Over the last ten years, the media industry has seen revolutionary changes, particularly in the areas of consumer behavior, the rise of global internet connectivity, developments in mobile telephone and tablet usage and a marked increase in user-produced content. Media companies seized the opportunities presented by this new wave of digitalization, rethinking their business strategies to ensure steady growth. The third edition of our annual media barometer discusses changes in this fast-moving industry, analyzing performance in three key areas: revenue, profitability and cash.
“The main issue for media groups in 2015 will be effectively integrating continuously evolving digital technology, especially in terms of their ability to release content on all devices in real time.”
Guillaume Devaux, Partner in France
For the purpose of this barometer, Mazars analyzed the performance of the 100 largest publicly-listed media companies in North America and Europe.
“In a multi-connected environment, the smartphone is clearly a growth driver for media companies, especially the ability to identify geographic location, which allows advertisers to manage their placement more easily and efficiently,”
Victor Wahba, Partner in US
Revenue of the media industry as a whole continued to thrive, with an increase of 5%, in spite of unfavorable worldwide economic conditions. However, the performance gaps between European and North American markets and major and other media companies are widening. Some companies also experienced shrinking profit margins as a result of implementing a new digital strategy - often less profitable initially, while revenue streams and general processes get up to speed.
Our Mazars Media Team conducted a detailed analysis of the major risk factors affecting media companies. These companies must adapt quickly, in response to the new business models emerging from ongoing digitalization, while also facing new risks regarding disclosures in their annual reports.
General context: the economic crisis and new technology
Part 1: Strong sales stimulated by developing technology
Part 2: Profitability improving in North America; Europe struggling
Part 3: How are media companies using liquid assets?
What does the future hold? Increased convergence between activities in media
The Mazars Media, Information & Entertainment Group brings together experienced professionals from around the world, with focused industry expertise in the media sector. We provide tailored audit, tax and advisory services to a range of clients, many of which are international media groups.
Global Transition in the Age of Digital Media is the second edition of our annual barometer in the Media industry. It offers a good snapshot of where the industry was, where it is now, and where it’s going. This year, we have extended our analysis to the 100 largest U.S. and European listed media companies and complemented our results with a review of their risk factors.
Although many media group executives expected a year of economic recovery and the end of the downturn, the sovereign debt crisis put an end to these hopes. The downgrading of the U.S. credit rating, the Fukushima catastrophe, austerity measures and an unstable geopolitical environment have only intensified uncertainty in the financial markets.