VSS: Media Spend Rose Over 35-Year Arc

Over the past 35 years, U.S. media and communications spending rose at a compound annual growth rate of 8.1 percent, second only to the services sector, according to private equity firm Veronis Suhler Stevenson. It also outpaced the 6.5 percent gain for nominal GDP.

The expansion means that the business grew from the tenth largest economic sector worth $63.1 billion, accounting for 3.9 percent of U.S. gross domestic product, in 1975 to the fifth largest in 2009 with $877.9 billion, or 6.3 percent of GDP.

The data-points are part of a review that Veronis is releasing Tuesday as part of its unveiling of a database of historical industry figures since 1975.

The launch of the VSS Historical Database, which will be updated every year, comes ahead of the late summer release of the VSS Communications Industry Forecast (VSS Forecast), which the firm has published since 1986.

Over the 35-year time frame, the entertainment and leisure sector (including subscription TV) has jumped from a 15.9 percent share of communications spending to 30.5 percent, making it the largest business in the space, according to Veronis.

Subscription TV itself has been the fastest-growing communications segment, expanding at a 15.5 percent CAGR to $155.1 billion last year, which also makes it the biggest segment.

Here is a look at some other highlights from the Veronis report:

* annual consumer media consumption is up almost 700 hours from 2,843 hours per person in 1975 to 3,532 in 2009

* consumer-supported media, including video games, Internet and mobile services, now accounts for almost 50% of those hours spent annually

* traditional advertising media, such as broadcast TV and radio, newspapers, and consumer magazines and yellow pages, struggled to keep pace with the economy since 1975 with a CAGR of 5.4%

* the key industry growth driver has been digital-based media through business information and services, such as business and professional information, and entertainment and leisure media. They each recorded 10.1% CAGR—nearly double economic growth