Reports Media & Marketing

Recession Impact How an Economic Downturn Could Reshape Digital Media

Report by Alistair Taylor, Amanda Stears, Karol Severin, Keith Jopling, Mark Mulligan, Tim Mulligan and Zach Fuller
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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.

Key Insights

  • 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.

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