LEISURE-TIME OCCUPATIONS TO LIFT ECONOMY, STUDY SAYS.

Byline: Dave McNary Daily News Staff Writer

Americans' hunger for entertainment - and the high-speed communications used to deliver it to all points of the globe - will grow even more insatiable in the coming decade, pushing growth in those industries faster than the rest of the country's economy, a leading analyst said.

``The American public's appetite for media consumption is soaring,'' said Paul Kagan, chairman and chief executive officer of the firm that conducted the study. ``The creators of entertainment and information technology and content are constantly finding new ways to reach and satisfy their audience.''

Paul Kagan Associates's study projects that U.S. entertainment-communications revenue will more than double over the next decade, going from $365 billion last year to an astounding $793 billion in 2007. That means each household will be spending $4,211 a year on such diverse areas as TV, movies, the Internet, pagers, newspapers and theme parks.

``It's as if Americans are beginning to interpret life, liberty and the pursuit of happiness as equivalent to access to basic cable, a VCR and a ticket to `Titanic,' '' Lawrence Gerbrandt, a Kagan senior vice president, said Tuesday.

Frederick Marx, a Michigan-based business consultant, said the Kagan report's conclusions bear out current evidence that Americans are finding more ways to spend more time and money in pursuit of information and entertainment.

``People are making every minute count in seeking out more even when you think that there's no way that they can absorb any more,'' he said. ``America loves to be in the know and to see how much they can absorb. Even with cell phones, pagers and faxes, I get as many phone calls as I used to.''

The Kagan report, which was released Monday, projects that the nation's media-entertainment industry will grow at an annual rate of 8.1 percent for the next nine years - about double the expected expansion rate of the nation's economy.

The fastest growing sector by far will be the Internet, where revenues should grow from $6.1 billion last year to $63.1 billion in 2007. Gerbrandt said the recent decision by Congress to release on the Internet Kenneth Starr's report on President Clinton underscored its growing acceptance.

``The release of the report validates the Internet, which is certainly the most efficient and democratic communications (medium) so far, in the same way that CNN's coverage of the Gulf War was a validation of the whole cable concept,'' he said.

Gerbrandt said the projections of Internet revenue gains are being driven partly by widespread adaption in the workplace. ``People are using the Web to make their lives more efficient, to shift their time around,'' he said. ``You can book your next vacation even though your agent has gone to bed.''

The report says wireless telecommunications also will post an impressive gain from $33.5 billion to $111.7 billion in 2007 for similar reasons.

The report did not include basic phone service in the compilation because of its status as a utility like water and electricity that everyone has as part of everyday life.

The third-fastest growth area will be cable and satellite TV, which will grow from $33.8 billion last year to $91.2 billion in 2007 as new services come online, such as digital programming, and high-speed data and telephone service. Many large cable-TV companies are planning upgrades to two-way interactive systems, and Kagan said consumers are demanding products and services that merge the digital world with entertainment.

``Market demand has led to competition and convergence, the buzz words for the 21st century,'' he said. ``They're the matches that have set the media on fire. For example, we are only beginning to see the explosion of TV channels that will result from the new digital revolution.''

Overall consumer spending in entertainment-communications will grow by an average of 9.2 percent annually and hit $460 billion in nine years. Media advertising will grow by 6.8 percent annually and reach $333 billion in 2007.

Even an established area like publishing will see annual growth of 5.3 percent each. Despite extensive worries about the future of the printed word, publishing will remain the largest sector with revenues of $205 billion in 2007.

Marx said growth also will be driven by the marketing savvy and muscle of worldwide media conglomerates such as News Corp., Walt Disney Co. and Time Warner - each of which owns movie studios, TV networks, publishing houses, theme parks, publications and sports teams.

``The messages are everywhere,'' said Marx. ``As I was pumping gas today, there was a message that came across the screen on the pump about Frito-Lay. You're going to see it in less traditional places.''

Marx said the pervasive message from TV and movies will keep consumers spending. ``There are more disposable dollars and everybody thinks they're entitled to the lifestyle of choice,'' he said. ``When you watch shows on TV, you never see anyone living in poverty.''

Gerald Celente, publisher of the Trends Journal, said the Kagan projections sound realistic but disputed the notion of the Internet receiving widespread use as entertainment.

``Computer technology will continue to make spectacular gains as a financial, research and commercial tool but the digital revolution has grossly oversold it as an entertainment medium that will supplant the established medium,'' said Celente. ``It will come to pass, but we don't see it happening for another 10 years.''

EXPLOSIVE GROWTH

Total U.S. consumer and advertising media revenues are expected to increase 8.1 percent annually in the next 10 years, led by the growth of the Internet and wireless telecommunications.

SEGMENT 1997 (x) 2007 (x) GROWTH (xx)

Internet/

interactive 6,104 63,100 26.3

Wireless

telecommunications 33,489 111,662 12.8

Cable/satellite TV 33,838 91,188 10.4

Out-of-home

entertainment 14,224 32,608 8.7

Radio 13,595 30,868 8.5

Television 45,016 91,046 7.3

Direct marketing 44,007 80,135 6.2

Publishing 121,788 205,007 5.3

Entertainment 52,636 87,839 5.3

TOTAL 364,700 793,413 8.1

(x) in millions

(xx) 10-year compound annual growth rate

SOURCE: Paul Kagan Associates Inc.

CAPTION(S):

Box

BOX: Explosive Growth (see text)