Study: Hollywood Companies More Profitable Than S&P 500 Average
An Ernst & Young study reveals that the industry overall is delivering profit margins better than the average, but some sectors aren't faring as well
This story first appeared in the Sept. 26 issue of The Hollywood Reporter magazine.
Hollywood studios might be laying off staff, but their corporate owners are generating strong profits. Entertainment and media, lumped together, historically has been one of the more profitable U.S.-based industries, and 2014 should be no exception.
An Ernst & Young study released Sept. 15 reveals that the so-called E&M industry will deliver profit margins this year of 28 percent, a full percentage point better than the S&P 500 average.
But not all areas of the industry are thriving. The study shows that while cable operators -- including Comcast, Time Warner Cable and others -- are delivering 41 percent profit margins, film and TV production lag and the still-struggling music industry falls far below the S&P average at 11 percent. Most promising, says the study, margins are expected to grow as industry companies "gain scale in content production and distribution, divest underperforming businesses and continue to benefit from the proliferation of digital platforms."