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Spotlight on profitable growth: Profitable growth in media and entertainment - EY - Global

Spotlight on profitable growth

Profitable growth in media
and entertainment

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EBITDA Margin Percentage*, 2006–2009


EBITDA Margin Percentage*, 2006–2009

* “EBITDA Margin Percentage” is EBITDA dollars divided by revenue dollars.

** “2006–2009 CAGR (EBITDA $)” is the compound annual growth rate of EBITDA dollars.

EBITDA Margin Percentage* (2006–2010E)


EBITDA Margin Percentage* (2006–2010E)

* “EBITDA Margin Percentage” is EBITDA dollars divided by revenue dollars.

** “2006–2010E CAGR (EBITDA $)” is the compound annual growth rate of EBITDA dollars.



New distribution methods, online advertising and bundled services help M&E industries grow.

Summary: Where will this year take your media & entertainment (M&E) company? Most of the industry is poised for growth. Yet companies must keep a close watch on consumer demand and their cost structures to remain profitable. We’ll tell you what M&E consumers look for and how much you can earn by providing it.

Weathering the financial storm

How do the M&E industry’s EBITDA (earnings before interest, taxes, depreciation, and amortization ) compare to cross-industry stock market indices? The results are positive, according to our study of 89 leading M&E companies and conglomerates.

Between 2006 and 2009, the M&E industry saw its EBITDA grow by a compound annual growth rate (CAGR) of 5%. The other major indices saw a drop in EBIDA growth.

EBITDA Margin Percentage*, 2006–
2009

EBITDA Margin Percentage*, 2006–2009

A closer look at sector performance

Each sector of the M&E industry faced its own advances and setbacks over the past five years. The cable operators and interactive media sectors performed well while electronic games and the music sector had lower EBITDA.

We designed our Spotlight on profitable growth survey to help M&E companies:

  • Evaluate your own performance against your peers
  • Provide input for setting goals and performance targets
  • Target sectors of the industry for investment, acquisitions or divestiture
  • Clearly see how the industry has changed in recent years and how those changes affected profits

EBITDA Margin Percentage* (2006–
2010E)

EBITDA Margin Percentage* (2006–2010E)

Keep in mind that the global economic downturn had a big impact on survey results. The survey includes three distinct time periods.

2006-2007: The economy and M&E companies performed well.

2008-2009: The economy didn’t perform well and M&E companies suffered as a result.

2009-2010E: The economy started to perform better and M&E companies benefited from that and cost saving reductions.

Looking for an insider’s view of how your part of the M&E industry will perform? We outline the current climate, challenges for growth and an EBITDA forecast for 10 M&E sectors, specifically:

Interactive media, electronic games and conglomerates

Cable networks, cable operators, satellite television and television broadcasting

Film and television production, publishing and music



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Contents

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