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Official definition

The Sector as a Whole

The Information sector comprises establishments engaged in the following processes: (a) producing and distributing information and cultural products, (b) providing the means to transmit or distribute these products as well as data or communications, and (c) processing data.

The main components of this sector are motion picture and sound recording industries; publishing industries, including software publishing; broadcasting and content providers; telecommunications industries; computing infrastructure providers, data processing, Web hosting, and related services; and Web search portals, libraries, archives, and other information services.

The unique characteristics of information and cultural products, and of the processes involved in their production and distribution, distinguish the Information sector from the goods-producing and service-producing sectors. Some of these characteristics are:

1. Unlike traditional goods, an ''information or cultural product,'' such as an online newspaper or a television program, does not necessarily have tangible qualities, nor is it necessarily associated with a particular form. A movie can be viewed at a movie theater or through television broadcast, video-on-demand, or streaming services. A sound recording can be aired on radio, embedded in multimedia products, streamed, or sold at a record store.

2. Unlike traditional services, the delivery of these products does not require direct contact between the supplier and the consumer.

3. The value of these products to the consumer lies in their informational, educational, cultural, or entertainment content, not in the format in which they are distributed. Most of these products are protected from unlawful reproduction by copyright laws.

4. The intangible property aspect of information and cultural products makes the processes involved in their production and distribution very different from goods and services. Only those possessing the rights to these works are authorized to reproduce, alter, improve, and distribute them. Acquiring and using these rights often involves significant costs. In addition, technology has revolutionized the distribution of these products. It is possible to distribute them in a physical form, via broadcast, or online.

5. Distributors of information and cultural products can easily add value to the products they distribute. For instance, broadcasters add advertising not contained in the original product. This capacity means that unlike traditional goods distributors, they derive revenue not from sale of the distributed product to the final consumer, but from those who pay for the privilege of adding information to the original product. Similarly, a directory and mailing list publisher can acquire the rights to thousands of previously published newspaper and periodical articles and add new value by providing search and software and organizing the information in a way that facilitates research and retrieval. These products often command a much higher price than the original information.

Excluded from this sector are establishments primarily engaged in custom design of software; mass reproducing software or other prerecorded audio and video material on magnetic or optical media; producing live artistic and cultural works or productions; and performing in or creating artistic and cultural works or productions as independent (i.e., freelance) individuals.

Source: US Census Bureau, NAICS 2022 Manual.