Analysts Offer Gloomy Forecasts For Media Companies

Wall Street analysts have expressed a pessimistic outlook for the first quarter of 2025 for U.S. media companies, citing economic uncertainty driven by President Donald Trump’s unpredictable tariff policies. These policies have eroded consumer confidence and amplified recession fears, posing significant challenges for an industry reliant on discretionary spending. 

Key impacts include:

Advertising Revenue Decline: A potential recession could lead to a $45 billion loss in advertising spending in 2025, according to MoffettNathanson analysts. Traditional TV advertising is particularly vulnerable, with budgets likely shifting to streaming services or digital platforms. Brand advertising platforms are expected to be hit harder than direct response platforms, as noted by John Belton, portfolio manager at Gabelli Funds, which holds shares in companies like Paramount Global, Warner Bros Discovery, Fox, and Comcast’s NBCUniversal.

Theme Park Revenue Risks: Disney’s Experiences unit, encompassing theme parks, cruise ships, and consumer products, accounted for over 60% of its operating income in the latest quarter. A recession could reduce domestic and international theme park revenue by $3 billion in 2025, per MoffettNathanson. However, Comcast’s NBCUniversal may see some resilience due to the opening of its $7 billion Epic Universe expansion at Universal Orlando Resort on May 22, 2025, which could attract visitors despite economic headwinds, according to Bank of America.

Movie Ticket Sales Drop: North American movie ticket sales have already declined nearly 12% year-over-year, as reported by Comscore. Michael O’Leary, president and CEO of Cinema United, emphasized that the industry depends on discretionary income, which is curtailed during economic uncertainty.

Streaming Service Challenges: An economic slowdown may prompt subscribers to downgrade to cheaper plans or cancel subscriptions. Netflix, with over 300 million global subscribers, is expected to report an 8% increase in profit per share and 12% revenue growth to $10.5 billion for Q1 2025, per LSEG estimates. Analysts like Bank of America’s Jessica Reif Ehrlich suggest Netflix’s strong market position and content library will likely prevent significant subscriber churn, though some may opt for its ad-supported tier, which has gained traction since its 2022 launch.

Social Media Advertising Impact: Escalating tariffs on Chinese imports could affect platforms like TikTok and Facebook, which rely on ad revenue from Chinese e-commerce firms such as Temu and Shein. Sensor Tower data indicates Temu’s daily ad spending across major U.S. social media platforms dropped 31% in the two weeks prior to April 16, 2025, compared to the previous 30 days, while Shein’s spending fell 19%.

Reuters reports the broader economic context fueling these concerns includes Trump’s tariff announcements, such as a 10% baseline tariff on all U.S. imports and higher levies on specific countries, which have triggered market volatility. The S&P 500 and Nasdaq have seen significant declines, with the S&P 500 down 4.6% for the year and the Nasdaq down 10.4%, marking their worst starts since 2022 and 2020, respectively. JPMorgan has raised its recession probability to 60%, while Goldman Sachs estimates a 45% chance, citing tariffs as a drag on growth and a driver of inflation. Consumer confidence has plummeted to its lowest level in over four years, further threatening media companies dependent on consumer spending.