Pandemic’s hit on entertainment could be $160B over five years
A new report released overnight, from research firm Ampere Analysis, estimates that COVID-19’s impact will last for five years and rob the sector of US$160 billion worth of growth.
“There are two ways to look at the loss of value: gross revenue and relative change,” points out the company’s research director, Guy Bisson.
“Advertising is hit hardest both near term and overall, but drilling down into entertainment sectors shows that areas like theatrical are hit proportionally harder.
“The interconnected nature of the entertainment value chain 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.”
Streaming will be the clear winner, with a 12% additional growth over the five year period, while the shift toward on-demand viewing already underway.
For instance, last February, the Australian Communications and Media Authority reported 71% of Australians with a TV set in the home used at least one paid video streaming service in 2019.
One in 10 also had four or more subscription services in the home, and 83% of Australian internet users viewed paid or unpaid video content online in the past six months.
Ampere says the use of subscription video-on-demand and, broadcaster video-on-demand shot up during the lockdown, with more Australians working from home.
“There will likely be a temporary post-lockdown backlash. But key to the longer-term prospects is the acceleration of consumer behavioural change which will benefit streamers,” said Bisson.
Theatrical will be a major loser, of up to $24.4 billion over the five year period as Ampere downsized its forecast for the five year period by 11%.
The closure of cinemas has had an immediate impact on theatrical revenue, but the longer-term effects mean a glut of movies vying for release next year could ultimately lead to a slowdown.
The turbulent pay-TV sector is expected to lose 4% of its previously forecast value.
The advertising market across online and TV will be in the dumps too, losing nearly $40 billion of growth in 2021 and $43 billion the year after and before truly recovery begins.