Newspapers are dying off and the television audience is becoming increasingly fragmented, thanks to the advent of DVRs. What will the changes in the way we receive our information mean for the media exchange traded fund (ETF)?

Spending in the communications sector is on pace to decline 1% this year, the first notable loss in at least 40 years, according to a report by a private equity firm. But what’s interesting is what’s projected to take place in the future:

  • Stephanie Clifford for The New York Times reports that in five years, advertising spending in magazines will finally have rebounded after five years of decline — but at $9.8 billion, it will still be nowhere near the $12.9 billion it was in 2008.
  • The video game industry will grow so much that it will dwarf the newspaper industry, which is fighting for its life.
  • Where ad dollars are spent is shifting. The segments where advertising will decline most rapidly in 2009 are newspapers (down 18.7%); consumer magazines (down 14.8%); radio (down 11.7%); and broadcast television (down 10.1%). Ad spending on mobile phones is projected to go up 18.1%, and internet spending is projected to gain 9.2%.

The shift in media is already evident in media ETFs. PowerShares Dynamic Media (PBS) consists of companies that have a presence in both cable television and/or internet, including Comcast (CMCSA), Google (GOOG) and Walt Disney (DIS).

  • PowerShares Dynamic Media (PBS): up 33.2% year-to-date

For more stories about the media, visit our media category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.