Consumer-​Supported Media to Increase

Few people will argue that consumers are spending more time than ever engaged with media. The total media time for consumers, on average, has reached 3,532 hours, annually.  And as the hours have increased, the types of media used by many consumers have changed. But Veronis Suhler Stevenson analysts believe many companies in the media industry have not kept up with the pace of these changes.

We’re finding that media owners and investors require greater awareness of how their companies match up to their industry peers and other industry spending patterns that could be viewed as an alternative growth areas and/​or competitive,” said John Suhler, Co-​founder, President and General Partner of VSS.  To support this contention, the firm’s data points to huge shifts in communications spending in the past 30 years.  While consumer advertising was once the mainstay of a firm’s communications budget, that segment is now dwarfed by the huge amount being spent in the entertainment/​leisure sector. The following numbers show the current allocation of spending compared to the historical data (presented in parentheses):

  • Entertainment/​leisure: 30% (15.9%)
  • Targeted media: 23.4% (18.4%)
  • Business information/​services: 16.2% (8%)
  • Traditional consumer advertising: 17.2% (40%)

The drop in time spent with ad-​supported media such as TV and newspapers can partly explain the smaller budgets being directed to traditional consumer advertising. Historically, consumers spent nearly 90% of their time with ad-​supported media. Today, only about 50% of consumer media time goes to ad-​supported models. The rest goes to channels such as video games or the Internet. The biggest beneficiary of this shift, according to VSS analysts, is subscription or pay TV.

The bottom line for media companies is that they must be willing to engage with consumers in the way that these consumers choose to spend their time. By doing so, they will capture a larger share of marketer budgets and enhance their own bottom lines.

[Source: New VSS Study Shows Fast Growth in Communications Industry, Subscription TV and Consumer-​supported Media Over 35 Years. VSS​.com. 27 Apr. 2010. Web. 3 Jun. 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.