VSS Revises 2009 Forecast
NEW YORK -- February 23, 2009: Veronis Suhler Stevenson has released a revised forecast for the media and communications industry, with this one taking into account the "unprecdented economic downturn" since VSS released a five-year forecast in August 2008.
The private equity firm is now projecting that media spending will fall 0.4 percent in 2009, after an increase of 2.3 percent in 2008. The new projection is down from an earlier growth predicction of 4.9 percent for '09, and it will represent only the second decline since VSS started keeping track 30 years ago. Said VSS, "The continued negative outlook for economic activity, coupled with secular shifts and cyclical trends underway in the media and communications industry, are expected to limit the sector's overall growth in 2009."
VSS EVP/Managing Director James Rutherfurd said, "We believe this mid-term forecast will present investors with a helpful guidepost in a challenging economic environment. The media, information, and education industries have been negatively impacted by the economic downturn. However, as a whole these industries (which comprise the communications industry) have performed better than many other sectors of the U.S. economy, and we are confident that over the medium and long term, the communications industry will regain momentum."
VSS is projecting that broadcast and satellite radio will see a 7.2 percent decline this year, following a 5.8 percent dropoff in 2008. But newspapers will lead the downward trend, with the segment expected to decline by 16.2 percent. Broadcast TV is projected to decline by 9 percent.
The Internet is still a growth area, but VSS sees that growth rate "slowing down considerably" in 2009 -- it's revised its forecast to 9.1 percent growth from an earlier projection of 15.5 percent. Mobile content is projected to grow by 34.2 percent this year, also less than originally predicted.
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