Recession Impact How an Economic Downturn Could Reshape Digital Media
The 20,000 Foot View: Ten years on from the credit crunch, the global economy could be poised to enter another economic recession. Many of the underlying causes of the credit crunch remain in place, due to governments lacking the appetite for the structural reform required to right the faults in the global financial system that catalysed the slowdown. Many of those adverse factors remain unchecked, and with growing volatility in geopolitics a perfect storm could be brewing. A succession of potential unintended consequences could reshape a digital economy that has grown in an era of abundance and easy access to capital. This report does not tackle the underlying causes of a potential recession – we will leave that to the economists. Instead we explore how digital media can be impacted, how it can weather the coming storm and how it should prepare for a post-recession economy.
- Millennials have the fuel for the digital engine, but these young professionals be the ones who have job insecurity in a downturn
- The combined of lower spending power and ticket prices could hit live hard
- Streaming video music subscriptions will be vulnerable they are contract-free and the alternatives are so good; news will be similarly impacted
- Ad-supported video demand (AVOD) services like Viacom’s TV and Sony’s Crackle could big
- streaming video
- Games console cycles could be hit, building case for rental models
- De-risking of balance sheets could result in slowdown in both early and stage investment into media and
- Investors may more direct roles in portfolio to protect their investments
- Multi-format subscriptions bundles will be well placed thrive in recessionary environments, with set to be a big
- The combination bundle economics and early cancellation could see traditional pay-TV companies some market share from streaming
- Advertisers seeking ROI may trigger an accelerated to digital advertising
Companies and brands mentioned in this report: Amazon, Amazon Prime, Apple, Arcade, Crackle, DAZN, Disney, Disney+, the Economist, ESPN, ESPN+, the Financial Times, FloSports, Fortnite, Google, Hulu, Microsoft, Microsoft All Access, Netflix, the New York Times, Playstation, PlayStation Plus, Pluto, Softbank, Spotify, Stadia, the Telegraph, Uber Eats, Viacom, Xbox, Xbox Live, Yo, YouTube
Recession impact research: This report is the first of a long-term series of research reports from MIDiA that will explore the potential impacts of an economic recession on the digital media landscape. Additionally, MIDiA reports will also now feature Recession Impact sections at the end of standard reports. The next report in this series will present new data on how consumers expect to change their media spending in a recession.