Zenith Dusts Down Crystal Ball, Sees Robust Five-Year Growth

05 September 2002

Publicis/Cordiant-owned Zenith Optimedia Group, the world’s fourth largest global media services agency, today (Thursday) unveils an upbeat assessment of the US, Canadian and Latin American media scenes through to 2007.

Two key trends emerge from the report, Television in the Americas to 2007:

• Pay-TV will grow rapidly in the Americas, although despite the recent downturn, advertising is to remain the largest source of TV income.

• Nearly half of all homes in the region will switch to digital TV by 2007, although digital terrestrial penetration is forecast to languish with less than 4% growth.

The report covers the US and Canada as well as twelve Latin America nations – Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Guatemala, Mexico, Panama, Puerto Rico, Uruguay and Venezuela. Only in Canada does television rank second in the ad market.

TV ad expenditure reached $63.2 billion in 2000, up from $33.2 billion in 1990 (all figures are US$ at current prices). The global economic downturn caused television adspend to shrink 4.2% in 2001, but Zenith expects adspend to return to growth in 2002, then accelerate over the next few years as economic stability returns. We forecast television adspend in the Americas to reach $90.5 billion in 2007.

But TV subscription revenues are catching up on ad revenues as the number of subscribers continues to rise – as does average revenue per subscriber. These revenues have also proved much less vulnerable to the economic downturn than advertising income. The agency calculates that households in the Americas paid $48.6 billion for pay-TV in 2001, up from $16.9 billion in 1990. By 2007 subscription revenue are predicted to reach $78.8 billion.

Meanwhile, digital TV – which did not begin to take-off until 1996 – will enjoy significant growth rates in cable and satellite homes, reaching an estimated penetration of 66% of all homes by 2007. Digital terrestrial homes, on the other hand, are unlikely to exceed 3.8% over the next five years.

The report is available both in hard and soft copy from Zenith Optimedia.

Data sourced from: Zenith Optimedia; additional content by WARC staff