The entertainment industry has been impacted immensely by Covid-19 with the advertising and theatrical sectors hit the hardest.
The global entertainment industry 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 last Thursday.
The pandemic will hit 2020 and 2021 the hardest. This will be followed by a reduction in growth for each year in the five-year forecast. The firm stated,”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.”
Adding to their analysis is the financial loss the advertising industry will face. Advertising for TV and Online alone will lose $40 billion in revenue growth in 2020 and $43 billion in 2021.
“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 of 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. “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.
Streaming is the “Big Winner”
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. The key to the longer-term prospects is the acceleration of consumer behavioral change, which will benefit streamers.”
Ampere concluded that streaming will be the “big winner.” It’s forecasted that streaming will gain an additional 12 percent of revenue growth 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. In contrary, streaming for music was seen dropping during the pandemic back March.