To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. It is a different story for the most profitable firms. Other than Sky, the top ten firms by profit margin are all focused on just one area of the media sector: classified advertising for Auto Trader; information publishing for Argus Media; and television for UKTV. The newspaper publishing sub-sector is an interesting example of businesses making choices about how focused or diversified they want to be. Many publishers with a print heritage, such as the Guardian, the Telegraph and News UK, have added products such as financial services, dating and online bingo in an attempt to generate new revenue streams and boost customer loyalty. News publishers are also now competing with marketing agencies by setting up their own branded content studios – GLabs at the Guardian, Spark at the Telegraph, Truffle Pig at the Daily Mail (a joint venture with WPP and Snapchat). On the whole, the newspaper publishers in our ranking have improved their profitability over the last 3-4 years, from an average of seven per cent in 2011 to 13 per cent in 2015 (as per latest figures available), but it is hard to discern to what extent this diversification has been a factor. The bottom line Our data suggests that the most profitable media and entertainment companies are those which have a niche focus on a specific part of the media sector. Shareholders in these focused companies typically expect management to exploit their position in a specific market, with attempts to diversify often viewed as distractions from the core business. However, the media and entertainment industry was among the first to show the power of disruptive innovation, and many of our largest media organisations have attempted to diversify in recent years, either to capture new technological waves of opportunity or to shore up weakening performance in legacy markets. 24