Strong anticipated demand from major downstream markets will bolster demand
New York, NY (PRWEB) November 14, 2014
The Model Agencies industry experienced moderate growth over the five years to 2014, with revenue expected to moderately increase. Demand for this industry's services depends on corporate advertising expenditures, as a significant portion of industry revenue is garnered through commissions and service fees gained from booking models in print, television, retail and internet advertising campaigns. As corporate profit rapidly rose in 2010, businesses emerged from their cost-conscious slump and began spending more on marketing campaigns in an effort to attract new customers. This improvement in business conditions led to a substantial rebound in industry revenue, as models are commonly hired to promote new products.
In particular, steady demand from major downstream markets, such as cosmetic and beauty product manufacturing, as well as clothing retailers and international apparel manufactures propelled Model Agencies industry revenue growth during the past five years. Additionally, the industry benefited from an increase in demand for per-appearance modeling services, as small- and medium-sized modeling agencies are commonly paid to source a desired number of models for promotional events, trade shows and advertising campaigns. Demand for these services is also highly sensitive to corporate advertising expenditures, which is expected to have expanded in each of the past five years. Furthermore, the rapid growth of online entertainment provided new opportunities for model agencies. For example, industry operator Ford Models was one of the first agencies that directly produced promotional videos online. According to IBISWorld Industry Analyst Stephen Morea, “Social media platforms, including Facebook, Instagram and Twitter, opened a new platform for models and agents to generate revenue by endorsing and promoting products.” These positive factors will help contribute to an expected slight increase in industry revenue in 2014.
The Model Agencies is highly fragmented. Accordingly, the industry has a low level of market share concentration, with the top four model agencies expected to account for a small percent of total industry revenue in 2014. “Although large, established agencies commonly attract talent through reputation, name recognition and connections to vital downstream markets, most model agencies compete on commissions, fees and other factors,” says Morea. In addition, the majority of industry operators are small companies or independent agents; according to IBISWorld estimates, the average industry establishment has less than two employees. Furthermore, the growing popularity of social media and online technology has made it easier for models to self-promote and independent agents to scout for new talents. As a result, industry concentration is expected to remain low during the next five years.
Over the five years to 2019, Model Agencies industry revenue is expected to expand as total advertising expenditure is projected to increase. In addition, strong anticipated demand from major downstream markets, including cosmetic and beauty product manufacturers, clothing retailers and fashion designers, is anticipated to bolster demand for model services. As a result, IBISWorld forecasts that industry revenue will marginally increase in the five years to 2019.
For more information, visit IBISWorld’s Model Agencies in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry represent fashion models in business dealings, such as auditions, bookings and contract negotiations. These agencies earn revenue via commission, usually from the deal they make with the model or another agency.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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