The hurricanes that swept through the U.S. Gulf Coast region beginning in late summer have caused nearly $1.6 billion in losses for the U.S. media industry, according to new calculations released Tuesday by media economist PQ Media. The estimates, which are far greater than other media spending trackers had anticipated, were driven primarily by the effects of Hurricane Katrina--which accounts for $1.13 billion in media spending losses between August and September, making it the "costliest natural disaster on record for the media industry," according to PQ.
While that impact is still relatively small given the overall size of U.S. media spending, the effects were concentrated during a few months and in specific media markets, devastating local media economies. PQ estimates that Katrina alone accounted for a 2.2 percent loss in media spending in 20 designated market areas during 2005. New Orleans, the biggest of the media markets affected, accounted for 64.8 percent of the total losses, or $732.5 million. That represents a "staggering" 14.3 percent drop in New Orleans annual media spending, estimates PQ, noting that the impact on the overall U.S. media economy is far smaller--about 0.2 percent.
Not surprisingly, advertising losses were the main factor--especially local ad spending, which represented $470.3 million, or 29.7 percent of the total decline.
The calculations represent a far more significant impact than has been noted in previous media spending reports released recently, including an update of ZenithOptimedia's quarterly tracking study, as well as syndicated reports from Nielsen Monitor-Plus and TNS Media Intelligence/CMR, which barely even footnoted the effects of Katrina or the other hurricanes.
Media Spending Losses Resulting from 2005 Hurricanes
Katrina: $1,130.3 billion
Rita: $210.3 million
Wilma: $206.5 million
Dennis: $35.7 million
Cindy: $1.4 million
Ophelia: $1.0 million
Total: $1,585.2 billion
Source: PQ Media