NOTE: The following is an excerpt of “Entertainment in a Bear Market,” a Variety Intelligence Platform special report being released Aug. 1 that examines how the media business is being impacted by the economic downturn.While the jury may still be out on if or when a recession hits in the U.S., some consumers are already pulling back on how much they spend on entertainment, according to a new survey.
With inflation at more than four-decade highs, 38% of respondents said they have begun making changes to spending on activities, such as attending concerts or going to the movies. Recreation and entertainment tied for second with travel among the spending categories that consumers projected they’d cut back on in the event of a recession, behind only eating out at restaurants.
The exclusive survey was conducted among 2,200 U.S. adults between July 6-7 by decision intelligence company Morning Consult in partnership with Variety Intelligence Platform (VIP+). The survey was conducted to gauge shifts in consumer sentiment regarding entertainment spending amid a worsening economic environment.
In previous periods of recession in U.S. history, entertainment has held up relatively well compared to other industries as a low-cost option for disposable income. But each recession brings its own set of challenges as Hollywood hopes for the best for products that have already been tested in the pandemic era, including many streaming services that are only a few years old.
Inflation has also triggered decreased spending on entertainment subscriptions such as video services like Netflix and Hulu and music subscriptions like Spotify and Apple Music. The survey found that 26% of adults say they have already made changes to their monthly entertainment subscriptions as a result of rising inflation.
In addition, 29% of respondents who say they are concerned about an upcoming recession have adjusted their spending on entertainment subscriptions, compared to just 11% of adults who are not concerned about a recession.
Just over half of respondents said they would continue to pay for audio and video streaming subscriptions even if companies raise prices, but 39% would consider canceling.
Of those that said they were cutting back, the younger generations were more likely to reduce spending, with 36% of Gen Zers and 35% of Millennials saying that they’ve made changes recently. Meanwhile, 29% of Gen Xers and 16% of Baby Boomers said they did. Similarly to entertainment activity spending, Gen Zers and Millennials were more likely to cut back on subscriptions.
“The fact that Gen Z adults and Millennials are more likely than their older counterparts to m …