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