How tariffs and stock markets will affect Hollywood

From YouTube and Netflix to Disney and Warner Bros. Discovery, all entertainment companies are involved in the advertising business. And in the midst of a recession, advertising budgets are one of the first to be cut. As Hollywood Reporter Previously, the timing of the disruption did not get worse for business as networks and streamers are set to start paying advances with advertisers in the coming weeks.

While all consumer packaging commodity companies and retailers are directly affected by tariffs and may reassess their spending, tech companies will be challenged with their own imports (such as Apple products) and e-commerce play (such as Power Amazon and Meta, among others). The travel sector could also be affected.

The advertising market is painful due to the incredible uncertainty.

Certainly the streaming business is severely hampered by the slow advertising. However, businesses can also benefit from recession conditions. In a world where spending is ramped up, streaming services like Netflix and Disney+ can create attractive value, offering endless entertainment at reasonable set prices. In other words, streaming subscriptions could potentially benefit from this environment. This is just like in the early days of the Covid pandemic (though not everyone is stuck inside the house).

However, there are related risks. Streaming services are easy to sign up, but they are easy to cancel. And in a world where customer churn is already high, the recession can recharge, making it difficult to maintain subscribers who can go for a month when seeking fresh fares.

Despite the pessimistic advertising outlook, the free streaming option could thrive as more people flock to value, and perhaps stick to it. Of course, YouTube will be a clear beneficiary, but Fox’s Tubi, Paramount’s Pltune and other high-speed channels could also see audience conflicts.

If entertainment companies tighten their belts, programming budgets could drop. And as all companies invest more in live sports, these cuts are offered at the expense of entertainment programming.

why? The cost of live sports is largely fixed.

For example, NBC will have to pay the NBA about $2.45 billion a year for gaming rights for the next 11 years, and spend hundreds of millions of dollars a year producing games and shoulder studio programming. There is no room for that budget to drop significantly.

Looking at all the sports rights deals that the large television networks and streamers are committed to, there is the ability to shift budgets to the entertainment side of the portfolio between the NBA and the NFL and everything in between. As streamers and networks focus on safer bets, expect fewer scripting projects and rely on unscripted shows to narrow down more programming from the bucket of the same budget.

The post-pandemic landscape has brought about a tide of demand for live events and excitement for experiences. Concerts (see Taylor Swift), sporting events, theme parks (hello, Disney) and other experiential businesses are booming, bringing record revenue to businesses like Live Nation and causing an influx of investments in the space.

It goes without saying that in the midst of a recession, expensive concert tickets and holidays are one of the first things households have been cut out of their budgets. Premium tickets for events are always available, but with market changes, the irrational price of regular tickets will be unbearable. Similarly, expensive theme park trips to Disney World and Universal Studios are tempered as they provide infiltration and offerings.

And, as Disney CEO Bob Iger pointed out on April 3rd at the ABC News Editorial Meeting, Disney is calling for steel and other raw materials to build a new fleet of cruise ships, not to mention the world of new theme parks and attractions.

In Hollywood, there is very little money that is easier to make than a good licensing agreement. Studios, networks and streaming services retain valuable IPs, and many consumer product manufacturers want to leverage their IPs to sell more products. Toys, Makeup, Games, Clothing: Travel to Walmart or go to Target and count the number of popular franchises and products with character similarities.

For entertainment companies, it is the light business of assets and investments. Yes, you need to make sure your product is present in the brand and meets quality standards, but you don’t manufacture any risks (brand risk is a different story, but look at last year evil The doll’s big failure). However, when we see Mattel’s shares rise above 14% and Hasbro up 11%, we see that there is a problem.

Toys, games, clothing and other products are either more expensive, or breaking margins or their combinations. License transactions could be reduced, and product manufacturers will focus on core lines and reduce sales to reduce the easy cash for IP owners.

Look at Disney, where licenses make up about 5% of the company’s revenue, but 13% of operating profit reflects a rich margin.

Already many theatre executives have turned to 2026 as a year to turn the film business around, but the recession certainly doesn’t help bring something clear to the moment. In fact, the past suggests that the recession may not be as devastating to theatres as it may not be devastating to theatres.

The 2008 conflict saw box office revenue fall by just 0.3%, but increased by 10% in 2009 (a very slight decline in 2010 and 2011). The 2000 DOT COM crash had no identifiable impact on box office revenue. In the late 1980s, the Black Monday Crash rarely stopped box office growth. When people are regaining concerts and flashy holidays, is a cheaper alternative to film travel?

Meanwhile, for the past few years, theater owners have leaned towards premium formats like IMAX and 4DX, charging to launch premium prices. Everyone from studio executives to theater owners, knows that the theatre experience needs to be better than what consumers can get at home, but these new products have made travelling to films a lot more expensive.

Don’t be surprised if more discount tickets become more common, perhaps even on premium screens. It is unclear whether it will help or hurt the box office revenue.

Most entertainment businesses are not built on physical products, but they have connected works. After all, TV still costs money. And newer ones tend to be enforced by large drivers of Wifi-enabled and new streaming users.

Streaming sticks and boxes from Roku, Apple, Amazon and Google were able to see prices rise, considering that ads fell, and at the same time those devices are basically sold at cost, hoping to make up for it later.

Additionally, video games and video game consoles are already premium products, only more expensive in the world of tariffs. Already, Nintendo has delayed pre-orders for the Switch 2 console, citing “the potential impact of tariffs and the evolving market situation.”

Many Wall Street executives spit on M&A prospects under the new administration. But not only is antitrust enforcement still active, but the decline in stock markets has led to trading ice.

StubHub has paused its IPO amid the turmoil in the market but is willing to repeat it once things stabilize. IPOs aren’t the only ones that will shut down because there is so much uncertainty in the sales business and overall price.

Data from the Boston Consulting Group show that M&A activities slow in amidst the economy as assessments and foundations become more difficult to quantify and predict. The CEO and the board will be reluctant to sell at a deflated price (except of the company’s economic emergency, of course). Does David Zaslav want to cut down the contract for Warner Bros.’s discovery, which lost 30% of its value last month, given that everything could be turned over on a whim if tariffs were removed?

Even Tiktok has become more difficult to sell, and Trump is now trying to force trades using tariffs as leverage points against China. Understanding new value, new profit margins and new business models become more difficult, resulting in less trading.