Music Industry Margin Growth Worst Among Media & Entertainment (Research)
Source: "Spotlight on Profitable Growth: Media and Entertainment" by Ernst & Young.

For the first time in five years, the media and entertainment industry is expected to outperform the major stock market indices in 2013, according to a report from EY, a consulting firm formerly known as Ernst & Young.

Unfortunately, the music industry was not responsible for this achievement, having turned in the lowest margin growth of all 10 media and entertainment sectors examined, worst even than the sector that includes newspapers and magazines, which have seen its share of woes in the transition to digital media. 

Topping the list of fast-growing sectors between 2009 and 2013 is "interactive media," which includes companies such as Facebook, LinkedIn, Google, Baidu, Yahoo and Tencent. This is followed by games, film and television production and cable operators. Music, which has maintained a compounded annual growth rate (CAGR) for its margins of around 10%, gained just 1% margin growth over the last five years, while interactive media grew 22% and games gained 14%. The chart shows earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of operational profitability, rather than actual bottom line net income.

Below is a chart showing how these 10 sectors' combined profit margin stack up against the major stock market indices between 2009 and 2013. For 2013, estimated profit margin for media and entertainment is expected to be 26%, compared with 24% for the S&P 500 Index; 23% for the FTSE 100 Index; 18% for the CAC 40 Index; 16% for the DAX 30 Index; and 12% for the Nikkei Index.

Source: "Spotlight on Profitable Growth: Media and Entertainment" by EY.