Saturday, February 19, 2005
Spending on Reading and Statistical Analysis Plumments
Blogger extraordinaire Rex Hammock often points to the danger of statistics in the hands of journalists. Here's an example from Folio: with the headline, American Household Spending On Magazines Plummets. The article notes that the average American family spent $40,817 on goods and services in 2003, of which "just $127 was spent on reading newspapers, magazines or books, or 0.3 percent."
Since I couldn't find anything in the article to indicate what that $127 had plummeted from, I went to the Advertising Age site to read the piece. And it's apparently true--spending on reading dropped from an inflation adjusted $317, or 1% of total consumer spending, in 1960. The sky is falling!
Of course, the sky is falling on naked readers (see the tragic example of this phenomenon to the left). Because apparel represents only 4% of household spending in 2003, compared to 12% of spending in 1950. (I'd guess that we spend more in real dollars now, but can't quite get that out of the charts and analysis). So the proportion we spend on apparel and reading has dropped at about the same rate since the 50s. But spending on entertainment in general has remained a constant 5% since that time.
Blah, blah. There aren't any real lessons here for publishers. Yes, many reading opportunities today are free (I've spent a large part of my career in the world of 'free' controlled circulation media, so I guess I'm comfortable with this). And paid circulation hasn't been a real profit-driver for a lot of paid-circulation magazines and newspapers for a while--it often costs as much to get the circulation as the revenues that circulation creates. But we monetize that circulation through advertsing and sponsorship.
Ultimately, though, analyzing hard cash transactions misses the point. The economics of media today is more about the expenditure of time with different media opportunities than it is about how much we spend in cash on media. Publishers of old school ink on paper are in competition with other media for the consumer's time--time that consumers spend in a more real way than a few bucks here or there.
Veronis Suhler Stevenson has provided interesting data on this for years in their excellent Communications Industry Forecast & Report.
Here's a long grab that's worth reading carefully:
According to the 2004 edition of the Veronis Suhler Stevenson Communications Industry Forecast & Report, consumers spent 3,663 hours using media in 2003, an increase of 1.6 percent over the previous year. Consumers spent the most time with television in 2003 as they continued to increase cable and satellite television viewing. Second to broadcast and cable television viewing, radio commanded the most attention from consumers climbing 1.2 percent as a result of longer commutes, the emergence of satellite radio and increased time spent with niche formats, such as Hispanic and all-news. Consumers spent less time with broadcast television, recorded music, consumer magazines, daily newspapers and home videos.
Media supported by consumers continued to grab market share from media supported by advertisers in 2003. Time spent with advertising-supported media accounted for 56.4 percent, or 2,064 hours, of the total, while consumer-supported media accounted for the remaining 43.6 percent, or 1,598 hours. Consumer-supported media gained nearly 7.5 share points between 1998 and 2003. Driven by time spent with the Internet, home videos, and videogames and increased media multitasking, the average consumer’s time spent with media will expand at a compound annual rate of 2.1 percent in the forecast period to 4,059 hours in 2008, more than 11 hours per day or 78 hours per week. Average time spent with consumer-supported media will continue to gain share from time spent with ad-supported media in the forecast period. By 2008, consumer-supported media will account for 45.9 percent of the total time spent with media, while ad-supported media will represent 54.1 percent of the total.
It's about time, not money--and print is losing on the time front, too. But media as a whole? Dang! 11 hours a day in 2008? That's a lot of opportunity.
UPDATE: See this article in ScienceNews: "Why Do We Overcommit? Study Suggests We Think We’ll Have More Time In The Future Than We Have Today" for an interesting take on the "economics of available time." (From LifeHacker).
Comments
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Since I couldn't find anything in the article to indicate what that $127 had plummeted from, I went to the Advertising Age site to read the piece. And it's apparently true--spending on reading dropped from an inflation adjusted $317, or 1% of total consumer spending, in 1960. The sky is falling!
Of course, the sky is falling on naked readers (see the tragic example of this phenomenon to the left). Because apparel represents only 4% of household spending in 2003, compared to 12% of spending in 1950. (I'd guess that we spend more in real dollars now, but can't quite get that out of the charts and analysis). So the proportion we spend on apparel and reading has dropped at about the same rate since the 50s. But spending on entertainment in general has remained a constant 5% since that time.Blah, blah. There aren't any real lessons here for publishers. Yes, many reading opportunities today are free (I've spent a large part of my career in the world of 'free' controlled circulation media, so I guess I'm comfortable with this). And paid circulation hasn't been a real profit-driver for a lot of paid-circulation magazines and newspapers for a while--it often costs as much to get the circulation as the revenues that circulation creates. But we monetize that circulation through advertsing and sponsorship.
Ultimately, though, analyzing hard cash transactions misses the point. The economics of media today is more about the expenditure of time with different media opportunities than it is about how much we spend in cash on media. Publishers of old school ink on paper are in competition with other media for the consumer's time--time that consumers spend in a more real way than a few bucks here or there.
Veronis Suhler Stevenson has provided interesting data on this for years in their excellent Communications Industry Forecast & Report.
Here's a long grab that's worth reading carefully:
According to the 2004 edition of the Veronis Suhler Stevenson Communications Industry Forecast & Report, consumers spent 3,663 hours using media in 2003, an increase of 1.6 percent over the previous year. Consumers spent the most time with television in 2003 as they continued to increase cable and satellite television viewing. Second to broadcast and cable television viewing, radio commanded the most attention from consumers climbing 1.2 percent as a result of longer commutes, the emergence of satellite radio and increased time spent with niche formats, such as Hispanic and all-news. Consumers spent less time with broadcast television, recorded music, consumer magazines, daily newspapers and home videos.Media supported by consumers continued to grab market share from media supported by advertisers in 2003. Time spent with advertising-supported media accounted for 56.4 percent, or 2,064 hours, of the total, while consumer-supported media accounted for the remaining 43.6 percent, or 1,598 hours. Consumer-supported media gained nearly 7.5 share points between 1998 and 2003. Driven by time spent with the Internet, home videos, and videogames and increased media multitasking, the average consumer’s time spent with media will expand at a compound annual rate of 2.1 percent in the forecast period to 4,059 hours in 2008, more than 11 hours per day or 78 hours per week. Average time spent with consumer-supported media will continue to gain share from time spent with ad-supported media in the forecast period. By 2008, consumer-supported media will account for 45.9 percent of the total time spent with media, while ad-supported media will represent 54.1 percent of the total.
It's about time, not money--and print is losing on the time front, too. But media as a whole? Dang! 11 hours a day in 2008? That's a lot of opportunity.
UPDATE: See this article in ScienceNews: "Why Do We Overcommit? Study Suggests We Think We’ll Have More Time In The Future Than We Have Today" for an interesting take on the "economics of available time." (From LifeHacker).
