Report shows improved growth expected for 2011 as advertising and
consumer spending rebound
VANCOUVER, May 24, 2011 /CNW/ - Interactive media is the fastest-growing
segment of the media and entertainment industry, according to a recent
report from Ernst & Young, Spotlight on profitable growth. Its rise to the top of the heap is fuelled by a renewed push to
provide consumers with access to information and entertainment content
through a variety of Internet-based formats.
"It's all about content, and while that's nothing new in the industry,
this time, it's becoming clear that the majority of future revenue both
from advertisers and consumers will come from services rather than
products. So everyone ─ from venerable newspapers to social media
networks to conglomerates ─ is scrambling to find new and innovative
ways to marry content with distribution channels," says Neal Clarance,
leader of Ernst & Young's Media and Entertainment practice.
Interactive media continues to benefit from consumers' ongoing shift
away from traditional media and towards online platforms. A good
example is companies that provide streaming video services, which are
changing the way people watch television. These companies in particular
are pushing hard to find a wealth of content to entice users.
Newspapers are trying new subscription models to push readers to their
online content. Internet retailers also want in on the content action.
"To be sure, there is increased competition for established media
conglomerates, but in spite of a difficult operating environment, media
and entertainment companies continue to show resiliency," says
Clarance. "With advertising and consumer spending on the rebound, and
digital initiatives gaining speed, improved growth and profitability
lie ahead for the industry."
Spotlight on profitable growth is a five-year study on the growth and profitability of the media and
entertainment industry, based on earnings before interest, taxes,
depreciation, and amortization of margin percentage and dollars. The
new report ranks the top 10 media and entertainment industry sectors on
both their profitability and profitability growth rate, and provides a
performance comparison of the overall media and entertainment business
to other stock market indices.
The ranking of overall average profitability during a five-year period
according to margin percentage:
1) Cable operators, 37.6%
2) Interactive media, 34.6%
3) Cable networks, 31.4%
4) Satellite television, 27%
5) Publishing, 20%
6) Conglomerates, 18.8%
7) Television broadcasts, 17.6%
8) Film and television productions, 10.6%
9) Electronic games, 10.6%
10) Music, 10.6%
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