• by Wayne Friedman , September 28, 2011

Just as recent U.S. advertising projections have been downgraded by many studies, so too is the entire U.S. communications industry. But overall, the latter seems to be in better shape.

Veronis Suhler Stevenson says overall U.S. communications businesses will rise 4.1% by the end of this year to $1.12 trillion, as well as seeing compounded growth of 5.5% over the next four years to some $1.41 trillion.

This is lower than Veronis' estimate last year of a 6.1% compounded growth rate through 2014, getting to $1.42 trillion. Veronis said recent downtrending economic indicators in the third quarter were the reason for its revised multi-year estimates.

The better news: U.S. media business overall will rise at a faster rate than recent U.S. advertising -- as well as outperforming single-digit-percentage projected U.S. economic growth.

Veronis says there will be U.S. advertising revenue growth of 2.5% in 2011 to $188.16 billion and a 6.0% compounded rate to $245.29 billion over the next several years. The study says traditional consumer advertising will see somewhat slower growth -- 1.9% to $160.21 billion in 2015.

Much of the relatively moderate rises in the U.S. communications sector comes from the entertainment/leisure industry -- and in particular, from pay/fee-based entertainment: movies and subscription TV.

There will be compounded growth of 5.6% over the next four years to $355.74 billion. A good chunk of this comes from subscription TV -- the largest consumer media segment -- rising 7.6% over that time to $236.76 billion.

Veronis says broadcast -- traditionally the biggest advertising segment -- will get the brunt of lower ad results this year -- with other revenues, such as retrans fees, helping to keep those revenues up. The study says broadcast will remain virtually flat this year to $47.18 billion, a slight drop of 0.6%. Over the next four years, however, it will rise 3.9% to $57.37 billion -- mostly because of higher retransmission fees.

Targeted media, products and services that provide microtargeted advertising and marketing messages to consumer or business will be the fastest-growing sector in 2011 and for the next several years -- rising 7.1% to $199.96 billion and a 7.9% compounded growth rate through 2015, landing at $272.50 billion.

This includes consumer Internet and mobile platforms, as well as branded entertainment: consumer events and product placements. Branded entertainment business will grow in the areas of video games and music videos.

Newspapers are expected to see continued drops -- falling 2.7% to $35.03 billion through 2015. The broadcast and satellite radio segment will go in a positive direction -- up 4.2% to $22.16 billion. Out-of-home media will outshine both newspapers and radio, growing 9.2% in 2015 to $12.08 billion -- much of this coming from more digital screens and signage.