Cable TV Leads Media, Entertainment Sector in Profits This Year

Cable operators project 40 percent margins in 2015, Ernst & Young reports

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This is a great time for media or entertainment companies, especially if you’re in the cable business, according to a report to be released Wednesday by Ernst & Young,.

Cable operators and cable networks are expected to show the greatest overall profitability in the sector, at 40 percent and 36 percent respectively, according to the study, titled “Spotlight on Profitable Growth: Media & Entertainment.”

Comcast, Time Warner Cable, Charter Communications and Cox Communications are the largest U.S. cable operators. QVC, ESPN, HBO, HSN and TNT are the top cable networks.

Interactive media (34 percent), information services (30 percent), electronic games (28 percent), satellite TV (25 percent), broadcast TV (21 percent) and film and TV production followed (14 percent).

The media and entertainment sectors measured by EY are expected to have a 2015 estimated profit margin of 28.3 percent, better than most stock market indices, the London-based professional services firm reported.

Two main factors are driving the sector’s growth and profitability, according to John Nendick, who heads EY’s Global Media & Entertainment unit — one high-tech, the other traditional.

“The evolution of the industry continues to focus on the exploitation of digital distribution and finding new and innovative ways to reach and interact with the consumer,” he said. “With surging demand for content, M&E companies are growing their profitability through multiple consumer offerings, better knowledge of consumer tastes and preferences and continued international expansion.”