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U.S. communications growth seen at 7%

Published on .

NEW YORK -- Veronis, Suhler & Associates, in its annual forecast, predicts a 7% compound annual growth of the communications industry over the period 1995 to 2000. VSA says total communications industry spending will climb to $353.3 billion in 2000, from $251.5 billion in 1995. Among the ten industry segments it covers, interactive digital media will register the largest five-year compound annual growth with a 19.4% gain, followed by subscription video services (8.5%) and recorded music (8.1%).

The forecast said advertising across all communications industry segments will increase at a 6.9% compound annual rate, versus 4.1% in the 1990 - 1995 period, rising to $144.7 billion in 2000, from $103 billion in 1995. "Audience fragmentation will present a challenge to advertisers," noted John S. Suhler, president of Veronis, Suhler. "On the one hand, use of any single medium will be less effective than in the past. On the other hand, with a wider array of media opportunities, advertisers will be better able to target their messages, and a broader supply of media outlets will keep advertising rates in check."

Copyright July 1996 Crain Communications Inc.

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