'09 To See Lowest Growth Rate For Media In 30 Years

by Joe Mandese, Feb 24, 2009, 5:00 AM

• Comment
• Recommend (1)
• Tweet
• 

For the first time in the 22 years since it has been publishing its annual Communications Industry Forecast, Veronis Suhler Stevenson has issued a "mid-term" update, due to the sudden, pronounced shift in the global economy and its impact on the media industry.

The update, which comes amid a flurry of similar downward revisions by other leading industry forecasters and analysts, calls for media spending from all sources--including advertising, consumer and institutional users--to decline 0.4% in 2009. That's a revision from VSS' initial 2009 projection of a 4.9% growth rate.

The VSS report, which is among the most highly regarded in the media industry for both its accuracy and longitudinal nature, also revised its 2008 estimate to a growth rate of 2.3%, down from the 5.4% it originally estimated when it released its last annual report in August 2008.

The update calls the revised rates the "industry's lowest growth rate" since it began tracking the marketplace 30 years ago. It's also the second time ever that total media industry spending declined based on VSS criteria.

"The continued negative outlook for economic activity, coupled with secular shifts and cyclical trends underway in the media and communications industry, are expected to limit the sector's overall growth in 2009," the report says, adding that the media industry would nonetheless outpace the growth of the overall U.S. gross domestic product.

Advertising as a sub-segment, however, will be among the most severely impacted by the economic downturn, and VSS now expects it to decline 7.4% in 2009, following a corresponding dip in 2008, and marking the first back-to-back years of advertising recession in 75 years.

"Steep reductions in traditional advertising spend, such as newspapers, television, and consumer magazines, are being driven by fragmentation of target consumers and brand strategies, which are increasingly focused across multiple venues and platforms," VSS notes. It added that some emerging and new media sectors will continue to grow, albeit at more moderate rates than projected a year ago.

The "pure-play" Internet and mobile services segment will grow at 9.1%, down from VSS' previous forecast of 15.5%.

Other "alternative communications" segments, including branded entertainment, digital out-of-home and professional business information services, are also growing more rapidly than other sectors and much faster than the general economy.

• Comment
• Recommend (1)
• Tweet
• 

Be the first to comment on "'09 To See Lowest Growth Rate For Media In 30 Years"

Leave a Comment