MediaIndustry US Datamonitor Sept 2003

Media in the United States
Industry Profile
Reference Code: 0072-2104

Publication date: September 2003
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United States - Media

© Datamonitor (Published September 2003) Page 2
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Market Value
The US media market grew by 4.7% in 2002 to reach a value of $308.8 billion.
Market Value Forecast
In 2007, the US media market is forecast to have a value of $390.8 billion, an

increase of 26.5% since 2002.
Market Segmentation I
The leading revenue source for the US media market is advertising, which accounts
for 50.9% of the market value share.
Market Segmentation II
In terms of value, the US accounts for 37.3% of the global media market.

CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
CHAPTER 1 Market Overview 7
1.1 Market Definition 7
1.2 Research Highlights 7
1.3 Market Analysis 7
CHAPTER 2 Market Value 9
CHAPTER 3 Market Segmentation I 10
CHAPTER 4 Market Segmentation II 11
CHAPTER 5 Competitive Landscape 12
CHAPTER 6 Leading Companies 13
6.1 ABC, Inc. 13
6.2 AOL Time Warner Inc. 13
6.3 Comcast Holdings Corporation 13
6.4 Gannett Co., Inc. 14
6.5 Omnicom Group Inc. 14
6.6 The Walt Disney Company 14
6.7 Viacom Inc. 14
CHAPTER 7 Market Forecasts 16
7.1 Market Value Forecast 16

CONTENTS
CHAPTER 8 Demographics 17
CHAPTER 9 Further Reading 18
9.1 Sources 18
9.2 Related Datamonitor Research 18

CONTENTS
LIST OF TABLES
Table 1: United States Media Market Value: $ billion, 1998-2002 ..................................... 9
Table 2: United States Media Market Segmentation I: % Share, by Value, 2002 ........... 10
Table 3: United States Media Market Segmentation II: % Share, by Value, 2002 .......... 11
Table 4: United States Media Market Value Forecast: $ billion, 2002-2007.................... 16
Table 5: United States Size of Population (million) , 1998-2002 ..................................... 17
Table 6: United States GDP (1995=100), 1998-2002 ...................................................... 17
Table 7: United States Inflation, 1998-2002..................................................................... 17

MARKET OVERVIEW
CHAPTER 1 MARKET OVERVIEW
1.1 Market Definition
The value of the media market includes: the total value of advertising across ten key
categories; the revenues generated via broadcasting and cable TV subscriptions and
license fees; revenues generated via the production, distribution and marketing of
movies, television shows and recorded music; the revenue generated through the
sporting, sales and marketing activities of sports organisations; and revenues
generated through sales of and subscriptions to books, newspapers and magazines.
1.2 Research Highlights
In terms of value, the US media market is by far the largest in the world.
The Pay-TV revolution continues to drive growth in the broadcasting sector, but the
expansion of its subscriber base is beginning to slow.
The music industry is expected to face a period of significant change during the next
few years. This is largely due to the continued threat of Internet piracy and falling
album sales across much of the market.
1.3 Market Analysis
In terms of value, the US media market is by far the largest in the world. In 2002, the
market was worth $308.8 billion, an increase of 19.0% since 1998. In comparison to
the Japanese media market, which is the second largest globally, the US market is
almost three times bigger.
Between 1998-2002, the market was primarily driven by the increasing demand for
subscription TV and the rapid growth in DVD sales. These growth drivers will remain
influential throughout the next five years. However, growth in subscription TV demand
is expected to slow. Consequently, the market is forecast to reach a value of $390.8
billion in 2007, an increase of 26.5% since 2002.
The leading revenue source of the US market is advertising, which accounts for half
of the market value share. In 2002, this sector was worth $157.2 billion, an increase
of 8.2% since 1998. The fastest growing sector between 1998-2002 was movies &
entertainment, which achieved expansion of 47.4%.
The advertising sector is expected to lose influence as a revenue source during the
next few years, as it will be outperformed by both the broadcasting & cable TV and

MARKET OVERVIEW
movies & entertainment sectors of the market between 2002-2007. The movies &
entertainment sector will again be the strongest performer during this period, with
expected expansion of approximately 50%. Consequently, this sector will strengthen
its position as the #2 revenue source for the market, gaining 3.5 percentage points
during the period. In contrast, the advertising sector will decline by three percentage
points.

MARKET VALUE
CHAPTER 2 MARKET VALUE
The US media market grew by 4.7% in 2002 to reach a value of $308.8 billion.
The compound annual growth rate of the market in the period 1998-2002 was 4.5%.
The strongest growth was in 1999, when the market grew by 8.0%.
Table 1: United States Media Market Value: $ billion, 1998-2002
Year $ billion % Growth
1998 259.4
1999 280.2 8.00%
2000 299.5 6.90%
2001 294.9 -1.50%
2002 308.8 4.70%
CAGR, 1998-2002: 4.5%
Source: Datamonitor DATAMONITOR
Figure 1: United States Media Market Value: $ billion, 1998-2002
$ billion % Growth
350 10.0%
300 8.0%
250 6.0%
% Growth
$ billion
200 4.0%
150 2.0%
100 0.0%
50 -2.0%
0 -4.0%
1998 1999 2000 2001 2002

MARKET SEGMENTATION I
CHAPTER 3 MARKET SEGMENTATION I
The leading revenue source for the US media market is advertising, which accounts
for 50.9% of the market value share.
Movies & entertainment generates 17.7% of the market's value, while broadcasting &
cable TV is responsible for 15.8% of the market value share.
Publishing is the least significant revenue source for the US market, accounting for
15.7% of the value share.
Table 2: United States Media Market Segmentation I: % Share, by Value,

2002
Category % Share
Advertising 50.90%
Movies & Entertainment 17.70%
Broadcasting & Cable TV 15.80%
Publishing 15.70%
Total 100.0%
Figure 2: United States Media Market Segmentation I: % Share, by Value,

2002
Publishing
15.7%
Broadcasting &
Cable TV Advertising
15.8% 50.9%
Movies &
Entertainment
17.7%

MARKET SEGMENTATION II
CHAPTER 4 MARKET SEGMENTATION II
In terms of value, the US accounts for 37.3% of the global media market.
In comparison, Europe generates 31.0% of the global market's value, while Asia-
Pacific represents 22.6%.
Table 3: United States Media Market Segmentation II: % Share, by Value,

2002
Geography % Share
US 37.30%
Europe 31.00%
Asia-Pacific 22.60%
Rest of the World 9.10%
Total 100.0%
Figure 3: United States Media Market Segmentation II: % Share, by Value,

2002
Rest of the
World
9.1%
US
Asia-Pacific 37.3%
22.6%
Europe
31.0%

COMPETITIVE LANDSCAPE
CHAPTER 5 COMPETITIVE LANDSCAPE
Due to its position as the world’s leading media market, the US is home to several of
the globe’s largest media companies. These include companies that specialize in one
sector of the market, like Gannett (publishing), Omnicom (advertising) and ABC
(broadcasting). The market is also home to a number of large multimedia companies,
such as Viacom, Walt Disney and AOL Time Warner. Furthermore, most of the major
foreign media giants (including Sony, Bertelsmann and Vivendi Universal) also hold
significant operations within the US.
In the advertising sector, television is the major distribution channel. As the number
and diversity of TV channels increases, advertisers and advertising companies will be
able to focus their campaigns at highly specific target audiences. This should
enhance the success of these campaigns, which points to a bright future for the
sector following the last few years of decline.
The Pay-TV revolution continues to drive growth in the broadcasting sector, but the
expansion of its subscriber base is beginning to slow. However, the development and
continued rollout of digital technologies will ensure positive growth for the sector
throughout the next five years. The ongoing rise in channel numbers will weaken the
attractiveness of individual channels to advertisers, meaning that broadcasters need
to pursue a diverse multi-channel strategy to safeguard their advertising revenues.
Movies continue to be a major leisure time activity for many Americans. Cinema
admissions are expected to remain stable, while rising prices should ensure revenues
and profits levels are maintained by most of the major players in the industry. In
contrast, the music industry is expected to face a period of significant change during
the next few years. This is largely due to the continued threat of Internet piracy and
falling album sales across much of the market. Consequently, most of the industry
giants (for example, Sony, EMI and BMG) are developing new strategies that
embrace the Internet and new technologies, such as MP3.
In the publishing sector, newspaper circulations have followed a downward cycle

during the last few years. While this trend is expected to slow, newspaper publishers
will need to use to access new revenue streams, such as the Internet, to negate the
loss of subscription and advertising revenues. In contrast, magazine and book
publishers will thrive as readership rates for these formats continues to grow.

LEADING COMPANIES
CHAPTER 6 LEADING COMPANIES
6.1 ABC, Inc.
ABC is one of the leading broadcasters in the US. For the fiscal year ended in
September 2002, the company generated revenues of $9.8 billion, an increase of
2.2% on the previous year.
The company operates through three primary units: ABC Television Network
broadcasts through approximately 225 television stations across the US; ABC Cable
Networks owns and operates cable television channels, including ABC Family, the
Disney Channel, SOAPnet and Toon Disney; and its Buena Vista Television unit
produces shows for syndication and other networks. ABC, which is a subsidiary of
Walt Disney, is headquartered in New York City.
6.2 AOL Time Warner Inc.
AOL Time Warner is the world's first fully integrated, Internet-powered media and
communications company. The company was formed in connection with the merger
of America Online and Time Warner, which was finalized on January 11, 2001. For
the fiscal year ended in December 2002, the company generated revenues of $40.96
billion.
AOL Time Warner classifies its business interests into six fundamental areas;
America Online, Cable, Filmed Entertainment, Networks, Music, and Publishing. The
company is headquartered in New York City.
6.3 Comcast Holdings Corporation
Comcast Holdings is the largest cable TV operator in the US. For the fiscal year
ended in December 2002, the company generated revenues of $12.5 billion.
The company possesses approximately 21.3 million subscribers throughout the US.
In addition to its cable operations, the company also owns stakes in electronic retailer
QVC and in Philadelphia’s Flyers (hockey) and 76ers (basketball) sports teams.
Comcast is headquartered in Philadelphia, Pennsylvania.

LEADING COMPANIES
6.4 Gannett Co., Inc.
Gannett is the largest newspaper group in the US, in terms of circulation. The
company is also involved in television programming. For the fiscal year ended
December 2002, the company generated revenues of $6.42 billion.
The company has operations in 45 US states, the District of Columbia, Guam, the
UK, Germany and Hong Kong. Its 95 daily newspapers have a combined daily paid
circulation of 7.8 million. The company also has a large interest in broadcasting and
the Internet. Gannet is headquartered in McLean, Virginia.
6.5 Omnicom Group Inc.
Omnicom is a holding company operating advertising agencies. For the fiscal year
2002, it generated revenues of $7.5 billion.
The company operates advertising agencies that plan create, produce, and place
advertisments for its clients in various media such as television, radio, newspapers,
magazine, and the Internet. It has operations on all the continents. Omnicom is
headquartered in New York City.
6.6 The Walt Disney Company
Although Walt Disney himself once famously commented that it all started with a
mouse, the company he founded has grown into one of the largest media
conglomerates in the world. Today, The Walt Disney Company specializes in five
business segments: media networks, studio entertainment, parks and resorts,
consumer products and the Internet. In fiscal 2002, revenues totaled $25.3 billion,
equalling the total from the previous year.
Disney's media interests cover television and publishing including America's ABC
netowork and the sports channel ESPN. Its film studios include Touchstone and
Miramax, while its theme parks are among the world’s most famous. The Walt Disney
Internet Group develops, publishes and distributes content for online services
intended to appeal to broad consumer interest in sports, news, family and
entertainment. The company is headquartered in Burbank, California.
6.7 Viacom Inc.
Viacom, one of the largest media companies in the world, specializes in

entertainment and publishing. For the fiscal year ended December 2002, the
company generated revenues of $24.6 billion.

LEADING COMPANIES
The company has operations involved in nearly every segment of the international
media marketplace. Its operations include MTV Networks, Paramount Television, and
Showtime Networks. National Amusements is the parent company of Viacom. Viacom
is headquartered in New York City.

MARKET FORECASTS
CHAPTER 7 MARKET FORECASTS
7.1 Market Value Forecast
In 2007, the US media market is forecast to have a value of $390.8 billion, an

increase of 26.5% since 2002.
The compound annual growth rate of the market in the period 2002-2007 is predicted
to be 4.8%. The strongest growth is predicted for 2005, when the market is forecast
to grow by 5.1%.
Table 4: United States Media Market Value Forecast: $ billion, 2002-2007
Year $ billion % Growth
2002 308.8 4.70%

2003 323.2 4.60%
2004 339.1 4.90%
2005 356.3 5.10%
2006 374.0 5.00%
2007 390.8 4.50%
CAGR, 2002-2007: 4.8%
Figure 4: United States Media Market Value Forecast: $ billion, 2002-2007
$ billion % Growth
450 5.2%
400 5.1%
5.0%
350
4.9%
300
% Growth
4.8%
$ billion
250 4.7%
200 4.6%
150 4.5%
4.4%
100
4.3%
50 4.2%
0 4.1%
2002 2003 2004 2005 2006 2007

DEMOGRAPHICS
CHAPTER 8 DEMOGRAPHICS
Table 5: United States Size of Population (million) , 1998-2002
Year Population (million) % Growth
1998 270.5
1999 272.8 0.90%
2000 275.1 0.80%
2001 277.6 0.90%
2002 279.8 0.80%
Table 6: United States GDP (1995=100), 1998-2002
Year 1995=100 % Growth
1998 112.9
1999 117.4 4.00%
2000 122.3 4.10%
2001
2002
Table 7: United States Inflation, 1998-2002
Year Inflation Rate (%) % Growth
1998 1.5
1999 2.2 41.40%
2000 3.4 54.30%
2001 2.8 -16.10%
2002

CONTENTS
CHAPTER 9 FURTHER READING
9.1 Sources
This report is based on a combination of primary Datamonitor research, including

online, face-to-face and telephone interviews with consumer and industry players,
and secondary research using various sources (including trade associations, news
providers and others).
Industry Associations
International Advertising Association

IAA WorldService Center
521 Fifth Avenue
Suite 1807
New York, NY 10175
E-mail: iaa@iaaglobal.org
National Association of Broadcasters
1771 N Street
NW Washington, DC 20036
E-mail: nab@nab.org
Recording Industry Association of America
1330 Connecticut Avenue N. W., Suite 300
Washington, D.C. 20036
Web: www.riaa.org
9.2 Related Datamonitor Research
Datamonitor Reports
iTV content in Europe to 2005 ($3995)

iTV branding and retail: Business model and service development to 2006 ($3995)
Wireless Advertising ($3995)
Broadcaster strategies for the new TV environment ($2695)
Telcos in the broadcast sector ($995)
Digital and interactive TV markets in Europe to 2006 ($3995)
iTV games and gambling in Europe ($3995)
Anti-piracy measures in digital and interactive TV ($995)
Changing regulation for digital and interactive TV ($995)
AOL Time Warner ($995)

CONTENTS
Datamonitor Industry Profiles
Global Media ($200)

Media in Asia-Pacific ($200)
Media in Europe ($200)
Media in Canada ($200)
Media in China ($200)
Media in Japan ($200)
Media in France ($200)
Media in Germany ($200)
Media in Italy ($200)
Media in Spain ($200)
Media in the UK ($200)


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Media in the United States

Reference Code: 0072-2104

Datamonitor is a leading business information company specializing in industry

Through its proprietary databases and wealth of expertise, Datamonitor provides

All Rights Reserved.

United States - Media

Market Value Forecast

In 2007, the US media market is forecast to have a value of $390.8 billion, an

United States - Media

CHAPTER 1 Market Overview 7

1.1 Market Definition 7

1.2 Research Highlights 7

1.3 Market Analysis 7

CHAPTER 2 Market Value 9

CHAPTER 3 Market Segmentation I 10

CHAPTER 4 Market Segmentation II 11

CHAPTER 5 Competitive Landscape 12

CHAPTER 6 Leading Companies 13

6.1 ABC, Inc. 13

6.2 AOL Time Warner Inc. 13

6.3 Comcast Holdings Corporation 13

6.4 Gannett Co., Inc. 14

6.5 Omnicom Group Inc. 14

6.6 The Walt Disney Company 14

6.7 Viacom Inc. 14

CHAPTER 7 Market Forecasts 16

7.1 Market Value Forecast 16

United States - Media

CHAPTER 9 Further Reading 18

9.2 Related Datamonitor Research 18

United States - Media

Table 1: United States Media Market Value: $ billion, 1998-2002 ..................................... 9

Table 4: United States Media Market Value Forecast: $ billion, 2002-2007.................... 16

Table 5: United States Size of Population (million) , 1998-2002 ..................................... 17

Table 6: United States GDP (1995=100), 1998-2002 ...................................................... 17

Table 7: United States Inflation, 1998-2002..................................................................... 17

United States - Media

CHAPTER 1 MARKET OVERVIEW

1.1 Market Definition

1.2 Research Highlights

1.3 Market Analysis

United States - Media

United States - Media

CHAPTER 2 MARKET VALUE

Table 1: United States Media Market Value: $ billion, 1998-2002

Year $ billion % Growth

CAGR, 1998-2002: 4.5%

Source: Datamonitor DATAMONITOR

Figure 1: United States Media Market Value: $ billion, 1998-2002

Source: Datamonitor DATAMONITOR

United States - Media

CHAPTER 3 MARKET SEGMENTATION I

Table 2: United States Media Market Segmentation I: % Share, by Value,

Source: Datamonitor DATAMONITOR

Figure 2: United States Media Market Segmentation I: % Share, by Value,

Source: Datamonitor DATAMONITOR

United States - Media

CHAPTER 4 MARKET SEGMENTATION II

Table 3: United States Media Market Segmentation II: % Share, by Value,

Source: Datamonitor DATAMONITOR

Figure 3: United States Media Market Segmentation II: % Share, by Value,

Source: Datamonitor DATAMONITOR

United States - Media