The Entertainment Industry Post Corona Pandemic
The entertainment industry is long considered one of those industries that is recession-proof. Even when there is an economic downturn, the common thought is that people still need to be entertained and be happy so films and TV will always be part of the spending patterns. Now, of course, this hasn't always been proven true but in the light of the impending downturn due to the COVID-19 outbreak, how will the M&E industry be affected and how will it manage to recover from what some people are saying could be the biggest economic depression of a lifetime?
Well like many outdoor industries, the production sector of the media and entertainment business (film, TV, OTT, Live Entertainment, etc) has been ground to a complete standstill in the wake of the government announced lockdown. The only shoots that are happening are vlogs for social media and some short films that are being made for YouTube and Facebook from the confines of someone's house. Other than that, the lights and cameras are in the warehouses and there is certainly no action at all. This is not the only part of the business badly affected, the exhibition business, cinema halls, theatres, live events, exhibitions, concerts, etc, have also all had to be closed down or canceled as their very nature is that they bring scores of people together. Under the current circumstances, such activity is dangerous, so since, about a month, all big events and all movie halls and theatres are shut down to huge losses for the businesses that operate them.
There are some shoots of hope though in all of this. Given the quarantine, stay at home entertainment like Television and OTT streaming have seen huge boosts in their viewing. TV viewing is up as much as 15-20 per cent in some areas
The Covid-19 Impact
The likely effect of all this is to be large losses in the short and near term. The lack of production activity means delays. In the content business, delays mean cost as interest and time is a huge factor. It also means that when cinema halls do open, there could be a bunching of films trying to release as soon as possible to return their delayed investment, leading many falling by the wayside. The effect on exhibition could be much worse. The business by default has large fixed overheads that would need to be handled in a period of no income. When these businesses are allowed to reopen, there would be a period of lack of consumer confidence as people still will remain worried about the effects of the virus and bunching together in large numbers. This would further mean low occupancy and perhaps mean the big-budget films that can attract audiences would stay away until they are sure the audience is happy and satisfied to return. This is likely to take some time.
There are some shoots of hope though in all of this. Given the quarantine, stay at home entertainment like Television and OTT streaming have seen huge boosts in their viewing. TV viewing is up as much as 15-20 per cent in some areas and many OTT's have seen their viewership numbers boost as well as active paid subscriptions. With being indoors the new normal for most of us, many have taken to watching whatever they can on TV or on a mobile device. Add to this the gains to social media viewing as well as platforms like Facebook and YouTube and the digital business has certainly benefited greatly from what is a terrible situation. The key question is likely to be, in a post COVID world, whether these gains can be kept or not? I would suggest that Television may see its viewership decline again to pre-COVID figures, but perhaps some viewership habits would have been altered. Digital and OTT though could see this period as a bit of a watershed as I think people will hold on to these platforms and keep them as part of their consumption even after lockdown is over.
So how Will the Business Get Out Of This?
Could this be the curtain call? Well, I don't think there will be any such thing. But there is a period of prolonged difficulty ahead for the industry as people return to their normal lives and those livelihoods are affected by the outcome of this pandemic. However, winning back consumer confidence is at the heart of any recovery and this will need to be done by understanding the consumers' mindsets and acting accordingly. It might mean that cinema halls may have to sell staggered seating tickets whereby one seat is left unsold to ensure social distancing. They may also have to lower prices, offer deals, and other schemes to attract people back. It goes without saying that they would need to ensure a sanitized environment and put in things like temperature checks and other transparent methods of showing that they are taking the norms seriously. This is something all live entertainment venues would need to do as well. The production sector will take time as well to recover as if the outlet (the cinemas) are still recovering, then releases could be on hold. Communication and careful planning to ensure that films are properly released to give them the best chance of success would then be key. A mix of releases would also help to attract different audiences to theatres and help fight the stigma on all levels.
Time they say heals all and in the case of media and entertainment, it could certainly be the case. The industry will return to its full glory, in a slightly modified way and after some careful thought and planning, keeping the consumer right at the heart of those decisions.