Veronis, Suhler sees happy days ahead - bright forecast for publishing industry from Veronis, Suhler and Associates Inc - Update

Attention, magazine publishers: If you can just make it through 1992, you'll see better times by 1996, especially if you publish special-interest titles.

That's the promise of Veronis, Suhler & Associates' sixth annual Communications Industry Forecast. The New York City-based investment banking firm sees total advertiser and reader spending on consumer and business magazines hitting $25.1 billion by 1996, up by a compound annual rate of 6.4 percent-a nice hike over 1991's $18.3 billion.

Debt reduction nearly complete

In consumer magazines, total spending will hit $17.6 billion in four years, compared with $12.8 billion last year, while total business magazine spending will rise from $5.6 billion in 1991 to $7.5 billion by 1996. What's the basis for this outlook? The corporate restructurings and debt-reduction efforts that followed the leveraged buyouts of the 1980s are almost complete, says VS&A president John Suhler. For the U.S. economy, VS&A predicts 7.3 percent growth of the gross domestic product in the next four years, better than the 5.8 percent rate between 1986 and 1991.

Not everyone agrees that such a forecast is justified, however. After two years of recession, the VS&A assessment is "a bit optimistic," says Martin Walker, president of New York City-based Periodical Studies Service. "I would like to believe it's true."

The forecast predicts special-interest magazines will see the lion's share of growth in the next four years - accounting for almost all of the 400 - million-unit increase in annual consumer magazine sales that VS&A predicts win hit 5.8 billion by 1996. Circulation lost by general-interest magazines, some 2.1 percent in 1991, will stabilize.

Total magazine advertising will grow to $15.1 billion by 1996, representing a 7.1 percent compound growth rate, compared with 4.5 percent in the last five-year period, 1986-1991. "Through the 1980s, measured media lost share of total advertising to promotional spending. We're not saying that that share returns [to advertising budgets), we're saying it stabilizes," Suhler says. He also predicts that as the economy improves, consumers won't need the "prompts to buy" delivered by direct-response advertising, and advertisers will return to image advertising.

COPYRIGHT 1992 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.
COPYRIGHT 2004 Gale Group