Revenue for Entertainment Industry Grows 15.5%

Driven by continued growth in videocassette sales and rentals, the U.S. entertainment industry saw revenue jump 15.5% to about $23.8 billion in 1989, according to a just-published report by New York investment banker Veronis, Suhler & Associates.

The revenue growth, while strong, fell short of the industry’s 17% annual growth rate between 1984 and 1989. The investment banking firm, which conducts an annual statistical survey of communications businesses, predicted that movie and television sales growth will slow markedly in the next five years as video and cable technologies mature.

In 1989, retail spending on videocassettes rose 21.5% to $9.6 billion and for the first time surpassed spending on all forms of TV programming. Television spending rose 11.2% to $9.1 billion, while spending at the theatrical box office, fueled by the success of Warner Bros.’s “Batman,” rose 12.7% to $5 billion last year.

Despite much talk about global markets, the report estimated that U.S. film companies received only 37% of their $11.6 billion in movie revenue from abroad, up slightly from 34% in 1984.

The report predicted that combined sales and rentals of videocassettes, which grew at a compound rate of 47.5% from 1984 to 1989, would increase at just 8.8% annually over the next five years.