Americans Embrace Ad-less Media

18 August 2003

The growth of ad-supported media outlets is under threat as Americans embrace entertainment they’ve paid for themselves.

So claims the annual Communications Industry Forecast from media-centric merchant bank Veronis Suhler Stevenson. The report predicts that US consumers will spend much more time over the next five years watching pay-per-view cable networks or DVDs and playing video games. This will come at the expense of advertising-funded TV/radio broadcasters and print media – in part because people want to escape from the ads.

“People are moving toward media that has little or no advertising,” comments Veronis managing director Jim Rutherfurd. “They are voting with their wallets – and spending their time where they spend their money.”

The study found that the average American devoted 3,599 hours to all forms of media in 2002, up 1.8% from 2001. Consumer-funded media accounted for 42.2% of these hours – marking a ten-point rise in share since 1997.

Veronis believes this trend will continue. It predicts that time spent on consumer-supported media will increase 13.8% by 2007, compared with growth of 3.1% at ad-funded media.

Other findings include:

• Television was the most popular medium. The average American devoted 1,701 hours to watching TV last year, a 1.7% rise on 2001. Radio was second with 994 hours.

• Average individual expenditure on media last year was $721.03 (€640.61; £450.33). This is expected to rise to $941.07 by 2007.

• The advertising market is expected to rise 5.5% this year and 6.5% in 2004.

However, not everyone agrees that consumers will keep paying more for their media. “The consumer is king,” declared Euro RSCG Worldwide chief strategy officer Marian Salzman. “Their mantra will be: ‘If you want me to try your [media] products, then you should pay me.’”

Data sourced from: USA Today; additional content by WARC staff