Consumers’ growing interest in media will help to supercharge this sector of the economy as media spending from all sources in the United States passes the $1 trillion mark in 2008, according to a forecast from private equity firm Veronis Suhler Stevenson.
Media spending by consumers, advertisers, marketing services and institutions will rise an average of 6.7 percent a year from $942 billion in 2007 to $1.2 trillion in 2011, says the annual VSS Communications Industry Forecast, one of the industry’s most widely cited resources.
That will make media the third-fastest growing part of the economy — after agriculture and the federal government — up from the period beginning in 2002, when the industry grew about 5.9 percent a year, good enough then for fifth place.
Although corporations account for the lion’s share of media spending, “the overall change in consumer … usage was the biggest surprise” this year, says VSS Managing Director James Rutherfurd.
In 2006, people spent slightly less time with media than they had the previous year. The growing use of Internet services vs. traditional media accounts for some of the dip. It takes less time to read a few news stories and watch some video clips online than it does to read a newspaper and watch a TV show.
But the shift from traditional media is starting to slow, says Patrick Quinn, CEO of PQ Media, which contributed data for the forecast.
Television usage will continue to grow, with the average consumer spending 1,073 hours with cable and satellite TV in 2011, up 76 hours from last year. “People are migrating to niche channels, and you see a lot more dollars being thrown at new productions for basic networks,” Rutherfurd said. “It’s not just HBO. Now, you’ve got TNT doing it, FX doing it, ESPN.”
Individuals will spend $411 on cable and satellite in 2011, up from $308 last year, as rates rise and many buy new services such as digital channels, digital video recorders and high-speed Internet.
