment companies while many other industries are continuing to struggle through a difficult economic period.
When looking at overall profitability of 10 media and entertainment sectors during the five years covered by the report, 2009 – 2013 cable operators have the highest average profitability at 41%, followed by cable networks, 37%, interactive media, 35%; satellite television, 26%; electronic games, 25%; conglomerates, 23%; content and information services, 19%; television broadcast, 17%; film and television production, 10%; and music, 10%.
For estimated profitability in 2013, media and entertainment sector rankings shifted from the five-year average with cable operators placing first at 41%; cable networks, 38%; interactive media, 33%; electronic games, 26%; satellite television, 25%; conglomerates, 25%; television broadcast, 19%; content and information services, 19%; film and television production, 12%; and music, 10%.
Highlights of the sector include:
Interactive media companies are seeing strong growth from an increase in online advertising.
EBITDA dollars for electronic gaming companies are increasing due to rising consumption on social and casual gaming platforms.
Despite rising programming costs, satellite television companies show steady growth from cost controls and increasing revenue.
Advertisers still value the ability of television broadcast to reach large audiences despite the rise of competing platforms.
In 2012, global music revenues increased for the first time since 1999 due to the growth of licensed digital music services and paid digital downloads.
Newspaper and magazine companies continue to face challenging times from declining advertising and subscription revenues. However, business information services companies are reporting stable revenues and margins.