Entertainment spend hit $60.6 bil in 1999

B.O. gives off rich, $7.4 bil aroma

NEW YORK — Consumers and advertisers dropped a hefty $60.6 billion on entertainment media in the U.S. in 1999, up a full 7% from the previous year, according to an annual communications industry report released by Gotham-based media merchant bank Veronis Suhler.

Veronis expects that figure, which includes revenues from the film, music and interactive entertainment industries, to swell to $84 billion by 2004, repping a 6.7% compound annual growth rate, or CAGR.

Leading the charge was B.O. spending. Spurred by a record 17 features topping the $100 million mark, expenditures jumped 7.2% to $7.4 billion. A healthy string of moderate $25 million- to $50 million-grossing pics aimed at mature auds also helped, Veronis said. The firm projects that B.O. receipts will continue to grow at a 6.8% CAGR through 2004.

Cable, sat cashed in

On the small screen, cable and satellite TV showed robust spending growth, enjoying a boost of 11.9% to end 1999 at $56.8 billion. But the forecasts are nearly as impressive: Veronis sees cable and satellite spending at $86.4 billion by 2004 with a CAGR of 8.8%.

By contrast, growth in ad spending on broadcast TV was relatively anemic, with an increase of just 4.4% to $40.9 billion. Still, those gains come despite tough comparisons with political and Olympic ad buys in ’98. And Veronis sees TV ad spending rising to $51 billion by 2004.

In recorded music, spending rose 6.8% to $14.7 billion, but forecasts for the next few years reflect more caution: Sales will reach $16.3 billion by 2004, implying a 2.1% CAGR, compared with 4% over the last five years.

Growth rates in the online sector were the most dramatic. Ad spending ballooned by 140.6% last year to $4.6 billion, and will hit a whopping $24.4 billion by 2004, implying a blistering 39.5% CAGR, Veronis said.

The firm also found that the number of households wired to the ‘Net swelled 41.6% to 40.5 million and could hit 67.1 million in four years.

Overall, the communications sector, including film, TV, music, print and online content, enjoyed an 8.1% increase in spending to $524.7 billion.

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