Media Money: Americans will spend an average...

Media Money: Americans will spend an average of $546 this year on media and entertainment, ranging from movies to music to computer online services, up 6% from 1996, according to a survey released Friday.

The same growth is expected next year, rising to an average of $583, and spending will increase to an estimated $685 by the year 2001, said media investment banking firm Veronis, Suhler & Associates Inc.

The biggest chunks of the 1997 pie so far are $156 for subscription television, $85 for books and $83 for home videos. Recorded music follows at $59, daily newspapers at $52, magazines at $37, computer online services at $27, movies at $26, video games at $17 and computer software at $4.

The report confirms the industry view that people are spending less time watching television and reading newspapers and magazines and spending more hours watching videos at home and engaging with cyberspace online (nine more hours a year on average, the largest jump registered in any category).

Advertising, however, has not necessarily followed the same trend. Ad spending on broadcast TV networks grew a strong 14.6% last year and is projected to build at 4.9% a year, to $17.3 billion in 2001. By then, Internet advertising, while growing fast, will still amount to only $2.5 billion, the firm anticipates.

Veronis, Suhler believes that while flat-rate Internet access pricing will remain the norm over the next five years, the basic price will begin to creep up, starting next year. At the same time, the forecast says, the number of Internet service providers will drop. The reason: “Most, if not all, ISPs are losing money and a shake-out is likely.”