VSS: Digital media powers the media biz

Despite a tough overall economic climate, the media business is forecast to grow faster than the U.S. economy in 2012, according to a study from Veronis Suhler Stevenson. “The world is a wonderful place if you’re in the U.S. media business,” quipped Reuters’ Yinka Adegoke. The private equity firm predicted that the communications/media industries will see a combined growth of 5.6 percent to $1.185 trillion, up from 4.2 percent in 2011. That compares with an overall GDP, or gross domestic product, that’s expected to grow at 4.4 percent. And much of the growth in the communications industry stems from digital media. “The perspective has improved this year over recent years largely due to the fact that digital expenditures have become so large,” John Suhler, VSS president, told Forbes’ Jeff Bercovici. “Higher growth rates for digital are offsetting some of the declines or slow growth in traditional media with much higher growth.” Those sectors that will lag behind the economy include consumer magazine publishing, which is expected to be down 2.2 percent; newspapers, down 3.8 percent; and local consumer directories, down 5.6 percent.

Looking ahead to 2015, VSS predicts the industry to continue its brisk pace, reaching $1.419 trillion by 2015, giving it a compound annual growth rate of 5.7 percent. However, the compounded growth rates in traditional advertising sectors are expected to drop a bit at 1.9 percent with spending reaching $160.4 billion because of declines in print advertising. Nevertheless, some of this will be offset by increases in Internet and mobile advertising offerings of branded traditional media.

• Media Businesses Forecast To Hit $1.4 Trillion By ‘15 (MediaPost)

• New Forecast: Media Spending Growing Faster Than GDP (Forbes)

• Race On: Will the media outpace U.S. GDP growth as Veronis forecast? (Reuters)