S&P Global – Media Entertainment Credit Outlook, 2024

The S&P Global report on the Media Entertainment Credit Outlook for 2024 highlights several key trends and risks in the industry. The report states that the recent settlement of the writers and actors strikes has allowed the industry to reevaluate content spending. While streamers have lifted profitability, there is a drop in demand for content creators. The report also notes that secular pressures, rather than macroeconomic cyclical trends, are driving soft advertising spending on legacy media, particularly linear TV. The report predicts that consumer balance sheets may weaken in 2024, leading to a potential decrease in consumer spending on discretionary media. Additionally, the growth of streaming subscribers may suffer. However, the report does anticipate improving trends in advertising in the second half of the year, particularly due to increased U.S. political advertising. One of the key risks identified in the report is the accelerating secular trends in the media ecosystem, such as the decline of linear TV and continued soft advertising. These trends could negatively impact media companies' credit metrics. Another risk highlighted is the profitability of streaming companies, as some may become profitable in 2024, potentially leaving those with weaker streaming prospects at a disadvantage. The report also mentions the potential impact of macroeconomic weakness or geopolitical shocks on consumer discretionary spending, although this is not included in the report's base case scenario. Overall, the report indicates a challenging outlook for the media entertainment industry in 2024, with various factors contributing to potential credit risks for companies in the sector.