Despite rampant complaints about spiraling programming costs, cable-industry profit margins are expected to finish 2014 at 41.3 percent, up from 40.7 in 2013, the best performance in five years.
The data comes courtesy of EY (formerly known as Ernst & Young), which found that earnings before interest, taxes, depreciation and amortization (EBITDA) for cable companies is the strongest for the 10 media and entertainment sectors the accounting and consulting giant tracked. (Hat tip to Deadline Hollywood's David Lieberman for uncovering the report.)
Driven by the proliferation of broadband services, cable profitability surpassed that of cable-programming networks (projected at 37 percent for 2014, down narrowly from 37.2 percent in 2013, thanks to a slower ad market), interactive media (up a full percentage point, to 35.8 percent), electronic games (up 1.5 percentage points, to 28.8 percent) and big media conglomerates (26.3 percent, up from 25.6 percent).
At the bottom of the list: film and TV production (12.1 percent, up from 11.4 percent) and music (11.1 percent, up from 10.8 percent).
Overall, the media and entertainment sector is projected to have an aggregate profitability of 28 percent in 2014, according to EY, outperforming the London Stock Exchange's FTSE 11, the S&P 500 and Japan's Nikkei.
Notable: Comcast (NASDAQ: CMCSA) was excluded from EY's cable category and placed into the media-conglomerates category.
For more:
- read this Deadline Hollywood story
- read this Variety story
Related links:
Dish serves up Q2 profit on 5.7% revenue growth, sub losses slow to 44K
Charter Q2: Video subscriber losses slow to 29K
Cablevision's video losses accelerated to 28K in Q2 thanks to FiOS