Total communications spending will grow 3.6 percent per year over the next five years to more than $1 trillion, according to a report from private-equity firm Veronis Suhler Stevenson. As a direct consequence of this rapid growth, communications will emerge as the third fastest-growing sector in 2013. For comparison, consider that 10 years ago in 1999 this rapidly changing industrial sector contributed about $457 billion to the U.S. economy.

Communications is a vast and sprawling industry, engaged in the production and distribution of content designed to inform and entertain. Communications media are now best defined in terms of their technological forms, rather than by their content. The emergence of print-based media—newspapers, magazines and books—predates the birth of the United States as an independent nation. While printing technology has changed considerably since then, the fundamental character of text and graphic representation has not. The motion picture industry has also been transformed marginally by the addition of sound, color, and increasingly sophisticated technical effects, but its thematic core has remained essentially the same. It has been transformed more substantially, however, by the development of alternative means of media distribution. Broadcast, cable and satellite television systems have extended the reach of the Hollywood production centers at the same time that videotape and DVD technology have made it easier for consumers to access this content in accordance with their individual schedules, tastes and preferences. Similarly, the music industry has been transformed by advances in production and distribution technology as well as by devices designed for the convenience of household consumers. Unlike the movie industry, the music industry is also shifting its distribution model from retail sells of CD’s to online distribution of digital-rights managed electronic files, such as through the now infamous Napster or many other sources for the legal download (at a price) of copyrighted music.

Since the late twentieth century, the Internet has represented potentially the most dramatic influence on the character of the communications industry. Once seen as something of a cottage subsector, the Internet’s popularity exploded with the invention of the World Wide Web by Tim Berners-Lee in 1980, which added the multimedia component to the Internet (videos, music, webpages, email, etc.). Now, there are over 1 trillion unique addresses on the Internet, as it is emerging as a main medium of both integration and migration.

The current economic cycle has accelerated established trends away from mass-market image advertising and toward individualized, technology-enabled access to information and entertainment. The current economic recession and possibly changing consumer behaviors have led to declining print advertising spend, particularly in newspapers where spending fell 13.1 percent to $54.16 billion in 2008, and consumer magazine publishing showed a spending drop of 5.8 percent to $22.91 billion.

[Editor’s Note: See “From the Editor (August 2009)” in this edition of the Gazette for more commentary about the current state of the newspaper and magazine industry.]

By Darrell Woody

Gazette Staff Reporter