As Swedish media is mainly financed by advertising and consumer payments, the local advertising market is largely affected in an economic downturn. However, Mediavision latest report shows that households' interest in paying for media, for example through subscriptions, continues to increase despite the economic decline. For many media companies, consumer revenues will increase in importance if Sweden enters a recession.
Swedish household media spend has gradually increased, and despite economic concerns, 2022 was no exception. Average media spend increased 8% compared to 2021, and now amounts to SEK 685 per month. Looking across the three main categories – text, audio and video –, audio services increased the most, with a whopping 12%. At the same time, text grew by 5% and video by 9% compared to 2021. For the advertising market, development was significantly weaker and, according to IRM, a decrease of just over 2% was noted in the last quarter of the year, compared to the same period in 2021.
For advertising revenue in 2023, IRM expects a continued decline of 0.7%. For consumer payments, Mediavision currently sees no signs of a similar decline. On the contrary, preliminary data for the first months of the year shows continued growth. Bottom line, according to Mediavision, is that consumer payments are stable or increasing, despite economic instability. When consumers are asked about their plans in financially tougher times, other expenses than media are opted out first.
“We recognize this pattern from previous economic downturns. Household spend on media is more stable than advertising revenue. Therefore, it is particularly important in these times to closely monitor, for example, customer satisfaction and price sensitivity. Bundling different types of media services can also be a way to strengthen the relationship with consumers,” commented Marie Nilsson, CEO at Mediavision.
Related News
