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TV Shows Signs of Escaping Recession: Veronis Suhler

Spending on TV is expected to increase 6.5% this year, with subscription TV growing 5.8% annually from 2011 to 2016 and broadcast TV, up 5.9% during that period, according to a new forecast from investment firm Veronis Suhler Stevenson.

Veronis Suhler says those spending levels haven't been seen since before the global economic downturn and that the growth is being driven by digital technology.

"Digital's influence is now a constant and significant factor in every sector, segment and sub-segment of the U.S. communications industry," John Suhler, cofounder and president of VSS, said in a statement. "At the same time as digital technology and innovation continue to spur growth in the industry or propel the communications industry forward, emerging digital media and services are significantly changing consumption habits among both institutional and consumer end-users. These developments will drive digital-related expenditures to constitute nearly 40% of the overall U.S. communications industry spending by 2016."

Subscription TV is being bolstered as consumer add more programming and services to existing subscriptions and major marketers shift advertising from the broadcast networks to more cost-effective cable networks, according to the forecast. One potential concern is consumer and regulatory backlash against the bundling of cable channels.

Cable TV will grow 3.6% to $75.92 billion in 2012 while spending on satellite increases 6.3% to $31.77 billion, according to Veronis Suhler. Telco TV spending will jump 12.9% to $5.34 billion.

Spending on cable networks will grow 8.4% in 2012 to $63.65 billion and increase 7.5% from 2011 to 2016, the investment firm says. Interactive TV, video on demand and digital video recorder-based advertising will show double-digit gains from 2011-16.

Overall spending on broadcast TV will jump 9.2% to $52.95 billion in 2012, driving by single-digit advertising gains and double-digit retransmission increases.

Broadcast TV advertising will grow 6.5% in 2012 to $44.71 billion, pushed by the Olympics and presidential elections, according to Veronis Suhler.

Broadcast ad spending is expected to rise 2.5% from 2011 to 2016, according to the forecast.

Spending on online and mobile platforms is expected to rise 25% to $6.34 billion in 2012 and rise 21.7% between 2011 and 2016, while retrans jumps 31.9% in 2012 and grows at a 20.6% rate from 2011 to 2016.