Fun's Surprising Resilience
You would think that in an economic downturn, the first things people cut are the non-essentials. The holidays, the cinema trips, the concerts. But the data tells a rather different story. It turns out that while we might postpone buying a new car or a fancy watch, we cling to our small indulgences with surprising tenacity. Economists call it the “lipstick effect”, the idea that we’ll still buy small treats to cheer ourselves up. I call it common sense.
When times are tough, a couple of hours lost in a film or a video game isn’t a luxury, it’s a psychological necessity. This makes the entertainment sector what I’d call defensively attractive. Companies that provide these affordable escapes often see their demand hold up remarkably well. They are selling something far more valuable than a product, they are selling a break from reality, and that’s a service that is always in demand.