Has media reached a new usage plateau? A new level of consumer saturation? What’s a new view of the future for media?
Private equity firm Veronis Suhler Stevenson (VSS) has released a new study forecasting spending in the media industry into 2011. The study found that while communications spending increased in 2006, consumer media usage actually dropped after multiple years of growth.
Total communications spending grew 6.8 percent to $885.2 billion in 2006. VSS predicts that in the first half of 2007, the industry will grow by 6.4 percent, making it among the fastest growing sectors of the U.S. economy.
VSS also predicts that Internet advertising will replace newspapers as the largest ad medium by 2011.
Meanwhile, media usage per person declined last year by 0.5 percent, according to their data, due to changing consumer behavior and the efficiency of digital media. VSS found that digital alternatives for news and entertainment require less time investment than traditional media. VSS predicts consumer media usage to stabilize this year and slightly increase through 2011.
Consumers are also moving away from ad-supported media, such as broadcast TV and newspapers. VSS labels options such as video games and cable TV “consumer-supported platforms,” and says their usage is increasing as time with ad-supported media decreases.
“We are in the midst of a major shift in the media landscape that is being fueled by changes in technology, end-user behaviors and the response by brand marketers and communications companies,” said James Rutherfurd, EVP and Managing Director for VSS. “We expect these shifts to continue over the next five years, as time and place shifting accelerate while consumers and businesses utilize more digital media alternatives, strengthening the new media pull model at the expense of the traditional media push model.”
If we have reached a new plateau of media consumption, it is worthwhile to take a look around the media landscape right now. Who has survived? Which platforms are still thriving? Still hanging on?
More specifically, take a look at radio. Good news…radio still operates with strength. It is simple, reliable, cost-effective and still is used weekly by 94% of the population. Radio has gone through tremendous industry change and competitive challenge from new media options…and radio still survives.
Is radio ready to rev it back up and go after the demographic it has nearly lost (teens) or the demographic it has turned away from (Boomers)?