Sun. Sep 27th, 2020

Global Entertainment Industry Faces $160B Coronavirus Hit

The global entertainment sector is set to “lose $160 billion of growth” as a result of the novel coronavirus pandemic over the next five years, research firm Ampere Analysis estimated in a report on Thursday.

“While the biggest impact will be felt in 2020 and throughout 2021, growth will be reduced each year for the duration of the five-year forecast period,” the firm said. “While gross loss (the total amount of lost growth in dollar terms) will be greatest for the advertising sector, it’s also important to look at the relative impact pegged to the size of the sector. On that basis, theatrical will be hardest hit, set to lose $24.4 billion over the next five years, with its revenue growth down more than 11 percent over Ampere’s previous forecasts.”

Meanwhile, streaming will be emerge victorious.  Ampere concluded. Its latest forecasts suggest streaming will gain 12 percent of additional growth in revenue terms over the five-year period. Lockdowns around the world have led to “a huge surge in streaming consumption and new subscriptions, benefiting subscription video-on-demand, broadcaster video-on-demand and other catch-up services,” the firm said.

It estimated that the advertising market, across TV and online, will lose nearly $40 billion of revenue growth in 2021 and $43 billion in 2021. A recovery will begin in 2022, but come in below the firm’s previously forecast levels for the entire period.

“Advertising is hit hardest both near-term and overall, but drilling down into entertainment sectors shows that areas like theatrical are hit proportionally harder,” explained Guy Bisson, research director as Ampere Analysis. “The interconnected nature of the entertainment value chain means that will have a number of effects in other areas of the value chain … some of which will not be fully felt for several years to come.”

For example, shuttered cinemas mean an immediate impact on theatrical revenue, but “the longer-term effects mean a glut of movies vying for release windows next year could ultimately lead to a slowdown in film production that impacts content acquisition and distribution further down the line,” Ampere highlighted.

Meanwhile, streaming services are “likely to come out on top here as viewers are leaning on streaming content providers heavily, just as a slew of new platforms enter the market,” Bisson argued. “Yes, there will likely be a temporary post-lockdown backlash. But key to the longer-term prospects is the acceleration of consumer behavioral change, which will benefit streamers.”

Pay TV, which has suffered from the loss of live sports due to the pandemic, will “lose significant value in what was already a challenging market structurally, representing around 4 percent of its previously 

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Written By: Tommy Lightfoot Garrett

Photographs are Courtesy: AP  

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