Bank sees media heydays
Trend on a roll toward '02
In its just-released 1997-2002 forecast, the New York-based firm with a media specialty is projecting a compounded annual growth rate of 7.7% in consumer and advertising spending on all media, raising the category level to $613.7 billion.
The projected rate of that combined media spending outstrips by half a percentage point the 7.2% growth rate Veronis envisions for consumer spending in general.
Such are the assumptions that drive Veronis' 12th annual Communications Industry Forecast, a 388-page examination of media trends and consumer habits.
According to Veronis, the average adult American will continue to devote almost the same 9.2 hours a day currently spent on consuming media. At the same time, however, the firm expects the shift toward newer technologies to continue.
Cable, music up
Over the past five years, for example, adult time spent with media supported by consumers -- cable television, recorded music, consumer books, homevideo, movies, videogames and online services -- has gained 32.6% or 275 hours.
In contrast, adult time spent with media supported by advertisers -- broadcast television, radio, daily newspapers, consumer magazines -- has fallen 9.3% or 231 hours.
Veronis expects that by 2002, consumer-supported media will gain another 23.2% or 260 hours, while advertiser-supported media will lose another 10.2% or 230 hours.
Not surprisingly, Veronis expects online advertising to lead all other media in ad growth, compounding at a 48.3% annual growth rate to reach $6.5 billion in 2002. The investment bank noted that ad spending in the category more than quadrupled in 1997 for the second straight year, taking its level to $906 million.
Video spending hot
Spending on subscription video services is also expected to continue posting double-digit gains through 2002. The projected 11.6% annual growth rate, attributed to robust advertiser and end-user spending, would take the category to $66.4 billion.
Radio advertising is projected to be close behind, its projected 9.3% compounded growth rate expected to be a product of continued consolidation, smarter marketing and price flexibility.
Even consumer-magazine advertising is slated to be up a respectable 8% a year, topping the 7% annual growth rate that Veronis reports for the past five years.
Spending on filmed entertainment, meanwhile, is expected to post annual gains of 6%, although the box office portion of this category was projected to grow at a more modest 4.2% rate, reflecting about a 2% gain in volume and another 2% in price hikes.
