Thanks to continued
growth in online advertising, the interactive media sector is expected to see a 33% increase in profitability this year.
That’s according to a new report from Ernst & Young,
which expects the broader media and entertainment industry to outperform the major stock market indices for the first time in five years -- due in large part to digital advances.
Among all media and entertainment sectors, interactive media also boasts the highest EBITDA dollar growth rate of 22%, EY reports.
“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,” stated John Nendick,
global media and entertainment leader at EY.
“Media and entertainment companies are maintaining and growing their businesses primarily by growing their digital revenues and scaling
back overhead associated with traditional media,” he added.
The 10 sectors of the media and entertainment industry measured by EY are expected to have a 2013 estimated profit margin
of 26%, followed by the S&P 500 Index (24%); FTSE 100 Index (23%); CAC 40 Index (18%); DAX 30 Index (16%); and the Nikkei Index (12%).
A review of the 2009-2013 compound annual
growth rate shows that in terms of EBITDA dollars, interactive media is the fastest-growing media and entertainment sector at 22%, followed by electronic games (14%); film and television production
(11%); cable networks (10%); conglomerates (9%); TV broadcast (9%); satellite television (8%); cable operators (6%); content and information services (2%); and music (1%)."Bag of Money" photo from Shutterstock.