This may not feel like for much of a recovery, but for the media and communications sector, the economic prospects are bright and getting brighter -- provided you're in the right parts of it.
Overall communications spending by consumers, marketers and institutions is expected to reach $1.419 trillion by 2015, giving it a compound annual growth rate of 5.7%, according to a new forecast from the private equity firm Veronis Suhler Stevenson. That's substantially faster than GDP, which has a projected CAGR of 4.4% over that period.
The report is a mid-year update of VSS's widely cited annual forecast, issued every September. The most recent one projected communications spending to increase at a somewhat lower rate of 5.5%.
The reason for the revision is simple, says VSS president John Suhler: Across the board, digital distribution is accelerating everything. "The perspective has improved this year over recent years largely due to the fact that digital expenditures have become so large," Suhler says. "Higher growth rates for digital are offsetting some of the declines or slow growth in traditional media with much higher growth.
That becomes abundantly clear looking at the breakdown between segments. The fastest growth by far is in Consumer Internet & Mobile Services, tipped to swell 18.1% in 2012. The slowest is in consumer book publishing, newspaper publishing and local directories, all on pace for declines this year.
Of the worst-performing segments, says Suhler, "Many of them are still tied to print as the dominant part of their business model. It's very hard to find an area of print dependence that's growing much, if at all."
Yet even for these segments, the longer-term outlook has been revised upward, and that's because they're finally starting to make real headway building digital revenues. While those revenues aren't yet replacing losses from print, "their digital assets have grown in proportion so that they can start to carry some of the maturity or declines," says Suhler. "Basically, this is showing that digital is helping all the content-based segments of our industry."
It's also proving to be a huge boon for the public relations industry. After pure-play internet and mobile, PR is the fastest-growing segment, with spending set to jump 14.6% this year. That has everything to do with the fact that every company now has to have a social media presence and and interface with its consumers over the web.
"Social media and use of the internet have so dramatically changed corporations' views of the potential of PR to help a company improve its overall revenues and profit," says Suhler. "It's been enabling corporations and other institutions to have a much greater breadth of contact with their publics."
Here's the segment-by-segment breakdown for 2012.
