Race On: Will the media outpace U.S. GDP growth as Veronis forecast?
The world is a wonderful place if you’re in the U.S. media business, according to the mid-term update from Veronis Suhler Stevenson.
The private equity firm forecasts the U.S communications industry–which includes everything from Hollywood and cable to education publishing and Yellow Pages–will grow faster than the U.S. economy in 2012. The total communications industry is project to grow by 5.6 percent compared with 4.4 percent GDP growth for the United States.
In particular the top performing segments will include what VSS calls Pure-Play Consumer Internet & Mobile Services, up 18.1 percent, Public Relations & Word-0f-Mouth Marketing, up 14.6 percent and Broadcast TV, up 9.3 percent. Subscription TV is expected to grow by 7.7 percent while branded entertainment is forecast to grow 7.5 percent.
Unsurprisingly, those that will underperform the economy and be down frm last year include consumer magazine publishing, down 2.2 percent; newspapers, down 3.8 percent; and local consumer directories, down 5.6 percent.
But the U.S. economy is far from easy street with uncertainty around the November elections and unemployment still stubbornly high as the improvements are slow and unsteady. This could prove VSS right in one way: the media business, which books a lot of its revenue up to two quarters upfront, will likely outpace the U.S. economy even if there’s a sudden downturn (most of the media business sector companies have betas averaging between 1.3 to 2.0 according to this NYU data sheet). On the other hand some analysts are concerned 2012’s growth outlook is unlikely to match 2011’s and then some stalwart engines of cash growth like cable TV might not do as well as usual.