Veronis Suhler Stevenson (VSS) put out a new forecast that predicts that the overall communications category will outpace gross domestic product (GDP) growth, rising at a 5.5% clip on a compound annual growth rate (CAGR) basis between 2010 and '15. Within that overarching category, the entertainment and media sector will grow to $355.74 billion by 2015, representing a 5.6% CAGR.
VSS: Communications to $1.2T By 2015
The U.S. communications industry is projected to grow 4.1% in 2011 to $1.120 trillion. And it will rise at a 5.5% compound annual growth rate (CAGR) in the 2010-2015 period, outpacing nominal gross domestic product (GDP) growth by 90 basis points, according to a new forecast released by Veronis Suhler Stevenson (VSS). By the end of 2015, the communications industry will be the eighth-fastest-growing and fourth-largest U.S. economic component, according to the just released “VSS Communications Industry Forecast 2011-15.”
VSS predicts that within that wide communications bucket, the entertainment and leisure media sector will exhibit a 5.6% CAGR from 2010 to 2015. That sector is expected to expand from $270.36 billion in 2010 to $355.74 billion in 2015.
Major segments that have been negatively impacted in recent years by the migration to digital platforms and economic factors are expected to stabilize during the forecast period. The “traditional consumer advertising media” sector, which includes the broadcast TV, consumer magazine publishing, and broadcast and satellite radio segments, among others, will generate growth in the forecast period, albeit trailing GDP, as brand-related digital products and delivery methods gain a stronger foothold for most traditional media outlets, VSS reported.
“While there are instances of declines and decelerated growth – largely in the more traditional segments of the communications industry – there is a convergence taking place in which everything digital continues to gain greater influence, scope and relative revenue mix, neutralizing the general decline of traditional media,” said John Suhler, co-founder, president and general partner of VSS.
“Business and professional information and services continues to be a fast-growing sector, in part, because it has long embraced digital content and related software services and delivery,” Suhler said. “Also, the sectors that held up well in the last economic downturn – targeted media, business and professional information and services, education and training media and services, and entertainment and leisure media – are all expected to record solid growth in the forecast period, thanks in large part to their migration to digital platforms and delivery methods.”