The media and entertainment sector has felt a big pinch post the closure
The outbreak of Covid-19 has hit the media and entertainment industry hard. Cinema theatres have been shut, film releases have been postponed, both internationally and within India, and events such as the International Indian Film Awards, India Fashion Week and Trevor Noah’s stand-up comedy tour Loud and Clear stand cancelled for now.
The fate of the marquee sporting event of the year — Indian Premier League — hangs in the balance, too. In addition to this, the shooting of ad films and movies has been halted to contain the spread of the virus in India.
According to Ashish Pherwani, media and entertainment leader, EY India, the social distancing measures put in place to restrict the outbreak of Covid-19 “could adversely impact the media and entertainment sector for the next two to three months, beginning March”.
The events and activations industry in India is expected to cross the Rs 10,000 crore mark by 2020-21, as per an EY-EEMA (Event and Entertainment Management Association) report. Brands rely heavily on sponsorship tie-ups with events and outdoor activations to create awareness about products among consumers. However, given the strict advisory against large gatherings, and the shutting down of schools and colleges, spends on publicity and promotions on outdoor events are set to decline sharply over the next few months.
“We have already noticed a drop in footfall in malls. Many of the events that we had planned for our clients have had to be cancelled,” says Roshan Abbas, MD and founder, Geometry Encompass. He adds that many of the events that have been shelved for the time being, may eventually be cancelled resulting in loss of business. “Due to paucity of equipment, space and other logistical factors, we will not be able to cram activations and events scheduled for these three months into the second half of the year,” Abbas notes.
He estimates that the prevailing situation has already set the events industry back by nearly Rs 500 crore.
Pherwani adds that the ad spends across media — including transit media in airports, metro stations, railway stations and outdoor advertising — are slated to dip with people reducing travel and staying indoors.
The IPL, which attracts a significant chunk of advertising spends annually, may be cancelled altogether or at best played in empty stadiums. While advertiser money is already locked in, there may be no money coming from ticket sales and on-ground sponsorships. “There is just one silver lining: IPL might become a digitally watched series as opposed to a physically and digitally watched one,” says Harish Bijoor, founder, Harish Bijoor Consults.
The release of Sooryavanshi starring Akshay Kumar, and the Bond movie No Time To Die have been postponed. International releases such as Mulan and The New Mutants from the house of Disney, too, will be rescheduled.
Mohan Umrotkar, CEO, Carnival Cinemas, says that the current quarter is completely washed out. With the industry already losing four weekends of business in 2020, Umrotkar says the annual impact on the box office collection could be 12-13%.
With film shoots also restricted, movie releases slated for later this year may also have to be delayed, industry watchers speculate.
Movies that were already running in theatres when the government ordered a shut down, will need to look for other avenues to reclaim viewership. As people take to the practice of social distancing, analysts expect a spike in the consumption of television and digital video content. “We may see the early release of some direct-to-digital movies, too,” notes Pherwani. For instance, Disney has already advanced the digital release of Frozen 2 on its streaming platform.