Consumers now spend more money on media than advertisers, signaling a fundamental shift in the economics of the media industry, says a US based media merchant bank.
The shift, which occurred during 2003, is now just coming to light says Veronis Suhler Stevenson and reflects that advertising is no longer the primary business model for most media content, consumers are.
During 2003, consumers spent $178.4 billion buying or accessing media content, nearly $3 billion more than marketers spent advertising on media outlets to reach consumers – marking the first time ever, consumer spending has accounted as the most significant contributor to revenues generated by the communications industry.
Despite the recent advertising recession turnaround, growth in consumer spending this year and over the next five years will continue to grow at a faster pace. However, when advertising is compared to two other sectors of the communications industry; speciality media & marketing services and institutional end-users, it outstrips them.
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