Recession Impact Cocooning Will Protect Entertainment Spend
The 20,000 Foot View: Even before the global coronavirus outbreak, faltering confidence in the global economy suggested that a recession may be looming. With stock markets trending down following the upswing in coronavirus cases, the chances of a global recession are rising. Entertainment normally suffers in a recession, but MIDiA’s latest recession impact consumer data indicates that leisure spend may bear the brunt of any downturn in discretionary spend.
- Eating out less and going out less are by far the most widely-cited ways in which consumers would reduce spend of consumers would eat out less and would go out less, while of regular gig goers would go to fewer concerts
- Should coronavirus trigger a recession, safety concerns would likely increase the skew towards cutting leisure spend rather than entertainment spend of consumers would downgrade from a music subscription to free, while the same share would cancel one or more video subscriptions
- The prevalence of multiple video subscriptions of video subscribers have more than one video subscription) means the overall subscriber base would reduce less than music
- Apple and Amazon will be well placed to gain subscriber market share in a recession due to their bundling advantage
Companies and brands mentioned in this report: Amazon, Amazon Prime Music, Apple, Apple Music, Apple TV+, Netflix, Spotify
This is the second report in MIDiA’s Recession Impact research series.