Report: Entertainment, Media Industries Outperforming Major Stock Market Indices29 Oct, 2013 By: Chris Tribbey
In 2013 the media and entertainment industry is expected to outperform the major stock market indices, a first since 2008, according to a new study from research firm Ernst & Young.
For the year, the 10 sectors of the media and entertainment industry followed by Ernst & Young are expected to have an estimated profit margin of 26%, better than the 24% by the S&P 500 Index, the highest among those followed by the firm. Cable operators are expected to be the most profitable among media and entertainment companies, with a 41% profit margin, and the film and TV sectors are expected to see 11% annual compound growth, thanks to lower production costs and more revenue from digital streaming platforms.
“Media and entertainment companies are maintaining and growing their businesses primarily by growing their digital revenues and scaling back overhead associated with traditional media,” said John Nendick, global media and entertainment leader at Ernst & Young. “In emerging markets, increases in advertising, as well as rising incomes and media consumption, have also helped drive revenue and fuel long-term growth as consumers in mature markets continue to migrate toward digital.”