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.
Given the large number of companies we serve worldwide, we felt we could best serve industry professionals by offering an in-depth look at what’s going on in the industry in both the U.S. and Europe. Our analysis is focused around three key financial benchmarks – revenue, profitability and cash – drawing comparisons between key media subsectors and between the US and Europe.
Global Overview: How did we get here?
#1: Revenue is growing globally led by Advertising and Communications activities
#2: Profitability stalled, while net income increased
#3: How media companies are using their cash
What does the Future Hold?
Throughout the barometer we have also provided insight into the major risk factors affecting media companies today.
The good news is that we found that the media industry continues to grow! After a rocky period following the 2008 financial crisis, the media industry seems to be righting itself. The U.S., in particular, is experiencing strong growth with 2012 revenue up at least 7% over the prior year. The majority of this growth comes from new media companies such as Facebook, Google and eBay. That said, challenges certainly remain for U.S. and European-based companies as they face greater regulatory requirements, difficulty with identifying customer demand for new products and responding to their ever-changing preferences.
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.
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.
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.