Digital Media Boost Communications Industry Growth Rate

One of the most talked about details in the transition from traditional to digital media is time frame. This move on the part of media companies and advertisers will follow behavioral shifts by consumers. The latest research indicates that this shift is happening faster than some research shops expected.

Veronis Suhler Stevenson, a private equity firm, issues an annual communications industry forecast every September. Last September, analysts predicted a 5.7% increase in industry revenue for the coming year. The mid-​year update, just released, has dropped the projected growth rate to 5.5%.

Despite the drop, John Suhler VSS president, sees reason for optimism. “Higher growth rates for digital are offsetting some of the declines or slow growth in traditional media with much higher growth.”  Some sectors covered in the VSS report will experience growth rates higher than the GDP, currently pegged at 4.4%.

Leaders will include:

  • Pure-​Play Consumer Internet & Mobile Services (18.1%)
  • Public Relations & Word-​of-​Mouth Marketing (14.6%)
  • Broadcast Television (9.3%), Subscription Television (7.7%)
  • Branded Entertainment (7.5%)

VSS analysts categorize the communications industry broadly into the following segments and see growth rates occurring as shown below:

  •  Targeted Media 8.1%
  • Traditional Marketing 3.2%
  • Business and Professional Information & Services 6.4%
  • Education and Training Media & Services 5.3%
  • Entertainment and Leisure Media 5.7%
  • Traditional Consumer Advertising 2.6%

The only sector to be downgraded was the entertainment and leisure media category which includes the consumer printed book market. And traditional consumer advertising was unchanged, reflecting analyst expectations that spending related to elections and the Olympics will offset the ‘sluggish’ first part of this year.

[Source: New VSS Mid-​Term Update. Vss​.com. 12 Apr. 2012. Web. 16 Apr. 2012] 
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.