The subscription video-on-demand (SVOD) industry that was sailing in faster pace without much of the hurdle so far could be hitting an immovable object in the form of an Economic Downturn that Could Reshape Digital Media according to the report from MIDiA.
The report explore the potential impacts of an economic recession on the digital media landscape and looks at how consumers expect to change their media spending in a recession. In its first Recession Impact report, MIDiA Research explores how an economic slump could reshape the digital economy, following its prodigious growth in an era of easy access to capital and low interest rates.
The recession which MIDiAwargames could see Industry-wide unease likely to see global banks and other financial institutions start to de-risk their balance sheets in the face of an impending recession. This it said could result in less capital available to investors and lenders calling in debts.
The research found that millennials are poised to have their pockets hardest hit should the economy take a downturn, with the impact on their spending power directly upending loyalties to app subscriptions across entertainment. If realised, MIDiA believes that even Netflix and Spotify could be some of the first casualties of a recession, facing the double whammy of constricted disposable incomes and free high-quality alternatives.
The result said the analyst would be consumers migrating towards free platforms, with AVOD services like Viacom’s Pluto TV and Sony’s Crackle potential big video winners in video streaming. Digital advertising could also see an accelerated boom as advertisers seeking better ROI shift spend to digital channels.
However, MIDiA predicts that it would not be all bad news for subscriptions, however, and regards companies like Amazon, which has been providing its consumer base with a broad range of content and services that are free at point of access, as primed to come out largely unscathed. It predicts likewise for Apple, with its portfolio of subscriptions that can be combined into a single, free-at-point-of-access proposition bundled into its devices, should it opt to do so.
Other services at risk include additive sports-centric streaming services without premium domestic rights as, which are placing them at the forefront of potential subscription cancellation during a recession. Traditional pay-TV providers could see subscribers opting out of their expensive sports package, although early-termination fees would deter cancellations while growth-stage digital media companies could find themselves struggling to raise investment and forced to scale down, sell or go under.
The report is available to MIDiA at :
