Media Relations Minute: Media industry expected to outgrow the US economy through 2014
According to a recent report, investments made in media and communications, especially pertaining to mobile devices and the Internet, will increase faster than the US economy through 2014.
The report, compiled by media-focused private equity firm Veronis Suhler Stevenson, indicates that the media and communications industries are expected to grow to $1.42 trillion by 2014 at an average annual increase of 6.1 percent. This is a 0.3 percent difference from the estimated 5.8 percent increase in US gross domestic product during that same time frame. In 2010 alone, US media and communications are expected to gain 3.5 percent and bounce back from the “recession-induced advertising dip.”
What is spearheading this development? The business and professional information division is leading the charge with an expected annual growth of 8.2 percent, or a total of $249 billion by 2014. The surge will be fueled by new applications and software technology that are dependent on new media streams and outlets.
“Business information services and professional information services, like Reed Elsevier, are growing faster and did not suffer the same downturn effect that advertising and marketing businesses did,” John Suhler, partner and co-founder of Veronis Suhler Stevenson, the firm that released this report, told Bloomberg News.
Although consumer online spending and mobile services might appear to be the fastest-growing segment (15 percent annually), entertainment and leisure media will continue to be the largest segment, with an average increase of 6.3 percent to a total of $353.9 billion by the end of 2014. This is mostly due to the rising demand for subscription television. The report also discovered unexpected areas of growth in educational media, direct mail and B2B media.
Unfortunately, broadcast radio, magazines and other traditional advertising streams are forecasted to have a slow-growth average of only 2.2 percent. Consumer promotions and reward programs will experience the least amount of growth at 1.8 percent.