Tariffs, recession fears cast pall over US media earnings

Dawn Chmielewski and Harshita Mary Varghese

Wed, Apr 16, 2025, 3:04 AM 4 min read

By Dawn Chmielewski and Harshita Mary Varghese

Los Angeles (Reuters) - Wall Street analysts offered a gloomy presumption of the archetypal 4th for overmuch of Hollywood, informing that economical uncertainty caused by President Donald Trump's erratic tariff plans has undermined user assurance and heightened fears of a recession.

The menace of an economical downturn would instrumentality a toll connected an manufacture babelike connected discretionary spending, squeezing TV advertizing income and taxable parkland attendance, and spurring streaming work cancellations.

MoffettNathanson analysts estimation a recession could effect successful $45 cardinal successful mislaid advertizing spending this year, and hazard advertizing budgets permanently shifting distant from accepted tv to alternatives similar streaming services oregon integer platforms.

“If we spell done an economical downturn, the advertizing concern volition beryllium tough. More specifically, marque advertizing platforms are apt to beryllium deed harder than nonstop effect platforms,” said John Belton, portfolio manager astatine Gabelli Funds, which owns shares successful Paramount Global, Warner Bros Discovery, Fox and NBCUniversal genitor institution Comcast. Gabelli Funds besides owns shares successful Netflix, which is expected to study first-quarter results connected Thursday, kicking disconnected the net play for media firms.

Netflix, which dominates the streaming video marketplace with a planetary subscriber basal of much than 300 million, is expected to study that nett per stock jumped much than 8% from a twelvemonth ago, according to LSEG estimates. Revenue apt accrued by much than 12% to $10.5 billion, reflecting maturation crossed each regions.

An economical slowdown whitethorn punctual streaming subscribers to downgrade to much affordable plans, oregon cancel their subscriptions altogether. But Netflix is improbable to spot "a question of churn" fixed its beardown marketplace presumption and fashionable content, wrote Bank of America media expert Jessica Reif Ehrlich, though immoderate cost-conscious subscribers whitethorn commercialized down to a cheaper terms tier. Consumers person flocked to Netflix's ad-supported tier since its motorboat successful precocious 2022.

Other streaming services, similar Apple TV+ oregon NBC's Peacock, whitethorn not beryllium arsenic lucky.

A downturn could punctual marketers to chopped spending connected tv advertising, successful anticipation of reduced demand, taking a toll connected media companies including Warner Bros Discovery, which derived much than a 5th of its gross from advertizing successful 2024.

Advertising besides represents a important information of gross for Facebook genitor Meta, Snap and Google genitor Alphabet.

Some companies are apt to fare amended than others successful a downturn. Search advertizing tends to bash good during periods of uncertainty, said eMarketer expert Ross Benes, due to the fact that it captures consumers who are successful the marketplace to marque a purchase.