IBISWorld Industry Report Internet Publishing and Broadcasting in The US 2018

WWW.IBISWORLD.
COM Internet Publishing and Broadcasting in the USNovember 2018 1
Going viral: Revenue is expected to continue

increasing as advertisement spending rises
This report was provided to
Edeska (2129455405)
by IBISWorld on 09 May 2019 in accordance with their license agreement with IBISWorld
IBISWorld Industry Report 51913b

Internet Publishing and
Broadcasting in the US
November 2018 Jonathan Hadad
2 About this Industry 18 International Trade 33 Operating Conditions

2 Industry Definition 19 Business Locations 33 Capital Intensity
2 Main Activities 34 Technology and Systems
2 Similar Industries 21 Competitive Landscape 35 Revenue Volatility
3 Additional Resources 21 Market Share Concentration 36 Regulation and Policy
21 Key Success Factors 37 Industry Assistance
4 Industry at a Glance 22 Cost Structure Benchmarks
24 Basis of Competition 38 Key Statistics
5 Industry Performance 24 Barriers to Entry 38 Industry Data
5 Executive Summary 26 Industry Globalization 38 Annual Change
5 Key External Drivers 38 Key Ratios
7 Current Performance 27 Major Companies 39 Industry Financial Ratios
10 Industry Outlook 27 Facebook Inc.
12 Industry Life Cycle 28 Alphabet Inc. 40 Jargon & Glossary
29 Netflix Inc.
14 Products and Markets 30 Apple Inc.
14 Supply Chain 31 Oath Inc.
14 Products and Services 32 Spotify AB
16 Demand Determinants 32 Twitter Inc.
16 Major Markets 32 Hulu LLC
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

WWW.IBISWORLD.COM Internet Publishing and Broadcasting in the USNovember 2018 2
About this Industry
Industry Definition This industry includes organizations and consumers. In addition, companies may
individuals that offer nonphysical derive revenue from intellectual property
products, such as news, music and video, licensing and the sale of user information
exclusively through the internet. Revenue to third parties. This industry does not
in this industry is derived from the sale of include search engines, internet service
advertising space or subscriptions to providers or publishers of offline content.
Main Activities The primary activities of this industry are

Online video sharing and broadcasting
Internet-based radio broadcasting
Online news publishing
Social networking
Online comic publishing
E-book publishing
Internet forum publishing
Podcast publishing
Online advertising
The major products and services in this industry are

Ad-driven content
Intellectual property licensing
Paid content
Other
Similar Industries 51212 Movie & Video Distribution in the US

Companies in this industry distribute movies and videos through offline channels.
51511 Radio Broadcasting in the US

Companies in this industry broadcast music and other radio programs over radio waves, rather than over the
internet.
51911 News Syndicates in the US

Companies in this industry distribute news and other information for offline publication.
51711d Internet Service Providers in the US

Companies in this industry provide internet access to consumers and businesses.
45411a E-Commerce & Online Auctions in the US

Companies in this industry sell products and services over the internet.
51913a Search Engines in the US

Companies in this industry direct a large portion of traffic on the internet and generate their revenue from
advertising.
Provided to: Edeska (2129455405) | 09 May 2019

About this Industry
Additional Resources For additional information on this industry

www.comscore.com
Comscore
www.iab.com
Interactive Advertising Bureau
www.quantcast.com
Quantcast
IBISWorld writes over 1000 US

industry reports, which are updated
up to four times a year. To see all
reports, go towww.ibisworld.com

WWW.IBISWORLD.COM Internet Publishing and Broadcasting in the US November 2018 4
Industry at a Glance
Internet Publishing and Broadcasting in 2018
Key Statistics Revenue Annual Growth 13–18 Annual Growth 18–23

Snapshot
$124.7bn 13.7% 14.1%
Profit Wages Businesses
$31.6bn $45.0bn 82,483

Revenue vs. employment growth Internet traffic volume
Market Share
Facebook Inc. 30 500
36.0%
25 400
Exabytes per month

Alphabet Inc.
20 300
% change
26.3%
Netflix Inc. 15 200
11.7% 10 100
Apple Inc.
5 0
10.0% Year 10 12 14 16 18 20 22 24 Year 10 12 14 16 18 20 22 24
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 27
Products
Products and
and services
services segmentation
segmentation (2018)
(2018)
4.1%
4.1%
Key External Drivers Intellectual
Intellectual property
property licensing
licensing
Internet traffic volume
13.0%
13.0%
Number of mobile Other
Other
internet connections
Total advertising
expenditure
Number of broadband
connections 55.8%
Ad-driven
Ad-driven content
content
27.1%
27.1%
Paid
Paid content
content
p. 5
Industry Structure Life Cycle Stage Growth Regulation Level Light

Revenue Volatility Medium Technology Change High
Capital Intensity Medium Barriers to Entry Low
Industry Assistance None Industry Globalization Low
Concentration Level High Competition Level High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 38

Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive Summary The Internet Publishing and devices give users the ability to access the
Broadcasting industry, which comprises internet from virtually anywhere, which
organizations and individuals that offer has significantly increased the industry’s
nonphysical products exclusively through reach. The number of mobile connections
the internet (not including search is expected to rise at an annualized rate
engines), has grown significantly over the of 11.1% during the period, contributing
five years to 2018. IBISWorld estimates to the 23.2% annualized growth rate in
that industry revenue has grown at an internet traffic volume during the same
annualized rate of 13.7% during the period. However, industry-wide average
five-year period, including a 10.5% rise in profit margins have remained at or close
2018, to $124.7 billion. The industry has to 2013 levels, as the industry has been
experienced tremendous growth hit with expensive depreciation costs;
these costs stem from high capital
expenditures into data centers and other
The
internet’s growing share of advertising systems used to control and manage the
expenditure is expected to propel the increasingly high traffic volume.
Over the five years to 2023, revenue is
industry forward expected to continue increasing as
advertisement spending continues to
throughout the period, as both the transition from traditional means to the
number of users and time spent online internet and mobile devices. As a result,
have dramatically increased. These industry revenue is expected to grow at an
increases have paved the way for annualized rate of 14.1% to $241.4 billion
companies to earn more revenue through over the next five years. While many large
the industry’s two main revenue streams: services will experience a slowdown in user
advertising (55.8% of total revenue) and base growth because of saturation, the
sales of subscription-based services internet’s growing share of advertising
(27.1% of total revenue). expenditure is expected to propel the
A key driver of the industry’s strong industry forward. These major players are
growth is the rapid rise in the number of expected to continue capturing a large
mobile internet connections. Mobile portion of new advertising revenue.
Key External Drivers Internet traffic volume Number of mobile internet connections
As overall internet traffic volume increases, The number of people accessing the
the popularity and overall time spent on internet via mobile connections has
the internet also increases, which makes grown rapidly. Mobile platforms have
internet-based advertising more appealing. presented another way for content
However, as content has become more publishers and broadcasters to sell
bandwidth intensive, internet traffic has advertising space, subscription-based
become less reliable as a surrogate for content or games and apps for a fee.
advertising volume. Nonetheless, this The number of mobile internet
industry benefits from increasing internet connections is expected to increase in
users and traffic. Internet traffic volume is 2018; however, it is approaching
expected to increase in 2018, representing saturation, representing a potential
a potential opportunity for the industry. threat to the industry.

Key External Drivers Total advertising expenditure new advertising money. Total advertising
continued Total advertising expenditure represents expenditure is expected to increase
the sum of measured US advertising in 2018.
expenditure and an estimate of
unobserved US advertising expenditure, Number of broadband connections
such as direct mail, sales promotions, The number of people with access to the
catalogs and business publications. internet via broadband connection has
Advertising is the primary method of grown rapidly over the years leading up
generating revenue for internet to 2018 and will continue to grow in the
publishers. When advertisers increase near future. As more people have access
their budgets, internet publishers to the internet, traffic volume increases,
generally benefit, especially because this which promotes ad spending and
industry captures a significant share of industry growth.
Internet traffic volume Number of mobile internet connections
600 600
500 500
Exabytes per month
400 Million 400
300 300
200 200
100 100
0 0
Year 10 12 14 16 18 20 22 24 Year 10 12 14 16 18 20 22 24

Current The Internet Publishing and Broadcasting

industry comprises companies and Industry revenue
Performance individuals that offer nonphysical products,
30
such as news, music and video (search
engines are not included in this report) to 25
customers using internet-connected devices.
The industry is heavily reliant on 20
% change
consumers’ access to the internet and
internet-connected devices. While 15
broadband internet availability is

10
approaching saturation in the country,
mobile internet devices have exploded in 5
popularity, contributing to the industry’s Year 10 12 14 16 18 20 22 24
strong growth. IBISWorld estimates that the
number of mobile internet connections in SOURCE: WWW.IBISWORLD.COM
the United States has increased at an

annualized rate of 11.1% to 333.5 million during the period, rising to an estimated
over the five years to 2018. 82,483 companies in 2018. Furthermore,
Industry revenue is expected to rise at an employment has increased at an
annualized rate of 13.7% during the five-year annualized rate of 12.3% during the
period, including a 10.5% rise in 2018, to period to an expected 313,816 people.
$124.7 billion. The growing industry has Finally, profit is expected to stay at or
provided new opportunities to near 2013 levels, as lower wage costs has
entrepreneurs, as new enterprises entered been offset by rising purchases and
the industry at an annualized rate of 14.8% depreciation expenses.
Mobile platforms spur Internet-connected smartphones and tablets trends among new startups, as users are
growth have given consumers access to the entire increasingly spending more time on
internet while on the go, which has provided mobile devices.
new revenue streams and opportunities for As with traditional online content,
companies. However, new challenges have operators generate the majority of their
risen from this shift, as some companies revenue from mobile devices through the
have struggled to develop or implement sale of advertising. Internet advertising
successful mobile advertising strategies. enables advertisers to reach a specific and
Traditional web-first companies such targeted consumer, one that fits a typical
as YouTube LLC (YouTube), Facebook buyer of that company’s products. A study
Inc. (Facebook) and Twitter Inc. by Nielsen has concluded that as a result of
(Twitter) have seamlessly and this direct marketing, some advertisers can
successfully developed their programs expect an almost $3.00 incremental sales
into mobile applications. Other return for every $1.00 spent on targeted
companies, such as WhatsApp Inc., digital advertising. As advertisers continue
Instagram and Snap Inc. exploited new to realize the potential in internet
opportunities brought by the mobile advertising, coupled with increasing time
revolution and developed programs spent on mobile devices, mobile advertising
designed for mobile devices only, initially spending is surging. According to the latest
forgoing website production altogether. available data from the Interactive
Mobile-first and mobile-only are ongoing Advertising Bureau, US mobile advertising

Mobile platforms spur revenue rose 36.2% in 2017, reaching a total

growth continued of $49.9 billion.
Content producers About one-third of industry-related revenue

is derived through paid content, typically Videostreaming services
through subscription services. Although the
subscription-based business model is not
have been forced to become
limited to TV or movie streaming, players in the network and produce
this segment have had considerable success. their own shows
For example, Netflix Inc. (Netflix) has been
able to grow its revenue at a high rate by
offering a wide variety of TV and movie Also, traditional media companies are
programming, while increasing its customer increasingly pulling shows and movies off
base about five-fold since 2013. Competitors these platforms and launching their own
Hulu LLC (Hulu) and Amazon.com Inc. standalone service. The Walt Disney
(Amazon) have also had success, stemming Company, for example, announced in
from exclusive content offered by both 2018 that it will stop distributing through
companies. Netflix and launch its own service; the
Though once middlemen between company is currently awaiting ruling
production companies and viewers, the big from the US Securities and Exchange
three of online video streaming, Netflix, Commission (SEC) on its proposed
Hulu and Amazon, have increased focus on acquisition of 21st Century Fox, which
creating original and exclusive content. The would give it majority control of Hulu.
three companies had 125 Emmy Other networks, including Time Warner
nominations in 2018 combined, with Netflix Inc.-owned HBO and CBS Corporation’s
leading the pack at 91 nominations. Shows Showtime have announced or launched
including Stranger Things (Netflix), The internet-only streaming services. To
Handmaid’s Tale (Hulu) and Goliath compete with traditional networks that
(Amazon) are produced and only available are increasingly infiltrating online
by subscribing to that service. By creating companies’ platforms, video streaming
original content, these companies are services have been forced to become the
providing even more incentive for network and produce their own shows
customers to subscribe to their channel. and movies.
Booming internet The sale of advertising space generates an estimated $88.0 billion in 2017.
advertising an estimated 55.8% of revenue for Internet advertising is unique because it
internet publishers and broadcasters. enables advertisers and companies to
Therefore, trends in internet advertising speak directly to specific consumers who
play a substantial role in industry fit their target market, unlike traditional
performance. Total advertising advertising methods which cater to the
expenditure increased moderately at an greater population. Google LLC (Google)
annualized rate of 4.2% during the and Facebook dominate this market, as
five-year period. However, spending on they have unparalleled access to
internet advertisements has surged consumer data and can match
105.6% between 2013 and 2017, rising to advertisers to relevant consumers.

Network effects Facebook, Twitter and YouTube have an alternative social network; a place for
found success as a result of one millennials to socialize with friends
commonality: their networks. These without being monitored.
companies have created massive The ability for new operators to
networks of users who generate content, differentiate and distinguish themselves
including creating videos, uploading from large and established companies is
photos and other forms of entertainment more important in this industry than in
to stimulate conversation and social traditional businesses, such as retail
engagement. These networks make it shops or restaurants. These large internet
difficult for upstarts to gain ground, as companies have the advantage of large
users are less likely to switch services networks that create a continuous loop;
from large networks that offer a wealth of as users sign up, the networks grow,
engaging content to small ones with a which keeps users coming back.
limited user base. However, small Alternatively, upstarts contend with
services that cater to a niche or social challenges in acquiring first-time users
trend have found some success. For and even steeper challenges retaining
example, WorldStarHipHop.com is a them, as users flee to more established
video-content website similar to networks. This environment accurately
YouTube, except it targets users reflects the industry’s medium market
interested in hip-hop music and videos. concentration, as large companies are
Similarly, mobile application Snapchat better prepared to grow and small
was able to compete against Facebook companies experience extremely
and Twitter because it branded itself as challenging barriers to success.
Privacy concerns Financial statements and quantitative

assessments show an extremely strong Industrycompanies have
and durable industry. However, over the
past year, industry companies have come
come under scrutiny for
under scrutiny for privacy and privacy and advertising
advertising practices. For example, in practices
early 2018, Facebook experienced a
scandal as political consulting firm
Cambridge Analytica Ltd. was able to Google+ platform. The consumer
access and use millions of users’ data. version of Google+ is now expected to
The firm was able to use a loophole in shut down.
Facebook’s application program interface In May 2018, the General Data
(API), which exposed users’ data. While Protection Regulation (GDPR), a
Facebook CEO Mark Zuckerberg wide-ranging privacy law, was put into
contended with intense questioning on effect in the European Union as a
Capitol Hill, the federal government has response to rising privacy concerns.
yet to implement new laws pertaining to Though this law pertains to residents
privacy. While many began looking at of the EU, some companies have
Facebook-rival Google as the mature updated privacy standards worldwide
older brother, Google ran into trouble of to reflect the change. Meanwhile in the
their own in October of 2018, after it US, there is increased pressure from
announced a security breach of its Congress on technology companies.

Industry Over the five years to 2023, the Internet

Publishing and Broadcasting industry is
advertising dollars will continue to
migrate over to the internet, where
Outlook projected to continue growing at an marketers find more success targeting
annualized rate of 14.1% to $241.4 billion specific users, as opposed to displaying
in 2023. During the period, internet generic ads for the general public.
usage, measured by the amount of Profit is expected to increase in the
information transmitted per year, is coming years as startups begin to
expected to grow at an annualized rate of mature and generate positive cash
21.7% as the number of internet flow, and larger companies continue to
connections increase and people spend gain strength and generate
more time on the internet. Further, more profit.
Major players will Over the next five years, the industry will
remain dominant continue to be dominated by large, Small
and independent
horizontally integrated players and small,
independent publishers. As major players
publishers are expected
become more dominant, it will become to continue to enter the
even easier for them to maintain their industry
competitive edge because they have
strong reputations. They offer users
strong networks and advertisers a wide continue to enter the industry over the
user base. Strong networks will promote next five years. Consequently, the
user base growth, which will bolster number of enterprises is forecast to
revenue to even greater heights. increase at an annualized rate of 18.2% to
Similarly, large companies’ use of 190,302 companies over the five years to
complex algorithms will continue to help 2023, which is indicative of the industry’s
guide advertisers to perfect consumer, low barriers to entry. However, the
which will further promote digital ad long-term viability of these companies
spending on the largest platforms. As the hinges on their ability to attract internet
major players move the industry forward, traffic to their site. To succeed, small
it is expected that industry employment players must develop targeted, original
will rise at an annualized rate of 15.4% to content that holds the interest of internet
an estimated 642,234 people over the five users. To do this, many will focus on
years to 2023. niche markets. However, most of these
While major players will continue to small, new entrants will likely only
dominate the industry, small and generate modest revenue or be forced to
independent publishers are expected to exit the industry.
Mobile will change Mobile content (e.g. articles, games, to target this market even more
the landscape photos and videos) has become aggressively than in previous years. Over
commonplace with the rise of internet- the five years to 2023, it is estimated that
connected smartphones and other spending on mobile advertisements will
devices. As the number of mobile internet grow more than twice as fast, since
connections is expected to rise over the nonrelated services such as search
next five years, advertisers are expected engines capture a part of this spending;

Mobile will change industry growth is not directly would take six minutes using a 4G
the landscape correlated with the surge in spending on network could take 15 seconds with the
mobile advertisements. new network. Also, major wireless
continued
Mobile internet connections enable carriers Verizon Wireless, AT&T Inc.,
consumers to spend more time on their T-Mobile US Inc. and Sprint
favorite websites and enable advertisers Corporation have all introduced
to increase their engagement with unlimited data plans, which will further
consumers. Content publishers that increase mobile internet connections, as
design mobile applications with customers are not restricted by data
advertising in mind will be able to cash in limits or hit with surcharges.
on this trend. Interacting with mobile As mobile internet connections offer
users via text message and media-rich faster speeds, industry companies will
advertisements are two advertising reap the rewards. For example,
trends that content providers are customers will be able to stream TV
implementing into their apps and shows and movies at faster speeds and
websites. As these numbers continue to without data restrictions, earning
grow, internet publishing and companies such as Netflix Inc., Hulu LLC
broadcasting will be increasingly and Amazon.com Inc. more users.
formatted for mobile content. Additionally, the 5G network will
Recent advancements in internet increase the reliability and usability of
connectivity technology will also promote mobile live TV, bolstering the segment as
growth in this segment. Fifth-generation new startups enter the field and existing
mobile networks, more commonly known companies begin to offer live services on
as 5G, will be implemented across the mobile devices. Finally, faster connection
United States starting in 2018, which will speeds will promote video
dramatically increase connection speeds advertisements, an already growing
on mobile devices. For example, Verizon revenue stream for industry companies,
Communications Inc. (Verizon Wireless) as the 5G network will decrease lag time
5G tests have shown a connection speed and create more assurances for
50 times faster than the current 4G advertising companies that consumers
network, meaning that a download that will be able to access their ads.

Life Cycle Stage Industry value added is expected to increase at a
faster rate than real GDP over the 10 years to 2023
Technological innovations favor industry growth
The number of operators in the industry is increasing
Companies are rapidly building and transitioning
to internet advertising campaigns

Industry Life Cycle As a result of the growing number of makes it even more attractive to
internet advertising campaigns, internet companies looking to control their public
traffic volume and the increased use of identity. Corporations are increasingly
This industry mobile devices, the Internet Publishing funneling that profit into this industry in
is G
rowing and Broadcasting industry is booming. an effort to better define their brands.
Industry value added (IVA), which Such expenditures represent a major
measures an industry’s contribution to opportunity for players looking to
the overall economy, is expected to capitalize on this growing market.
increase at an annualized rate of 13.9% The growth in the number of
over the 10 years to 2023. In contrast, US platforms from which consumers can
GDP is projected to grow at an access internet content, such as mobile
annualized rate of 2.2% during the same phones and tablet computers, is also
period. This industry is still in its growth expanding opportunities for companies
stage, as technology is rapidly changing to capture new markets. With platform
and evolving, and new devices are proliferation expected to continue,
constantly being brought to market. industry operators will continue to find
New companies are continually untapped markets in which to compete.
entering the market, while operators Although the industry’s major players
from other industries with abundant wield a significant advantage in terms of
resources are investing heavily in this public familiarity and spending power,
industry in an effort to capture some advances in technology continue to
portion of its revenue growth. Over the enable smaller players to enter the
10 years to 2023, the number of industry industry and capture niche audiences.
enterprises is forecast to increase at an For example, the rapid proliferation of
annualized rate of 16.5% to reach 190,302 mobile phones and tablet computers has
companies in 2023. Beyond the revenue created a lucrative and highly
numbers, this industry’s increasing fragmented market in the development
relevance as an arbiter of public opinion of mobile applications.

Products & Markets

Supply Chain | Products and Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain KEY BUYING INDUSTRIES

33611a Car & Automobile Manufacturing in the US
The automotive industry is the third largest buyer of online advertising.
44-45 Retail Trade in the US
Retail trade is the largest buyer of online advertising.
51791a Telecommunications Resellers in the US
The telecommunications industry is the fourth largest buyer of online advertising.
52 Finance and Insurance in the US
The financial services industry is the second largest buyer of online advertising.
9901 Consumers in the US
The general public consumes the content produced by internet publishers and broadcasters.
KEY SELLING INDUSTRIES

33421 Telecommunication Networking Equipment Manufacturing in the US
Larger companies build their own data centers with equipment purchased from this industry.
51121 Software Publishing in the US
This industry provides software used by internet publishers to create and publish their content.
51711d Internet Service Providers in the US
Internet publishers pay companies in this industry for internet access.
51821 Data Processing & Hosting Services in the US
Companies in this industry provide website hosting services for internet publishers.
Products and Services Products and services segmentation (2018)

4.1%
Intellectual property licensing
13.0%
Other
55.8%
27.1% Ad-driven content
Paid content
Total $124.7bn SOURCE: WWW.IBISWORLD.COM
The Internet Publishing and licensing provides a relatively small

Broadcasting industry is responsible for a portions of revenue.
wide array of products, some of which
can be difficult to differentiate. However, Ad-driven content
the majority of industry revenue can be The majority of industry operators
broken down into advertising and deliver content to consumers at no cost.
subscriptions, while intellectual property These websites use the sale of advertising

Products & Markets
Products and Services space as their primary revenue stream. expected to continue to grow over the next
continued The sale of advertising space accounts for five years due to the proliferation of websites
an estimated 55.8% of industry revenue. that publish their own content and the
Online advertising takes many forms. In ongoing transition to internet advertising
the context of internet publishing, the that many companies are making.
most common forms include the banner
ad (block of space usually adjacent to Paid content
content); the in-text ad (where certain Paid content accounts for an estimated
words are automatically linked to a 27.1% of industry revenue and consists of
sponsoring website); the interstitial ad digital media that requires a user to pay
(which occupies the entire browser, in exchange for access. Some operators,
usually for a certain period of time); the particularly old-media newspapers that
pop-up and pop-under ads (which open have seen revenue decline, have
new windows containing advertising embraced the paywall as a means of
either in front of or behind the active securing revenue. The New York Times,
browser window); and the wallpaper ad The Wall Street Journal and Financial
(which takes over the background of the Times are all newspapers that offer
hosting page). A new ad that is growing limited or no access without a paid
in popularity among advertisers and subscription. However, these companies
ad-selling platforms is the video ad, fall outside the scope of the industry as
similar to a commercial shown on TV. they do not solely publish on the internet.
The common trait among all The paywall strategy is less popular
advertisements is that they take among internet-only operators. However,
advantage of the internet’s most basic some operators including Spotify and
tool, the clickable hypertext link. Users Pandora offer multiple options to users,
are encouraged to click the ad to be including a free service and an ad-free
brought to where they might buy premium service.
something, or at least learn more about The most crucial distinction to make in
the product or service being advertised. this category is whether the paid content
The two main metrics in determining is offered a la carte or by subscription. A
advertising costs are cost per click (CPC, la carte refers to content being purchased
where advertisers are only charged when individually; the most popular
an ad is clicked on) and cost per implementation of this is Apple Inc.’s
impressions (CPM, where advertisers are iTunes Store, where users can purchase
charged based on the number of views an one song or one album. However, growing
ad receives). in popularity among consumers are
Popular companies that garner subscription services, which generally offer
revenue from advertisements include unlimited access to a library of content for
Facebook Inc., Google LLC, YouTube a specified period of time in exchange for
LLC, Oath Inc. and numerous others. payment. Netflix Inc. and HBO GO are
Large operators who have been able to examples of providers of this sort of
collect and analyze user data have been service. Over the five years to 2023, this
the most successful in generating ad segment’s share of revenue is expected to
revenue, as these companies are able to remain relatively constant as growth stays
more effectively target particular users as in line with overall industry growth.
requested by advertisers. Targeting
enables advertisers to focus their ad Intellectual property licensing
dollars on users who are more likely to The Internet Publishing and
buy their product. This segment is Broadcasting industry generates an

Products & Markets
Products and Services estimated 4.1% of total revenue from companies in this industry and cover
continued the licensing of rights to use technologies that internet publishers
intellectual property. Generally, these would like to obtain without threat
licensing requests are between two of lawsuit.
Demand Demand for the Internet Publishing and advertising strategies, which should
Determinants Broadcasting industry is largely cause demand for online advertising to
determined by internet preferences, grow at a faster rate than demand for
internet access and advertising activity. advertising in general. This trend is
This industry has experienced reflected in the exceptional growth of
extraordinary growth since its inception online ad revenue over the past five years.
because it offers a tremendous value Demand for content that consumers
proposition to its users: after an initial explicitly pay to access is more difficult to
expense for the computing hardware and quantify. While demand for internet
network connection required to access video, music and other content is strong,
the internet, an enormous wealth of consumers have increasingly turned to
information and entertainment is piracy as a convenient and free way of
available free of charge. Faster internet acquiring internet content. Despite this,
connections have facilitated access to major player Apple Inc. (Apple) has
online content and increased demand. experienced enormous success and
Also, over the five years to 2018, mobile increased demand from its iTunes Store
computing devices have surged in over the past five years. However, while
popularity, which has increased consumers’ the iTunes Store has shown that
time spent on the internet and opened up consumers are willing to pay for
new avenues of media. As more people use convenience and quality control, it has
mobile devices and connect to the internet, not demonstrated that they are willing to
more content will be produced, which pay much. Moreover, a great deal of the
increase time spent online and increase store’s success is due to the popularity of
demand for advertisers. Apple’s devices, such as the iPod, iPhone
Advertising expenditures generally and iPad. Successful examples of other
grow in line with GDP. However, older paid-content systems are rare. Many
industries with significant advertising operators struggle to achieve profitability
expenditure are increasingly when confronted with the costs of
incorporating new media into their licensing the content they offer.
Major Markets As a predominately advertising-driven revenue. While most content on the

industry, the market for internet internet is freely distributed and ad-
publishing and broadcasting is most supported, a survey by the Pew Internet
efficiently described by two major groups: and American Life Project stated that
consumers who pay for content and 65.0% of internet users reported paying
advertisers who buy ad space. to access or download some kind of
online digital content. Music was the
Consumers most popular paid product, with 33.0% of
Consumers that pay for online content respondents claiming to have paid for
represent an estimated 27.1% of industry music online. Of those that paid for

Products & Markets
Major Markets Major market segmentation (2018)

continued
6.6%
Telecom advertisers
8.7%
Automotive advertisers
9.5%
32.8%
Other advertisers
Financial services advertisers
15.3%
Retail advertisers
27.1%
Total $124.7bn Consumers
online products, 66.0% use only one Financial services advertisers

payment method; users in general tend to The financial services sector includes
prefer subscription models rather than investment banks, commercial banks and
paying for individual products. The insurance agencies, among other
average monthly expenditure for paid institutions; companies like State Farm
content is estimated at $10.0 per user. Mutual Automobile Insurance Company,
While consumers are becoming more The Progressive Corporation and Bank of
comfortable with online commerce, those America Corporation are all included. The
paying for online content are typically financial services sector’s internet
older users. Over the next five years, this advertising expenditure constitutes an
market as a percentage of revenue is estimated 9.5% of industry revenue. The
expected to remain relatively constant; significant amount spent by the sector is
however, online piracy, particularly due to the utility that the internet offers in
among younger generations, will remain facilitating financial services. Websites are
a key threat to revenue for the paid- very effective as vehicles for the display and
content market. transmission of financial data and orders.
As a result, the internet is the primary way
Retail advertisers individual consumers buy and sell stocks
The largest buyer of internet advertising and obtain car insurance quotes.
is the retail sector, accounting for an
estimated 15.3% of industry revenue. A Automotive advertisers
large proportion of such advertising Automotive advertisers account for an
comes from online retailers that are able estimated 8.7% of industry revenue.
to directly track the efficiency with which Companies have moved their advertising
ad views are converted into clicks and revenue away from old media and toward
then into sales; therefore, these the internet, particularly over the past
companies derive the most value from five years. Individuals are increasingly
internet-based advertising. The share of turning to the internet to determine the
advertising revenue from this sector has brand of automobile to purchase; as a
expanded over the past five years, as result, car companies are advertising
consumers have become more online to more effectively reach their
comfortable making purchases online. potential customer base.

Products & Markets
Major Markets Telecom advertisers include: leisure travel, consumer

continued The fourth largest online advertiser is the computing and electronics, consumer
telecom sector, comprising an estimated packaged goods, pharmaceutical and
6.6% of total industry revenue but healthcare, media and entertainment.
trending downward. Given that almost all Leisure travel companies generate an
internet users are implicitly buyers of estimated 5.4% of industry revenue and
some form of network connectivity, largely consist of internet-based travel-
advertisers see reason to target internet service providers. The consumer
users with connectivity products. The computing and electronic products sector
downward trend in telecom’s portion of generates an estimated 4.7% of industry
overall internet ad revenue is more a revenue, as individuals that use the
reflection of a growing market already internet are necessarily users of
saturated with telecom advertising than computing products. The consumer-
an indication of decreasing expenditures packaged goods industry accounts for
by the sector. an estimated 4.0% of industry revenue
and derives similar utility from online
Other advertisers advertising as the retail sector. Other
There are several other economic sectors advertising sectors and estimates of
that contribute to industry advertising their revenue share include media with
revenue. All together, these sectors 4.0%, pharmaceutical and healthcare
account for 32.8% of revenue. Some of with 3.4% and entertainment
the larger categories in these sectors with 2.7%.
International Trade This industry is not involved in the international operations and generate
international trade of any goods or billions of dollars in revenue from outside
services. However, internet publishing of the United States. For more
and broadcasting is a global enterprise information on the industry’s
and US sites frequently attract visitors international trends, please refer to the
from other countries. Furthermore, the Industry Globalization section of
four major players in the industry have this report.

Products & Markets
Business Locations 2018
West
AK
0.1 New
England
ME
Great Mid- 0.3
Lakes Atlantic 1 2
NY 3
WA MT ND 11.1
5 4
3.9 0.1 MN
Rocky
0.2 1.4
WI
OR Mountains SD
0.2
Plains 0.9 MI
1.7
PA
2.5
6
7
1.8 ID IA OH 9 8
0.4 WY 1.9
0.3
NE
0.4
IL IN WV VA
3.6 0.8 2.5
West NV
0.4 0.1
KY
UT MO
0.7 NC
1.8
1.5 CO KS 1.0 2.2
3.1 0.6 TN
SC
Southeast
1.2
CA 0.6
23.5
OK AR GA
0.5 0.3 AL 2.6
AZ MS 0.5
1.6 NM
0.2 Southwest 0.2
TX LA
0.5 FL
5.5 6.5
West Establishments (%)
HI Less than 3%
0.2 Additional States (as marked on map) 3% to less than 10%
1 VT 2 NH 3 MA 4 RI 10% to less than 20%
0.3 0.4 3.4 0.2 20% or more
5 CT 6 NJ 7 DE 8 MD 9 DC
1.1 2.2 0.6 1.5 1.0

Products & Markets
Business Locations While the internet can be accessed

Distribution of establishments vs.
increasingly from any geographical
establishments
location, large operators tend to be
40
located in desirable urban environments
with significant outputs of college
30
graduates and attractive living standards.
Silicon Valley and the San Francisco Bay
area generally feature the largest 20
%
concentration of businesses in the industry
due to the proximity of large, high-quality 10
learning institutions, such as Stanford and
UC Berkeley, and the overall high quality of 0
life in the area. Notably, all four major
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
players in the industry are headquartered
in California, which represents an
estimated 23.5% of all industry
establishments. In its entirety, the West Establishments
region accounts for an estimated 31.3% of Establishments
industry establishments. Other popular SOURCE: WWW.IBISWORLD.COM
locations include major urban centers like

New York City and Los Angeles, as well as Independent entrepreneurs looking
smaller cities with younger populations, to produce their own content for the
large universities and high quality of life internet can establish themselves
scores (e.g. Austin, TX). anywhere. However, these operators
Operators opening datacenters will take generally establish themselves near a
geographic concerns, such as the risk of hub for whatever industry they
natural disasters or the effect of climate on cover or wish to be a part of. For
cooling costs. In that vein, Facebook Inc. example, a fashion blogger would
recently built a new datacenter in Oregon, generally find more success
reasoning that the naturally occurring low establishing themselves near New York
humidity would enable the company to use City, as opposed to somewhere where
evaporative cooling rather than the fashion is not as popular or large of a
traditional chilled-air approach to cool its market. Besides the West region, other
servers, increasing efficiency and saving the regions and their share of
company money. Other concerns involved establishments include the Mid-
in the selection of sites for datacenters Atlantic (18.8%), the Southeast
include the cost of real estate and the (17.9%), the Great Lakes (8.9%), the
proximity to large peering exchanges where Southwest (7.8%), New England
the backbones (i.e. the principal (5.7%), the Rocky Mountains (5.5%)
connections) of the internet meet. and the Plains (4.1%).

Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share The Internet Publishing and Broadcasting more revenue on a per-user basis, as
Concentration industry is characterized by a high and companies have been able to increase the
growing level of market share concentration. number of ads each user sees, while also
In 2018, it is expected that the four largest increasing the cost per ad. Netflix Inc.
Level
companies combined to control 84.9% of (Netflix), which has a completely different
Concentration in industry revenue. Facebook Inc. (Facebook) business model than Facebook, has also
this industry is H
igh is the industry’s largest company, followed been able to generate more revenue per
by Alphabet Inc., through its YouTube and user; the company now offers differentiated
Google Network businesses. These two products for its customers, including a
companies, combining for 62.3% of the premium option for the entire family.
market, along with other major players, IBISWorld forecasts market share
often acquire smaller companies for patents, concentration to continue to climb in the
skill sets, features or to protect its brand upcoming years as larger and more
from a rising company that could eat away established companies continue to add users
at revenue or user base. This happened in and increase per-user revenue. These
2013 when Facebook attempted to acquire increases will result in stronger financial
Snapchat. Aware of the possibility that performances and drive revenue up. As
Snapchat’s success would take away from these companies continue to grow, the
time spent on its own platforms, Facebook barriers to success for startups looking to
attempted to buy out the then-two-year-old enter the fray increases dramatically.
company for $3.0 billion. As this takeover For example, startups looking to enter
bid failed, Facebook has instead added a the video-content segment will quickly
slew of features that mimic Snapchat’s most find major challenges in its ability to
popular features. offer as wide array of TV shows and
Over the five years to 2018, market share movies as larger competitors such as
concentration has been on the rise due to Netflix or Hulu LLC. Companies that
the rising popularity of streaming websites, cannot offer an improved or
social networks and other media platforms. differentiated experience will not be able
Companies have also been able to generate to attract users.
Key Success Factors Developing a clear niche Attracting advertisers

Websites live and die by the loyalty of their Advertising is the main source of
fans and their ability to keep consumers industry revenue. Unless a website
IBISWorld identifies interested in the site. Successful websites can convince users to pay subscription
250 Key Success cultivate a unique culture and continuously fees or sell merchandise, websites
Factors for a appeal to their user base. must attract advertisers to
business. The most keep operating.
Word of mouth recommendations
important for this Word of mouth recommendations are an Protection of intellectual property/
industry are: invaluable way to build up a website’s user copyrighting of output
base. Websites that can successfully get The ease with which digital media can
users to talk to their friends about the site, be duplicated and redistributed means
especially through social networks like operators selling content must contend
Facebook, tend to grow faster. with the threat of piracy.

Key Success Factors Access to highly skilled workforce on the quality of their products.
continued The low barriers to entry and hyper- Quality among these operators is
mobility of consumers for this industry driven primarily by the caliber of
force competitors to compete viciously talent employed.
Cost Structure The cost structures of operators in this skilled workforce. Wage expenses are
Benchmarks industry vary significantly depending on slightly diluted by the entrance of more
company size and operational scale. marketers and writers into a field that
Large operators typically own and formerly employed more workers in
operate their datacenters, which consist fields like IT, database management and
of servers and associated hardware, software development. While a major
increasing operational costs. Conversely, player like Alphabet Inc. still requires a
smaller companies typically rent server large number of highly skilled employees
space from hosting companies or even to develop the algorithms used in its
from some of the larger players in the advertising programs, most small players
industry. Additionally, the type of content now employ only marketing and writing
published affects cost structure. Video- staff and outsource the hosting and
intensive sites require significantly more design of their sites to third parties. In
bandwidth and are inherently more 2018, wage costs are estimated to account
expensive to run than a site that just for 36.1% of revenue. Over the five years
publishes text. to 2018, wages have increase as a
percentage of revenue.
Profit
Industry profit margins, measured as Purchases
earnings before interest and taxes, is Purchases in this industry are anticipated to
expected to be 25.3% of revenue in 2018, a account for 6.1% of total revenue. Content-
slight increase since 2013. The industry has providers like Netflix, Pandora Media Inc.
many small nonemployers, which depresses (Pandora), Spotify AB (Spotify) and Hulu
the average industry profit margin as larger LLC (Hulu) must pay royalties to artists,
companies typically have stronger margins. production companies and other owners of
Over the five years to 2018, the industry has entertainment materials, which can
added more than 24,000 nonemployers, represent a significant portion of revenue.
which make up over 85.0% of all industry For example, in 2015, Hulu paid $160.0
companies. Larger companies have million for the streaming rights of Seinfeld
experienced rising depreciation and in a deal that would enable Hulu to stream
marketing costs over the period, which have all 180 episodes of the sitcom on its site.
further hampered profit margin growth. Although a massive expense, content-
Industry operators, particularly those that providers and streaming companies must
offer paid content like Netflix Inc. (Netflix), make these investments to attract
also experience rising competition from free customers. Other common purchases made
online streamlining websites, which has by larger operators include intellectual
placed additional downward pressure on the property, where one company purchases
average industry profit margin. patents from another.
Wages Marketing
Labor is the largest factor of production Marketing is a very significant expense in
because the industry requires a highly this industry and is estimated to account

Cost Structure for 6.6% of industry revenue, a rise from includes companies of all sizes, from
Benchmarks 2013. Marketing efforts for companies startup Spotify, to publicly-traded
like Facebook and Twitter Inc. (Twitter) Pandora and behemoth Apple Inc. The
continued
differ from that of content-providers like main source of revenue for these
Hulu and Netflix. For example, given companies is through paid subscriptions,
Facebook and Twitter’s tremendous so marketing efforts go primarily toward
organic growth, market dominance and user-acquisition. As the subscription
integration into society, instead of spending business is expected to grow and become
on user acquisition, the companies have more competitive as new startups enter
been able to focus on attracting advertisers the field, streaming companies will
to its site. Further, Facebook is at an even continue to be required to invest in
greater advantage as its advertising marketing to attract users.
platform is world-renowned and highly
regarded. The company has been able to Other
advertise on its own platform, saving Other expenses include depreciation, rent
money that would have otherwise went to and utilities, selling and administration
external advertising efforts and showing costs and legal expenses. In addition,
prospective clients how it works first-hand. costs associated with mergers and
Not all companies have the advantage acquisitions are also expected to account
of market dominance, organic growth or for a small share of industry revenue.
societal integration as Facebook and These costs are expected to remain
Twitter do. For example, the streaming- relatively constant during the five-year
music segment is highly competitive, and period as they increase with revenue.
Sector vs. Industry Costs
Average Costs of
all Industries in Industry Costs
sector (2018) (2018)
100 n Profit
16.8 n Wages
25.3 n Purchases
80 n Depreciation
n Marketing
25.4 n Rent & Utilities
n Other
Percentage of revenue
60
36.1
16.7
40
5.6 6.1
3.7 3.2
11.5
20
27.7 6.6
1.6
12.8
0

Basis of Competition Internal competition External competition

Internally, internet publishers in the Externally, this industry competes for
Internet Publishing and Broadcasting the leisure time of consumers. In this
Level & Trend industry compete for the attention of users respect, the industry primarily
ompetition
C in by offering original content, attractive competes against other forms of
this industry is design and website user friendliness. The entertainment, including “old media”
Highand the trend main sources of traffic for websites are like radio broadcasting, TV
search engines and social networks, with broadcasting, newspaper publishers
is I ncreasing
social networks becoming increasingly and periodical publishers. The major
important. Search engines direct users to advantage of publishing content on the
websites that are closely related to the internet is that information can be
keyword entered by the user. Social updated in real time. Unlike print
networks enable users to share websites, forms of newspapers and magazines,
videos and other content with friends in online versions contain information
their network. The popularity of any that is current and routinely updated
individual website or service often has a throughout the day. Internet
significant effect on the advertising rates the broadcasters are also able to compete
website is able to charge. Social networking on diversity of content. While TV
sites, such as Facebook, have exploded in broadcasters are increasingly offering
popularity over the past five years by on-demand services and a diverse
combining exclusive content (nonmembers range of programming, none of them
cannot view profiles or pictures) with can come close to the multitude of
socializing. Notably, major players in this videos uploaded to YouTube every day;
industry facilitate competition among according to YouTube, 100 hours of
smaller players. For example, Google LLC video are uploaded to the site every
(Google)’s AdSense network provides small minute. Due to the rapid proliferation
websites with the ability to generate revenue of smartphones, external competitors
from advertisements. Without Google’s are increasingly publishing their
efficient and extensive advertising content on the internet or through
capabilities, most of these sites would lack mobile apps to target consumers that
the capability and the reach to generate access internet content through their
sufficient advertising revenue. mobile phones.
Barriers to Entry The Internet Publishing and Broadcasting

industry has low barriers to entry, but Barriers to Entry checklist
Level & Trend extremely high barriers to success. New Competition High
entrants can launch a website with just the Concentration High
arriers to Entry
B code for the site and cash for hosting and Life Cycle Stage Growth
in this industry are internet access fees. Regulation is extremely Capital Intensity Medium
Lowand S teady light and does not inhibit new entrants. The Technology Change High
most significant barrier to entry is the Regulation and Policy Light
development of the code or software to build Industry Assistance None
the website, which can range from the
very simple to the exceedingly complex. SOURCE: WWW.IBISWORLD.COM
A wide variety of vendors offer services

that enable a website developer to or toolsets (e.g. WordPress, Blogger
create websites from existing templates and Tumblr).

Barriers to Entry For many website categories, popularity of entrenched companies in

continued availability of content is a major barrier this industry is unquestionable, and so a
to entry. For example, movie studios and new entrant with a desire to compete
other content owners monitor video with the industry’s largest players must
streaming websites, so their content is clearly provide a better alternative to the
not given away for free. To host content content already delivered in the industry
owned by third-parties, video streaming or focus on a niche not already served. To
websites need to work out distribution or do this, new entrants may find it
licensing arrangements with each content necessary to purchase a substantial
owner, which may be costly and time amount of intellectual property and will
consuming. Due to these constraints, most need to attract a large pool of highly
of the content hosted on video streaming skilled labor.
websites consists of amateur uploads. While launching a website or internet
Even for amateur uploads, the platform requires little capital and few
popularity of a given website within its technical employees, surviving and
category can act as a barrier to success. thriving as a business is extremely
Users are more likely to upload their challenging. Unlike traditional brick-and-
content to popular websites where the mortar businesses where geography plays
content is likely to be seen by more an important role, a successful internet
people; if users use little known websites, business can more quickly and easily
most of their traffic will have to come expand throughout the world, dashing
from sending links on social networks or the dreams of small companies. For
through e-mail. For most operators in the example, prior to the advent of online
industry, the amount of traffic on a movie streaming, local video companies
website determines the amount of could compete with large national
revenue it generates. Therefore, acquiring companies, such as Blockbuster LLC
a suitable portion of internet traffic (Blockbuster). Blockbuster’s inability to
presents a significant barrier to success in serve every zip code left the door open for
this industry. small and local companies to fill the void.
However, the largest barriers to In the age of the internet, there is no local
success are encountered by operators company. Netflix Inc. and other internet-
that desire to compete with Google LLC, based companies are able to serve every
Facebook Inc. and Apple Inc. A internet-connected household in the
tremendous amount of capital country. As a result, barriers to success
expenditure is required, including are high as large companies are able to
datacenters and servers. Additionally, the serve customers of all geographies.

Industry The Internet Publishing and China is one notable exception to this
Globalization Broadcasting industry has a low level of rule, as Facebook, YouTube, Twitter and
globalization. Most operators in the other foreign websites are banned or
Level & Trend industry, including the major players, are blocked in the country. Though an
domestically owned and no products or enormous challenge, China also
lobalization
G in this services are traded across borders. represents a massive opportunity for US
industry is L owand However, the borders of traditional companies. If access is ever given, either
the trend is S teady nation-states are irrelevant to the through an agreement with the Chinese
internet as users from different countries government or stemming from radical
can easily access content from anywhere changes in Chinese law, US companies
in the world, unless there are licensing could welcome hundreds of millions of
constraints or governmental restrictions. new users.

Major Companies
Facebook Inc. | Alphabet Inc.
Netflix Inc. | Apple Inc. | Other Companies
Major Players Apple Inc. 10.0%

(Market Share) Alphabet Inc. 26.3%
16.0%
Other
Netflix Inc. 11.7%

Facebook Inc. 36.0% SOURCE: WWW.IBISWORLD.COM
Player Performance Headquartered in Menlo Park, CA and Facebook’s revenue model; Facebook
founded in 2004, Facebook Inc. uses this information to send users
(Facebook) is the world’s largest social targeted advertisements of products or
Facebook Inc. network, with an estimated 2.2 billion services based on their interests.
Market Share: 36.0% monthly active users. Far from its Facebook also uses a users’ basic
humble beginnings as a college side information such as age, gender and
project, the company now employs more geographic location to help companies
than 25,000 people and also operates advertise to a specific customer. For
photo-sharing app Instagram and advertisers, the ability to advertise to the
communication platform WhatsApp. exact customer they are targeting is
Facebook offers its services for free and highly beneficial.
generates revenue through advertising Since 2013, Facebook has made
sales. The company completed an initial investments to diversify its service
public offering (IPO) in May 2013, which holdings and find new ways to grow its
raised a reported $16.0 billion. In 2017, revenue. Just prior to the current period,
Facebook reported revenue of $40.7 billion. Facebook acquired photo-sharing app
Using Facebook and its other Instagram for $1.0 billion and in 2014
platforms, users can share and send acquired WhatsApp Inc. for $19.0 billion.
photos, videos and messages, join groups, On its namesake platform, Facebook has
play games and follow the news. Users added features in a bid to keep users on
can also keep up to date with their its site even longer. For instance,
interests, such as a favorite sports team, Facebook now provides trending news
TV show or company. This ties into stories and sports scores and recently
Facebook Inc. (US industry-specific segment) - financial performance

Revenue Operating Income
Year ($ million) (% change) ($ million) (% change)
2013 6,468.0 N/C 2,303.9 N/C
2014 11,080.2 71.3 4,438.8 92.7
2015 14,179.7 28.0 4,923.5 10.9
2016 21,853.7 54.1 9,826.2 99.6
2017 30,831.2 41.1 15,321.9 55.9
2018* 44,910.2 45.7 22,485.5 46.8
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD

Major Companies
Player Performance opened a marketplace for users to buy and increase at an annualized rate of 47.3% to
continued sell goods from each other. Also, the $44.9 billion, with operating income
company recently partnered with Major expected to rise to $22.5 billion. The
League Soccer to live stream soccer games company’s rapid expansion into new
on the platform. Facebook is looking to markets, products and services has
continue to add new services on top of contributed to an influx of new users and
existing services to keep users coming back revenue growth, as Facebook’s user base
and staying longer. As users spend more has more than doubled over the five
time on Facebook, more advertisements are years since 2013. Another contributing
displayed which results in an increase in factor to the tremendous rise in revenue
revenue. However, Facebook’s advertising is Facebook’s ability to advertise on
targeting methods have come under mobile devices, which was once a major
scrutiny recently, as advertisers were able to investor concern. This revenue stream is
market anti-Semitic paraphernalia to users, vital to Facebook’s success, as more than
raising questions about the ethics of its 1.0 billion users access Facebook solely
methods. Furthermore, Facebook CEO on their mobile device; in 2017, mobile
Mark Zuckerberg testified before Congress ad revenue accounted for about 88.0%
regarding the Cambridge Analytica scandal total revenue. Facebook will continue to
and how Facebook keeps user data safe. see strong results in this segment, as
the popularity of mobile device-use
Financial performance continues to surge and Facebook
Over the five years to 2018, Facebook’s improves its mobile
industry-specific revenue is forecast to advertising techniques.
Player Performance Founded in 1998 and headquartered in the company also operates well-known
Mountain View, CA, Alphabet Inc. and high-producing subsidiaries in the
(Alphabet) has transformed itself from a United States, including Android,
Alphabet Inc. simple search tool, Google, into a tech YouTube and Motorola Mobile. Alphabet
Market Share: 26.3% powerhouse employing more than has been described by founder Larry Page
Industry Brand Names 85,000 people. Although the majority of as a collection of companies, and also
YouTube.com Alphabet’s revenue comes from search, includes home automation producer Nest
Blogger.com
Google AdSense
Google AdWords Alphabet Inc. (US industry-specific segment)- financial performance
Google+
2013 12,321.0 N/C 2,802.4 N/C
2014 13,718.9 11.3 2,689.0 -4.0
2015 15,565.2 13.5 2,927.8 8.9
2016 19,708.2 26.6 3,106.4 6.1
2017 24,844.9 26.1 3,168.6 2.0
2018* 32,756.0 31.8 4,042.9 27.6
*Estimates

Major Companies
Player Performance Labs, self-driving car concept Waymo advertisers bid against one another to
continued and X, Alphabet’s research and place their ads next to content on
development center. In 2017, the Alphabet’s sites and on sites of members
company generated $110.9 billion. of Google’s network. Third-party sites are
Alphabet operates as an internet admitted to the network through the
publisher through YouTube, as well as its AdSense program. With AdSense, the
social media platform Google+ and its company places relevant ads generated
blogging website Blogger. For the most from AdWords on independent websites
part, the company offers these services to and shares revenue with the operators of
users free of charge and generates these sites. Since content publishers that
revenue through selling advertising participate in the AdSense program
space. However, Alphabet recently, receive the majority of what Alphabet
launched YouTube Red, a subscription- collects from advertisers, Alphabet helps
based premium version of YouTube, that generate revenue for many other
enable users to listen to music and watch companies in this industry.
videos while offline and without
advertisements. Further, YouTube now Financial performance
offers live TV to users for $35.00 per Over the five years to 2018, Alphabet’s
month, and included channels like ESPN, industry-relevant revenue is forecast to
NBC and Fox. This is a significant shift in grow at an annualized rate of 21.6% to
Alphabet’s business model, as revenue $32.8 billion in 2018. Alphabet has
from advertisements has been the main experienced phenomenal growth
driver of revenue since the then-Google primarily due to its successful advertising
acquired YouTube in 2006. strategy. However, as YouTube has
Aside from revenue derived from the remained unprofitable to at least 2015,
subscription-based YouTube Red and the industry-related operating margin is
YouTubeTV services, which has barely less than that of Alphabet’s overall
made a dent in Alphabet’s overall operating margin, and most of it is
revenue, Alphabet’s industry-related derived from its ad network.
revenue is generated through advertising Nevertheless, operating income is
on its platforms and its AdWords and expected to increase to $4.0 billion in
AdSense advertising programs. AdWords 2018 and will post stronger increases as
is an automated service through which YouTube turns profitable.
Player Performance Netflix Inc. (Netflix) is the world’s million subscribers in the United States.
leading internet TV network, enabling In 2017, the company generated $11.7
subscribers to stream TV shows and billion in total sales.
Netflix Inc. movies through internet-connected Before launching its streaming service
Market Share: 11.7% screens. Headquartered in Los Gatos, CA in 2007, Netflix was a mail-order service;
and founded in 1997, Netflix now instead of watching TV shows and movies
employs more than 5,400 people and is on the computer, customers received and
listed on the NASDAQ under the symbol returned DVDs through the mail. Since
NFLX. Netflix spearheaded the advent of 2011, the streaming and DVD-by-mail
internet TV, launching streaming services operations have been separate
in 2007 and has grown to about 89.0 businesses, each offering separate
million subscribers in nearly 190 membership plans. This has given rise to
countries, including more than 55.0 Netflix’s three reportable business

Major Companies
Player Performance segments: domestic streaming, traditional TV networks, viewers can

continued international streaming and domestic binge watch entire seasons or series in
DVD. The domestic and international one sitting without having to wait for the
streaming segments contribute revenue release of new episodes. This model and
from monthly membership fees for Netflix’s original programing have proved
content-streaming services; the domestic very popular and even won a Golden
DVD segment acquires revenue from Globe award.
monthly membership fees for DVD-by-
mail services. Only the domestic Financial performance
streaming business contributes to Over the five years to 2018, industry-
industry-specific revenue. specific revenue is expected to grow at
Over the five years to 2018, Netflix has an annualized rate of 34.8% to $14.6
added more than 20.0 million US billion, with operating income
subscribers. A main contributor to expected to increase to $1.8 billion in
Netflix’s ability to attract new subscribers 2018. Netflix’s strong financial
is their dive into exclusive and original performance the company has added
programming. Mirroring traditional TV new subscribers worldwide at an
networks, Netflix has created or annualized rate of 21.5% since 2013,
partnered with production companies on while also raising subscription service
TV series’, movies and documentaries fees and offering different tiers of
that are only available through their service. As more people purchase
service and have been nominated for higher priced plans, revenue
more than 100 Emmys. However, unlike will increase.
Netflix Inc. (US industry-specific segment)- financial performance

2013 3,277.3 N/C 171.0 N/C
2014 4,360.6 33.1 318.9 86.5
2015 5,645.9 29.5 254.7 -20.1
2016 7,845.1 39.0 337.4 32.5
2017 10,203.2 30.1 731.9 116.9
2018* 14,604.4 43.1 1,758.4 140.3
*Estimates
Player Performance Apple Inc. (Apple), maker of the iPhone, thousands of jobs in the country through
iPad and Mac computers, is one of the its iOS ecosystem. Apple is a global
world’s most valuable companies. company and recorded revenue of $229.2
Apple Inc. Founded in 1976 and headquartered in billion in 2017.
Market Share: 10.0% Cupertino, CA, Apple employs more than Apple is known for its iPhone and the
123,000 people in the United States and majority of its revenue comes through
has indirectly created hundreds of global iPhone sales. However, in recent

Major Companies
Player Performance years, as investors have questioned the iPhone. As iPhones hold more memory,
continued viability of relying so much on one source the Services segment will grow as users
of revenue, its Services segment has are able to hold more music, videos,
become an increasingly important books and apps.
revenue stream for the company. This
segment includes sales from iTunes, Financial performance
Apple Music (a subscription service) and Over the five years to 2018, Apple’s
its online book store, all of which are industry-specific Services revenue is
industry-relevant brands. This segment expected to grow at an annualized rate of
represented 8.0% of total revenue in 18.2% to $12.5 billion, with operating
2017, up from 3.9% in 2013. Although income anticipated to increase to $3.3
not industry-relevant, the Services billion in 2018. Apple earns a
segment also includes the App Store, disproportionately high share of its
AppleCare and Apple Pay. operating income from its Services
Sales from Apple’s Services segment segment, as these software services are
are directly tied to its sales of iPhones, less expensive to produce than that of
iPads and other hardware products. All of hardware products, including the iPhone,
Apple’s devices are designed to work iPad or Mac computer. Even as
specifically with Services segment nonhardware revenue only represents a
brands, such as iTunes, iBooks and apps small share of total revenue, it makes up
from the App Store. Over the five years to about one-fifth of Apple’s total operating
2018, Apple has discontinued the income. This number is expected to rise
16-gigabyte iPhone as its lowest memory as Apple’s Services segment continues to
product, instead offering a 32-gigabyte earn more revenue.
Apple Inc. (US industry-specific segment)- financial performance

2013 5,424.3 N/C 1,591.8 N/C
2014 5,645.4 4.1 1,651.8 3.8
2015 6,861.7 21.5 2,091.3 26.6
2016 9,253.7 34.9 2,575.8 23.2
2017 10,912.5 17.9 2,920.2 13.4
2018* 12,518.2 14.7 3,320.1 13.7
*Estimates
Other Company Oath Inc. is a subsidiary of Verizon visible dot-com companies. Among its
Performance Communications Inc., which is the parent brands include the Huffington Post, Yahoo!
company of the former Yahoo! Inc. and News and Yahoo! Sports. In 2018, the
AOL Inc. Yahoo operates as a digital media company is estimated to generate $4.7
Oath Inc. company and was of the earliest and most billion in industry relevant revenue.
Market Share: 3.8%

Major Companies
Other Company Spotify AB is a Stockholm-based online and has a collection of more than 35 million
Performance music and entertainment streaming service, songs. The company went public on the New
founded in 2006. Its service is the most York Stock Exchange in April 2018; in 2018,
popular of its kind globally; it is available in the company is estimated to generate $3.5
Spotify AB 65 markets, used by over 170 million users billion of US industry-specific revenue.
Market Share: 2.8%
Other Company Hulu LLC (Hulu) is a website that offers company generates revenue through
Performance streaming video of TV shows and movies paid subscriptions and short video
from TV networks and content producers. advertisements presented in shows,
Hulu is a private company owned by though only operated in the United
Hulu LLC Comcast, Fox Entertainment Group, The States, Japan and on US military
Market Share: 2.7% Walt Disney Company (Disney) and Time bases. Hulu recently launched Hulu
Warner Inc.; Disney is awaiting a decision Live, an online-based, live-TV service
from the US Securities and Exchange similar to that of a traditional cable
Commission (SEC) of its proposed company. It is expected that Hulu’s
acquisition of 21st Century Fox, which revenue will increase in 2018 to an
would give it a majority share of Hulu. The estimated $2.7 billion.
Other Company Twitter Inc. (Twitter) is an online news rate of 38.5% during the period to $2.4
Performance and social networking platform that was billion in 2017. Its industry-specific
founded in 2006 and is headquartered revenue which is generated through
in San Francisco. Twitter’s overall advertisements is expected to rise to
Twitter Inc. revenue has increased at an annualized $2.8 billion in 2018.
Market Share: 2.3%

Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity The Internet Publishing and Broadcasting

industry operates with a high level of capital Capital Intensity
Capital units per labor unit
intensity, on average. IBISWorld estimates
Level
that for every $1.00 spent on wages in 2018, 0.5
The levelof capital the industry overall will allocate $0.32 in
intensity is M
edium capital investment. 0.4
Since operators in this industry offer such 0.3

a diverse range of products, capital intensity
can vary significantly among operators. A 0.2
small company with a simple website can 0.1

operate with little capital expenditure, while
a company like Facebook Inc. requires 0.0
Economy Information Internet
massive investment in datacenters and Publishing and
Broadcasting
computing hardware to maintain its Dotted line shows a high level of capital intensity
operations. Expenses grow with user bases, SOURCE: WWW.IBISWORLD.COM
as companies are required to invest in more

powerful servers and computing power with industry-wide level of capital intensity
more users. Expenditures by large players upwards from where the median industry
on giant data centers somewhat skew the participant operates.

Capital Intensity Ironically, the more capital intensive generating advertising revenue on their
continued the industry’s major players are, the sites. Similarly, as the industry’s major
more affordable operations for smaller players also operate servers for smaller
companies become. For example, as companies, increased capital
Google LLC’s advertising platform investment in these systems bring
becomes more sophisticated, smaller higher efficiencies and lower per unit
companies have an easier experience costs for customers.
Technology and While the software behind the storage The advent of HTML5, the fifth version
Systems and distribution of web content has of the language used for structuring
largely matured, technological advances content on the World Wide Web, is very
in the industry are centered on changing significant for the industry. The
Level
how consumers access content and technology gives programmers greater
The level
of advertisers target consumers. control over the pages they create and
technology lightens the effect of media-rich
change is H
igh Mobile devices applications on mobile devices. For
One of the most significant technological example, by embedding videos with code
trends shaping the industry involves the rather than plugins (e.g. Adobe Flash
proliferation of smartphones, tablet Player), video applications will demand
computers and cellular data networks. less battery and memory space from
This “mobile revolution” has expanded mobile devices. Most significantly,
the opportunities that advertisers and HTML5 is multi-platform, enabling
content providers have to reach publishers to reach consumers on both
consumers, who are now able to access Apple’s iOS operating system and
content from a multitude of locations and Google’s Android system.
devices. Google LLC (Google) and Apple Fifth-generation mobile networks, or
Inc. (Apple), the two main distributors of more commonly known as 5G, will also
mobile apps, rank apps based on a variety bring massive technological changes to the
of factors, including active usage. This has industry. Beginning to be implemented
spurred many app publishers to run across the US starting as soon as this year,
campaigns aimed at building brand loyalty 5G networks will bring significant
and the re-use of their products. After all, upgrades to the current 4G networks. See
the number of users of content or a gaming Industry Outlook for more information.
app ultimately determines the revenue that
app generates. Content publishers are also Advertising
focused on enhancing user experience. As While the industry is focused on publishing
internet content has proliferated, and broadcasting content, the majority of
consumers are increasingly choosing their internet publishing operators generate
content providers based on the user- revenue through the sale of advertising. For
friendliness of their product. This is advertising networks, the most promising
especially important with mobile devices technological changes are those involving
where users interact with a much smaller the use of deep analytics built upon massive
interface than a computer. Developments databases of user information to more
in mobile app usability include effectively determine which ads are most
implementing stylish interfaces, limiting valuable to users. Facebook Inc. and Google
the amount of text on a screen and using are the two major drivers of internet
intuitive touch gesture technology. advertising technology in the industry.

Technology and Facebook’s advertising strategy is See the Major Companies section for
Systems centered on the basic principle of more information.
advertising through word of mouth. The Google’s AdSense technology analyzes
continued
company has embedded a like button on keywords, word frequency and the link
the page of almost every content provider structure of the web to match ads to
on the internet. When a Facebook user individual content pages instantaneously.
clicks this button, ads appear on their When an individual internet publisher
friends’ pages. In a social network with joins Google’s AdSense network, they
an estimated 2.0 billion monthly active embed a small, custom HTML code on
users, this advertising strategy has their page that generates a request to the
attracted major brands that run AdSense service whenever the page is
multimillion-dollar campaigns. Facebook viewed. The AdSense program then
also offers other methods of targeted matches a relevant advertisement to the
advertisements, including enabling content on that site. For example, a user
companies to advertise directly to reading an article on a sports team may
potential customers based on be presented with an advertisement
demographic information and interests. offering tickets to an upcoming game.
Revenue Volatility IBISWorld estimates moderate industry platforms. For example, it is still entirely
revenue growth over the five years to possible for online advertising spending
2018. Since the majority of operators’ to increase even as advertisers decrease
Level
revenue is dependent on advertising spending through other avenues. The
The level
of volatility revenue, the industry is susceptible to internet has proved to be a great way for
is M
edium trends and changes in advertising marketers to reach customers and as
expenditure. However, this may be internet usage rise and people spend
mitigated as advertising dollars are more more time on the internet, revenue will
frequently being devoted to online continue to increase.

Regulation and Policy Internet publishers and broadcasters are publication, any operator that offers users
subject to few regulations. However, the ability to upload and share content
copyright and intellectual property (IP) laws should be familiar with the act. In
Level & Trend are perennial issues that can significantly addition, since 2001, industry operators
he level of
T interfere with businesses in this industry. have been subject to the Patriot Act, which
Regulation is Legal precedents for copyrights and IP as requires websites to keep traffic data for a
Lightand the they relate to the internet are still evolving. specified period of time for the purposes
Conversely, there is precedent for stringent of security investigations.
trend is S
teady
copyrights for patented features based on A third area of concern for operators in
the software market, but there is also a the industry are net neutrality laws. Net
significant question of the limitations of “fair neutrality is sometimes referred to as free
use” exemptions. For example, Paul Allen, internet, as the principle requires internet
one of the cofounders of Microsoft, has service providers and governments to
pursued lawsuits against major internet equally treat all data on the internet. What
companies based on alleged IP violations this means is that an internet service
relating to technologies developed by his provider (ISP) must deliver the same
now defunct think tank Interval Research. internet speeds for users accessing Netflix as
Nevertheless, the courts continue to clarify those accessing Hulu, Yahoo, ESPN.com or
and solidify the boundaries of copyright and any other website. For example, without net
IP law for this industry. neutrality, Comcast Corporation, which
Another piece of regulation that owns Hulu, could slow speeds for Netflix or
influences the industry is the Digital YouTube while increasing speeds for Hulu,
Millennium Copyright Act (DMCA). A thereby driving customers to switch to Hulu.
lawsuit filed by Viacom Inc. (Viacom) Similarly, without these laws large
against Google LLC (Google) alleged that companies have the ability to pay ISPs to
Google’s YouTube service had engaged in slow or even block connections to rising
brazen and massive copyright infringement competition, creating an uneven
by enabling its users to upload videos of playing field. Those who oppose net
content created by Viacom-owned neutrality, however, argue that
properties like MTV and Comedy Central. increased regulation will lead to
Google was granted a motion for summary industry-wide price regulations similar
judgment on the grounds that it was to utilities, which will stifle competition
protected by the Safe Harbor provision of and slow growth and investment. The
the DMCA, as it had not intentionally new administration has signaled
engaged in copyright infringement and opposition to net neutrality, a decidedly
complied with a mass take-down notice different position on the issue than
issued by Viacom. While a complete analysis administrations in the past but has yet
of the law exceeds the scope of this to take action.

Industry Assistance Operators in this industry do not receive offer tax incentives to bring new offices or
explicit assistance from any level of datacenters to their cities. Several
government in the United States. industry trade organizations, including
Level & Trend However, municipalities are often keen to the Online Publishers Association,
he level of
T attract the sort of jobs attached to the provide news, ongoing education and
Industry Assistance major industry players and will often advice to operators in this industry.
is N
oneand the
trend is S
teady

Key Statistics
Industry Data Industry Internet traffic
Revenue Value Added Establish- Wages Domestic volume
($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand (Exabytes per month)
2009 30,185.3 19,714.0 15,084 14,520 80,783 -- -- 7,943.2 N/A 15.4
2010 38,319.9 24,916.2 20,470 19,765 100,849 -- -- 10,609.1 N/A 21.5
2011 48,220.1 31,588.1 27,030 25,868 125,360 -- -- 14,045.5 N/A 30.1
2012 60,692.3 41,034.4 37,469 36,407 157,751 -- -- 18,599.3 N/A 40.8
2013 65,718.4 48,680.3 42,582 41,374 175,383 -- -- 25,387.2 N/A 53.1
2014 72,767.5 53,004.8 50,826 49,355 201,226 -- -- 28,560.0 N/A 64.9
2015 82,541.7 58,298.1 60,318 58,785 220,697 -- -- 30,533.5 N/A 78.5
2016 94,889.6 68,392.1 66,994 64,783 245,121 -- -- 33,563.2 N/A 96.1
2017 112,887.4 81,842.6 72,882 70,477 277,042 -- -- 39,532.1 N/A 121.7
2018 124,735.5 90,935.6 84,985 82,483 313,816 -- -- 44,974.8 N/A 150.9
2019 149,252.4 109,072.8 102,458 99,513 373,868 -- -- 54,511.8 N/A 186.5
2020 169,807.9 124,378.1 119,899 116,687 430,672 -- -- 63,390.0 N/A 228.4
2021 192,105.1 140,954.9 140,856 137,433 494,126 -- -- 73,358.8 N/A 278.1
2022 215,909.8 159,221.7 167,330 163,902 566,724 -- -- 84,708.3 N/A 335.6
2023 241,411.7 178,755.6 193,842 190,302 642,234 -- -- 96,739.1 N/A 402.4
Sector Rank 4/38 2/38 2/38 1/38 3/38 N/A N/A 3/38 N/A N/A
Economy Rank 88/696 27/696 90/696 87/696 114/696 N/A N/A 35/696 N/A N/A
Annual Change Industry Establish- Domestic Internet traf-

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand fic volume
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2010 26.9 26.4 35.7 36.1 24.8 N/A N/A 33.6 N/A 39.3
2011 25.8 26.8 32.0 30.9 24.3 N/A N/A 32.4 N/A 40.0
2012 25.9 29.9 38.6 40.7 25.8 N/A N/A 32.4 N/A 35.7
2013 8.3 18.6 13.6 13.6 11.2 N/A N/A 36.5 N/A 30.3
2014 10.7 8.9 19.4 19.3 14.7 N/A N/A 12.5 N/A 22.1
2015 13.4 10.0 18.7 19.1 9.7 N/A N/A 6.9 N/A 21.0
2016 15.0 17.3 11.1 10.2 11.1 N/A N/A 9.9 N/A 22.3
2017 19.0 19.7 8.8 8.8 13.0 N/A N/A 17.8 N/A 26.7
2018 10.5 11.1 16.6 17.0 13.3 N/A N/A 13.8 N/A 24.0
2019 19.7 19.9 20.6 20.6 19.1 N/A N/A 21.2 N/A 23.6
2020 13.8 14.0 17.0 17.3 15.2 N/A N/A 16.3 N/A 22.5
2021 13.1 13.3 17.5 17.8 14.7 N/A N/A 15.7 N/A 21.8
2022 12.4 13.0 18.8 19.3 14.7 N/A N/A 15.5 N/A 20.7
2023 11.8 12.3 15.8 16.1 13.3 N/A N/A 14.2 N/A 19.9
Sector Rank 2/38 2/38 1/38 1/38 1/38 N/A N/A 2/38 N/A N/A
Economy Rank 12/696 11/696 3/696 3/696 5/696 N/A N/A 5/696 N/A N/A
Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2009 65.31 N/A N/A 373.66 26.31 5.36 98,327.62 0.13
2010 65.02 N/A N/A 379.97 27.69 4.93 105,197.87 0.16
2011 65.51 N/A N/A 384.65 29.13 4.64 112,041.32 0.20
2012 67.61 N/A N/A 384.73 30.65 4.21 117,902.90 0.25
2013 74.07 N/A N/A 374.71 38.63 4.12 144,752.91 0.30
2014 72.84 N/A N/A 361.62 39.25 3.96 141,929.97 0.31
2015 70.63 N/A N/A 374.00 36.99 3.66 138,350.32 0.34
2016 72.08 N/A N/A 387.11 35.37 3.66 136,925.03 0.39
2017 72.50 N/A N/A 407.47 35.02 3.80 142,693.53 0.45
2018 72.90 N/A N/A 397.48 36.06 3.69 143,315.83 0.49
2019 73.08 N/A N/A 399.21 36.52 3.65 145,804.94 0.57
2020 73.25 N/A N/A 394.29 37.33 3.59 147,188.58 0.64
2021 73.37 N/A N/A 388.78 38.19 3.51 148,461.73 0.71
2022 73.74 N/A N/A 380.98 39.23 3.39 149,470.11 0.79
2023 74.05 N/A N/A 375.89 40.07 3.31 150,629.05 0.87
Sector Rank 5/38 N/A N/A 24/38 8/38 34/38 9/38 2/38
Economy Rank 16/696 N/A N/A 253/696 103/696 522/696 17/696 27/696
Figures are in inflation-adjusted 2018 dollars. Rank refers to 2018 data. SOURCE: WWW.IBISWORLD.COM

Industry Financial Ratios

Apr 2016 - Mar 2017 by company revenue
Apr 2013 - Apr 2014 - Apr 2015 - Apr 2016 - Small Medium Large
Mar 2014 Mar 2015 Mar 2016 Mar 2017 (<$10m) ($10-50m) (>$50m)
Liquidity Ratios
Current Ratio 1.3 1.4 1.5 1.1 n/a 1.1 0.9
Quick Ratio 1.3 1.3 1.4 1.0 n/a 0.9 0.9
Sales / Receivables (Trade Receivables
Turnover) 8.6 9.4 7.4 9.3 n/a 9.1 8.4
Days’ Receivables 42.4 38.8 49.3 39.2 n/a 40.1 43.5
Cost of Sales / Inventory (Inventory Turnover) n/c n/c n/c n/c n/a n/c n/c
Days’ Inventory n/a n/a n/a 0.4 n/a 0.4 0.4
Cost of Sales / Payables (Payables Turnover) 8.6 10.1 20.1 10.7 n/a 12.3 5.6
Days’ Payables 42.4 36.1 18.2 34.1 n/a 29.7 65.2
Sales / Working Capital 21.4 12.2 11.3 41.5 n/a 18.0 -152.0
Coverage Ratios
Earnings Before Interest & Taxes (EBIT) /
Interest 1.4 3.0 1.6 4.2 n/a 15.9 n/a
Net Profit + Dep., Depletion, Amort. / Current
Maturities LT Debt n/a n/a n/a n/a n/a n/a n/a
Leverage Ratios
Fixed Assets / Net Worth 0.9 0.4 0.2 -999.9 n/a 0.7 -0.3
Debt / Net Worth 4.6 2.8 1.7 -999.9 n/a 2.3 -2.8
Tangible Net Worth 2.2 22.6 1.9 -10.3 n/a -26.1 -29.8
Operating Ratios
Profit before Taxes / Net Worth, % 4.2 60.5 52.9 26.6 n/a 46.4 n/a
Profit before Taxes / Total Assets, % 1.8 5.5 15.3 10.6 n/a 13.3 -4.4
Sales / Net Fixed Assets 30.6 34.6 44.4 42.3 n/a 73.7 15.4
Sales / Total Assets (Asset Turnover) 1.7 2.2 2.7 2.2 n/a 2.7 1.1
Cash Flow & Debt Service Ratios (% of sales)

Cash from Trading 65.0 49.8 59.2 65.4 n/a 48.2 n/a
Cash after Operations 6.2 5.4 5.2 10.8 n/a 8.6 n/a
Net Cash after Operations 8.1 5.1 7.6 8.4 n/a 6.5 n/a
Cash after Debt Amortization 2.2 0.9 2.1 3.1 n/a 1.6 n/a
Debt Service P&I Coverage 3.3 4.5 1.6 3.3 n/a n/a n/a
Interest Coverage (Operating Cash) 13.6 8.4 1.9 4.3 n/a n/a n/a
Assets, %
Cash & Equivalents 21.8 27.3 29.4 24.1 n/a 27.2 16.7
Trade Receivables (net) 25.3 29.2 33.2 25.8 n/a 25.5 18.5
Inventory 1.3 1.9 2.0 3.6 n/a 6.1 0.4
All Other Current Assets 4.3 6.6 4.9 5.4 n/a 8.9 2.2
Total Current Assets 52.7 65.0 69.3 58.9 n/a 67.8 37.8
Fixed Assets (net) 9.7 10.9 11.2 10.8 n/a 8.1 11.7
Intangibles (net) 25.8 16.0 11.0 22.1 n/a 19.7 40.8
All Other Non-Current Assets 11.8 8.1 8.5 8.2 n/a 4.4 9.7
Total Assets 100.0 100.0 100.0 100.0 n/a 100.0 100.0
Total Assets ($m) 2,097.8 2,326.6 812.8 1,769.9 18.5 329.8 1,421.6
Liabilities, %
Notes Payable-Short Term 5.0 6.1 4.7 8.9 n/a 9.8 2.7
Current Maturities L/T/D 2.0 2.1 0.6 0.9 n/a 1.3 1.0
Trade Payables 12.8 15.7 9.1 13.5 n/a 13.2 14.2
Income Taxes Payable 0.9 0.1 n/a 0.7 n/a 1.0 0.6
All Other Current Liabilities 26.1 23.5 43.6 26.1 n/a 28.9 26.4
Total Current Liabilities 46.7 47.5 58.0 50.1 n/a 54.3 45.0
Long Term Debt 6.6 9.1 10.6 13.6 n/a 9.6 29.1
Deferred Taxes 0.3 0.4 0.3 0.4 n/a 0.3 1.0
All Other Non-Current Liabilities 18.4 4.4 18.2 24.1 n/a 42.3 13.9
Net Worth 28.0 38.6 12.9 11.8 n/a -6.4 11.0
Total Liabilities & Net Worth ($m) 2,097.8 2,326.6 812.8 1,769.9 18.5 329.8 1,421.6
Maximum Number of Statements Used 38 42 35 38 9 17 12
Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more
than 260,000 statements of member financial institutions’ borrowers and prospects.
Note: For a full description of the ratios refer to the Key Statistics chapter online.

Jargon & Glossary
Industry Jargon BROADBANDA one-way internet connection at speeds SOCIAL NETWORKA category of website that is
in excess of 200 Kbps. primarily used for communication and sharing with
DATACENTERA facility in which computer and storage other members.
systems are housed. TRAFFIC ACQUISITION COSTSPayments made to
OLD MEDIATraditional means of communication, such online operators that direct traffic to their websites.
as cable TV, radio and newspapers that existed before
the internet.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that INDUSTRY CONCENTRATIONAn indicator of the
new companies struggle to enter an industry, while low dominance of the top four players in an industry.
barriers mean it is easy for new companies to enter an Concentration is considered high if the top players
industry. account for more than 70% of industry revenue.
CAPITAL INTENSITYCompares the amount of money Medium is 40% to 70% of industry revenue. Low is less
spent on capital (plant, machinery and equipment) with than 40%.
that spent on labor. IBISWorld uses the ratio of INDUSTRY REVENUEThe total sales of industry goods
depreciation to wages as a proxy for capital intensity. and services (exclusive of excise and sales tax); subsidies
High capital intensity is more than $0.333 of capital to on production; all other operating income from outside
$1 of labor; medium is $0.125 to $0.333 of capital to $1 the firm (such as commission income, repair and service
of labor; low is less than $0.125 of capital for every $1 of income, and rent, leasing and hiring income); and
labor. capital work done by rental or lease. Receipts from
CONSTANT PRICESThe dollar figures in the Key interest royalties, dividends and the sale of fixed
Statistics table, including forecasts, are adjusted for tangible assets are excluded.
inflation using the current year (i.e. year published) as INDUSTRY VALUE ADDED (IVA)The market value of
the base year. This removes the impact of changes in goods and services produced by the industry minus the
the purchasing power of the dollar, leaving only the cost of goods and services used in production. IVA is
“real” growth or decline in industry metrics. The inflation also described as the industry’s contribution to GDP, or
adjustments in IBISWorld’s reports are made using the profit plus wages and depreciation.
US Bureau of Economic Analysis’ implicit GDP price INTERNATIONAL TRADEThe level of international
deflator. trade is determined by ratios of exports to revenue and
DOMESTIC DEMANDSpending on industry goods and imports to domestic demand. For exports/revenue: low is
services within the United States, regardless of their less than 5%, medium is 5% to 20%, and high is more
country of origin. It is derived by adding imports to than 20%. Imports/domestic demand: low is less than
industry revenue, and then subtracting exports. 5%, medium is 5% to 35%, and high is more than
EMPLOYMENTThe number of permanent, part-time, 35%.
temporary and seasonal employees, working proprietors, LIFE CYCLEAll industries go through periods of growth,
partners, managers and executives within the industry. maturity and decline. IBISWorld determines an
ENTERPRISEA division that is separately managed and industry’s life cycle by considering its growth rate
keeps management accounts. Each enterprise consists (measured by IVA) compared with GDP; the growth rate
of one or more establishments that are under common of the number of establishments; the amount of change
ownership or control. the industry’s products are undergoing; the rate of
technological change; and the level of customer
ESTABLISHMENTThe smallest type of accounting unit
acceptance of industry products and services.
within an enterprise, an establishment is a single
physical location where business is conducted or where NONEMPLOYING ESTABLISHMENTBusinesses with
services or industrial operations are performed. Multiple no paid employment or payroll, also known as
establishments under common control make up an nonemployers. These are mostly set up by self-employed
enterprise. individuals.
EXPORTSTotal value of industry goods and services sold PROFITIBISWorld uses earnings before interest and tax
by US companies to customers abroad. (EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
IMPORTSTotal value of industry goods and services
interest and tax.
brought in from foreign countries to be sold in the
United States.

Jargon & Glossary
IBISWorld Glossary VOLATILITYThe level of volatility is determined by WAGESThe gross total wages and salaries of all
averaging the absolute change in revenue in each of the employees in the industry. The cost of benefits is also
continued past five years. Volatility levels: very high is more than included in this figure.
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.

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IBISWorld Industry Report Internet Publishing and Broadcasting in The US 2018

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WWW.IBISWORLD.

COM Internet Publishing and Broadcasting in the USNovember 2018 1

Going viral: Revenue is expected to continue

IBISWorld Industry Report 51913b

2 About this Industry 18 International Trade 33 Operating Conditions

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

About this Industry

Main Activities The primary activities of this industry are

The major products and services in this industry are

Similar Industries 51212 Movie & Video Distribution in the US

51511 Radio Broadcasting in the US

51911 News Syndicates in the US

51711d Internet Service Providers in the US

45411a E-Commerce & Online Auctions in the US

51913a Search Engines in the US

Provided to: Edeska (2129455405) | 09 May 2019

About this Industry

Additional Resources For additional information on this industry

IBISWorld writes over 1000 US

Provided to: Edeska (2129455405) | 09 May 2019

Key Statistics Revenue Annual Growth 13–18 Annual Growth 18–23

$31.6bn $45.0bn 82,483

Exabytes per month

Industry Structure Life Cycle Stage Growth Regulation Level Light

Provided to: Edeska (2129455405) | 09 May 2019

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Internet traffic volume Number of mobile internet connections

400 Million 400

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Current The Internet Publishing and Broadcasting

broadband internet availability is

the United States has increased at an

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Mobile platforms spur revenue rose 36.2% in 2017, reaching a total

Content producers About one-third of industry-related revenue

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Privacy concerns Financial statements and quantitative

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Industry Over the five years to 2023, the Internet

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Products & Markets

Supply Chain KEY BUYING INDUSTRIES

KEY SELLING INDUSTRIES

Products and Services Products and services segmentation (2018)

Total $124.7bn SOURCE: WWW.IBISWORLD.COM

The Internet Publishing and licensing provides a relatively small

Provided to: Edeska (2129455405) | 09 May 2019

Products & Markets

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Products & Markets

Major Markets As a predominately advertising-driven revenue. While most content on the

Provided to: Edeska (2129455405) | 09 May 2019

Products & Markets

Major Markets Major market segmentation (2018)

online products, 66.0% use only one Financial services advertisers

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Products & Markets

Major Markets Telecom advertisers include: leisure travel, consumer

Provided to: Edeska (2129455405) | 09 May 2019

Products & Markets

COM Internet Publishing and Broadcasting in the USNovember 2018 1