The annual US Communications Industry Forecast from Veronis Suhler Stevenson (VSS) predicts that total US communications spending will rise at a compound annual growth rate (CAGR) of 5.5% over the five-year period through 2015, with targeted media leading the way. Radio and TV are expected to grow as well, but at a slightly slower pace.
Major segments that have been negatively impacted in recent years by the migration to digital platforms and economic factors are expected to stabilize during the forecast period, according to the VSS Forecast. The Traditional Consumer Advertising Media sector, which includes the Broadcast Television, Consumer Magazine Publishing, and Broadcast & Satellite Radio segments, among others, will generate growth in the forecast period, albeit trailing GDP, as brand-related digital products and delivery methods gain a stronger foothold for most traditional media outlets.
“While there are instances of declines and decelerated growth – largely in the more traditional segments of the Communications Industry – there is a convergence taking place in which everything digital continues to gain greater influence, scope and relative revenue mix, neutralizing the general decline of traditional media,” said John Suhler, Co-Founder, President and General Partner of VSS. “Business & Professional Information & Services continues to be a fast-growing sector, in part, because it has long embraced digital content and related software services and delivery. Also, the sectors that held up well in the last economic downturn – Targeted Media, Business & Professional Information & Services, Education & Training Media & Services, and Entertainment & Leisure Media – are all expected to record solid growth in the forecast period, thanks in large part to their migration to digital platforms and delivery methods,” he added.
Here’s what VSS sees for this year and through 2015 for the sectors of most concern to RBR-TVBR readers:
Radio: “Overall expenditures on broadcast & satellite radio are expected to increase 1.7% in 2011 to $18.37 billion, driven by steady growth in broadcast and satellite, and double-digit gains in the digital platforms of broadcast and satellite radio companies. The market will post a CAGR of 4.2% in the forecast period, as listeners adopt emerging digital formats, rising car sales fuel satellite subscription growth, and the industry makes considerable progress in selling digital advertising.”
Television: “Total broadcast TV spending is expected to decline 0.6% in 2011 to $47.18 billion, as double-digit gains in online and mobile platforms and retransmission failed to offset a drop in network and station advertising. Despite a slight recovery in the financial and retail categories, the absence of political and Olympics-related advertising will cause network and station spending to decline in 2011. Broadcast TV expenditures will achieve a CAGR of 3.9% in the 2010-15 period, driven by solid growth in online and mobile platforms, a cyclical increase in political and Olympics spending during even years, and incremental gains in issues oriented political advertising in odd years.”
RBR-TVBR observation: After the pain of the recession years, any movement to the up side is welcomed. With any luck the economy will strengthen faster than current conditions would indicate and the growth rates for both radio and TV will have to be tweaked upward in future VSS forecasts.