The latest edition of PQ Media's annual forecast shows that following a surge in response to COVID, growth in consumer spending on media is again trending downward, both in the U.S. and worldwide.
In the U.S., growth in consumer spending on media decelerated to 5.1% (rising to $510.2 billion) in 2022, down from a gain of 6.2% in 2021. While the U.S. remains the world's largest consumer media and tech market, accounting for 23.3% of worldwide consumer spending – with total spending of $509.74 billion in 2022 – it is expanding at a slower rate than the rest of the world.
Globally, consumer spending on media content and technology decelerated to 6.3% (rising to $2.186 trillion) in 2022, following 2021's 6.9% surge, which was the strongest growth in a decade. Global consumer spending on overall media content grew 10.8% in 2022 to $930.66 billion, while total media-related technology spend rose 3.3% to $1.255 trillion. Consumer spend on digital media content and tech worldwide increased 7.9% in 2022 to $1.589 trillion, while end-user spend on traditional media content and tech was up 2.4% to $596.74 billion. According to PQ, total consumer spend on radio stood at $23 billion for 2022.
For the downtrends, PQ's forecast puts the blame on macroeconomic headwinds, such as inflation, interest rate hikes, regional banking failures and geopolitical tensions, which led many consumers to trim discretionary spending budgets. Also contributing to 2022's deceleration was a return to normal behaviors: students went back to the classroom, reducing the need to upgrade various digital technology to accommodate remote learning, such as new laptops, tablets and smartphones. Similarly, many workers were required to return to corporate offices in 2022, diminishing the need for new home offices that required new PCs, home audio systems and higher-speed broadband access.
Looking forward, PQ sees pre-pandemic secular trends re-emerging which directly link consumer media usage to consumer media spending, in which major global events like the Olympics, World Cup and political elections drive up spending growth in even years, followed by decelerated growth in odd years. Media content and tech categories impacted by these long-term trends include single-copy newspaper and magazine sales, video-on-demand and digital video downloads, and television set and smart speaker upgrades. Additionally, some media content and tech are simply becoming obsolete, primarily due to improved distribution methods and/or the shift to newer digital media platforms.
“PQ Media projects consumer media and tech expenditures will lose even more steam during the 2023-2027 period, as the pandemic-driven forces that sparked unexpected spending surges in many media and tech categories in 2020-2021 continue to fade,” PQ Media CEO Patrick Quinn says. “While the pandemic effect briefly interrupted key secular trends in that two-year period, this was simply a near-term disruption of long-term industry trends that will continue over the next several years, resulting in slower growth or outright declines across various digital and traditional media content and tech categories.”