It’s not a blip

When a change occurs, it is often necessary to look back years, even decades, later to appreciate how significant that change was. Other times, it happens so fast that it can be difficult to appreciate its magnitude as people become desensitized to the perpetual torrent of bad news. It is in this latter situation that we now find ourselves. What appears to be a succession of independent events (war, political crisis, climate change, inflation, etc.) are actually all indicators of a larger, connected wave of change that will reshape the world. And not just for a few months, but for a generation, maybe more. It’s tempting to think that the entertainment and consumer technology industries are, at the very least, isolated. But they are not.

Let’s first look at all the major components of change and disruption:

Normally we might face any one of these challenges, but now we face them all with a cumulative and interconnected effect. The result will most likely not just be a year-long jolt, but rather what will be a realignment of the global economy, regardless of the dramatic changes in the global geopolitical situation with Ukraine and Taiwan.

It is difficult for any of us to properly grasp how all of these changes will reshape the world, as the combination of factors is unprecedented in modern times (particularly due to climate change), which means no one alive never experienced this before, and so all of our benchmarks have limited use.

Even if the entertainment economy is of little importance compared to most of these factors, it will nevertheless be shaped by them, with the recession of attention adding extra spice. Subscriber declines and downturns will likely have a short-term impact, but longer-term changes will be more significant. This could manifest in a myriad of different ways, such as the rise of bundles (e.g. Apple One, Amazon Prime, Google One and Play Pass); the growth of the creator economy; and the long-term increase in funded advertising and integrating ads into subscriptions, such as Netflix and Disney+.

Could consumers turn more to entertainment as times get tough? Sure. Could they start to engage more in digital entertainment because they can’t afford to go out as much anymore? Yes. But regardless of the direction(s) of the entertainment market, two things are clear: 1) change is coming, 2) the most successful companies will be those that are ready to embrace and lead change. , two things are clear: 1) change is coming, 2) the most successful companies will be those that are ready to embrace and lead change.

As the traditional Chinese curse says “may you live in interesting times”.

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