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Wednesday, August 17, 2005

28 Cents an Hour 

Veronis Suhler Stevenson's annual Communications Industry Forecast has been released, and you can read a summary of its contents here. You can buy a copy, or individual chapters, here.

There are a number of interesting predictions in the Forecast, but I usually focus on one area, media usage, since consumer time and attention is the greatest competitor we in b2b media have. If we can't command the eyeballs, we aren't going to get paid.

In noodling over the numbers, it's also apparent that media in general is a good value.

[My friend Rex Hammock often notes the disasters that occur when journalists wrestle with statistics, but herewith my own small contribution to "dis-stat-ster."]

The VSS Forecast predicts that by 2009, the average person will be using media 9.73 hours per day, and spending $1,023.69 per year on that media. That works out to 28.8 cents an hour, which seems a pretty good value. (The Forecast makes a distinction between advertising-based media--commanding 54.9% of consumer time--and consumer-supported media--45.1% of consumer time--but I have some trouble with these numbers. When I watch ABC (ostensibly free and ad-supported), I still pay DirecTV for the privilege of getting a signal. So I'm using VSS's total numbers for media time and expense to derive the average per hour. Your results may vary.)

That 28.8 cents an hour will work out to $88.7 million per media hour spent by all Americans (projected population of 308 million in 2009, according to the US Census), or $863 million per "media day." Not a bad take from the consumer side. And this doesn't account for advertising revenues generated alongside that consumer payment.

All very interesting, for averages.

Here are some of the Shaw family's current media consumption costs, by hour, based on estimates of our usage. We're a family of four, with two young kids, so I've divided these down to get a per-person, per-hour cost, where it makes sense.

Internet/Broadband: 3.5 cents
Television: 20 cents
Magazines: 31 cents (We're a pretty magazine-oriented family--even the kids have their own subscriptions)
Newspaper: $1.07 (divided by two, instead of four)
DVD Viewing, per DVD: $2
Theatrical Movie, per movie: $3.50 (not including soda and popcorn)

For us, good media value is created by the amount of time we spend on each activity. Our Internet/Broadband costs aren't cheap, but look that way on a per-hour basis. And our television costs could be cheaper per hour, if we watched more of it (I used five hours per day for the family as a whole, which is about right for us.) Don't get me started on the cost of taking the family to a movie theater--$68, last time we went, all inclusive, which has caused us to look more closely at our pay-per-view options.

Of course, I'm positing value on the basis of lowest cost, as opposed to the true value we derive based on the quality of the entertainment, information and knowledge we consume. The time I spend with newspapers is far more valuable to me than the time I spend watching television, in this sense, though it costs more.

And it's this true value that will determine which eyeballs migrate to which mediums.

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