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paidContent - Consumers Spending More in Paid Media Than Ad Supported: VSS Study

This story was written by Rafat Ali.

The annual VSS media survey/forecast is out, and some usual suspects about declining media and ad spend. But more interestingly, according to the study, picked up by NYT, for the first time, in 2008 consumers spent more time with media they paid for, like books or cable TV, than with primarily ad-supported media, like newspapers and magazines. That means people are willing to pay for content, just not all types of content. The money quote from the “S” in VSS, John Suhler: “While we have seen consumer media usage remain generally flat over the past year, the way in which consumers are spending their time continues to evolve. No longer are newspaper and magazine subscription purchases and network prime-time viewing the norm. Instead, they are declining and consumers are spending more time with media which they support and pay for as opposed to ad-supported media…This development is a culmination of two decades of this secular shift towards consumer-controlled media, and shows no signs of slowing.

Now to the more scarier parts of the forecast:

—In five years, ad spending in mags will finally rebound, after five years of decline, but at $9.8 billion, it will still be nowhere near the $12.9 billion it was in 2008.
—By 2013, the video game market will be almost the size of the shrinking newspaper industry.
—Changing consumer behaviors have led to declining print ad spend, particularly in newspapers where spending fell 13.1 percent to $54.16 billion in 2008, and consumer magazine publishing showed a spending drop of 5.8 percent to $22.91 billion.
—Biz user will be the biggest category: what it calls institutional end-user spending will remain the largest and fastest-growing, rising by 5.6 percent annually as a result of strong gains in business info services.
—Some sectors with fast growth: paid product placement, with a CAGR from 2008 to 2013 of 17.6 percent; e-mail marketing and in-game advertisements (both 18.5 percent); mobile advertising outside of texting (33 percent); paid interactive television gaming (38.7 percent); mobile advertising and content tied to broadcast television (35.5 percent); mobile gaming and advertising (46.2 percent); and Internet and mobile home video downloads (34.4 percent).
—Good news for those entering media and communications industry: the sector rise from the fourth position to the third fastest-growing economic sector in the U.S. over the next five years, and also rise to become the fourth largest sector overall by 2013, up from the fifth largest sector in 2008.
—In fact, the next five years will see the communications industry increase 20 percent greater than nominal GDP which will only increase annually 3.0 percent by 2013. 
—Four segments are projected to generate more than $100 billion in spending by 2013—subscription television, professional & business information services, direct marketing, and entertainment media.

By Rafat Ali

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