Reports Critical Developments

Entertainment and the recession How it will be impacted and how it should respond

Report by Mark Mulligan
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20,000 foot view:  The world is facing a period of change and disruption that is unprecedented in modern times. With so many interconnected dynamics across consumer spending, economic cycles, the climate, and even geo-politics, consumer behaviours and spending will undoubtedly be impacted. This means that entertainment companies will be impacted also. But entertainment has the opportunity to play a unique role in these troubled times. It will require innovation and strategic agility, but done right, it could even see some forms of entertainment being – whisper it quietly – recession proof.

Key insights 

  • The ad market is slowing: leading digital-ad company revenue grew by        between        2020 and        2022, but it was down sharply in        2022 and only up by        quarter-on-quarter (QoQ) in        2022
  • Major music groups and leading digital service providers (DSPs) saw music streaming revenue follow a broadly similar decline in growth between        2021 and        2022, with        2022 growth less than a third of the        2021 rate
  • Video subscription growth is also slowing, with Netflix’s year-on-year (YoY) quarterly subscription video on demand (SVOD) revenue growth going from        in        2021 to        in        2022, while Disney’s SVOD growth went from        to       
  • The entertainment landscape will be reshaped by multiple factors, including attention inflation, the splintering of culture, scenes and identity, lean through, the creator economy, post-peak growth, and rediscovery
  • MIDiA’s C.R.E.A.T.E. entertainment manifesto presents a framework forinnovation and growth in the coming new era for digital entertainment

Companies and brands mentioned in this report: Alphabet, Amazon, Disney, Meta, NetEase Cloud Music, Netflix, Snap, Sony Music Group, Spotify, Tencent Music Entertainment, Twitter, Universal Music Group, Warner Music Group

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