Reports Critical Developments

The attention recession Post-peak behaviour

Report by Mark Mulligan
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20,000 foot view:  The global pandemic created a temporary boost to the attention economy, with all forms of entertainment benefiting. As life began to return to normal, this newfound time quickly started to erode, causing growing pains for many entertainment companies. The timing could not have been worse, with 2022 also seeing the emergence of a cost-of-living crisis and wider economic slowdown. The combined effect of these factors is the attention recession

Key insights 

  • The attention economy follows five key phases: growth, peak, lockdown boom, post-lockdown dip, new peak
  • Attention time rose by        during the lockdown era, but it is contracting as pre-pandemic behaviours return, creating an attention recession
  • Combined with economic headwinds (rising inflation and interest rates) and the geo-political situation (the Russo-Ukrainian war), this is creating unprecedented volatility 
  • Average video weekly active user (WAU) penetration dropped from        in        2021 to        in        2022, reflecting people returning to activities that video cannot fit (e.g., working, walking, driving, cycling)
  • By contrast, music is a natural fit for the exact places that video is not: average WAUs went from        to        from        2021 to        2022
  • Games app usage was boosted by the rise of subscriptions, which are well suited for the attention recession. The share of WAUs who are also daily active users (DAUs) rose by       
  • Faced with a cost-of-living crisis, consumers are more likely to cut down on leisure than digital entertainment.         consumers would go out less, while around a fifth of subscribers would cancel their subscriptions
  • Music subscriptions may be well placed because a) value for money (pricing has not kept pace with inflation), and b) cancelling means losing all paid benefits, not just a slice of choice
  • Video, however, will have to learn to embrace dynamic retention , with savvy switchers jumping between services more frequently. Video services will need to think about subscriber months per year more than monthly retention

Companies and brands mentioned in this report: Alphabet, Amazon Prime, Apple One, Facebook, GTA, Meta, Netflix, Snap, Spotify, PlayStation Now, TikTok, Xbox Games Pass, YouTube

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