For the first time consumers spend on various media outstrips advertiser spend on media. The difference is over US$ 3 billion. Much of this was on buying or accessing content in various forms. An article in the Media Post carries the details.

The shift, which occurred during 2003, but is just now coming to light via a report released Monday by investment banker Veronis Suhler Stevenson (VSS), reflects that advertising no longer is the primary business model for most media content, consumers are.

In 2003, U.S. consumers spent $178.4 billion buying or accessing media content, nearly three billion more than marketers spent advertising on media outlets to reach consumers, making consumer “end-user” spending the most significant contributor to communications industry revenues for the first time ever. While consumer media spending trends have been on a trajectory to surpass advertising for years, the fact that advertising is now a bit player could have a fundamental impact on the way advertisers, agencies, and media companies think about their business models.

Given that much of the developed world has systems in place for media consumption such s subscription television, or paid for content or even pay per view or niche – and therefore highly priced – content, this was a trend that would have happened sooner or later.

However, I really don’t see India reflecting the same trends for sometime to come. Not because 30% of our nation lives below the poverty line, but because the growth of key media vehicles like satellite television have been haphazard. Growth in Internet connectivity has been steady but not earth shattering. And India’s silly misadventure in the “dot com” era – and the subsequent market crash – has left the industry more or less stagnant.

So how do we move forward –

a) some solid legislation in the area of Conditional Access and the resolution of the addressibility issue

b) lack of confusion on the implementation of DTH – both a and b for television

c) Increased competition in radio through the scrapping of the license fee issue.

d) stricter rules for IPR violation

e) a more accurate system to monitor media consumption – be it TV, radio, print or the web. the current systems “stink” – and I am being charitable when I say that

f) Media Companies being more innovative in the ability to attract audiences and creating compelling content / services – which the consumer will not have an issue paying

The fault doesn’t just lie with Government inertia, it lies also with media companies that have got used to ripping ideas from everywhere, without asking the fundamental question – why will someone pay to consume this content!