Impact of COVID-19 On Indian Media and Entertainment Industry While box offices and event management companies take a huge blow, OTT services are more in vogue than ever before
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The Indian media and entertainment industry, worth INR 1.82 trillion in 2019 (according to FICCI), is now staring at INR 25,000 crore loss (CRISIL). The lockdown has had varied effects on the multiple sectors in the media and entertainment industry. While box offices and event management companies take a huge blow, OTT services are more in vogue than ever before.
This pandemic has revealed the brutal socio-economic divides that exist within one nation. As with other industries, migrant workers and daily wagers have been the worst affected. Since Bollywood movies stopped shooting mid-March, there have been numerous stories of daily wage earners who have nothing but their savings to turn to. Organizations such as CINTAA, TWICE, and the Production Guild of India, actors and other production houses have stepped up their efforts to support these workers. There can be no denying the fact, however, that even when work comes, the maintenance of safety norms will remain in question.
Impact on Box Office
With theatre releases postponed, shooting on hold, and cinema halls closed, absolutely nothing is certain. Even when theatres open, social distancing norms and weakened livelihoods are likely to prevent people from thronging to watch movies. With large-budgeted films competing for release dates, smaller productions may lose out. Production houses, keen on anticipated revenues, will have to put future projects on hold. A KPMG report points out that in order to stay afloat and avoid cash crunches, investments in large projects will most probably be avoided. In other words, the effect of the lockdown and virus are likely to carry on till FY21.
During the lockdown, TV consumption has actually increased, with so many people being homebound. Viewers regularly watch news to stay up-to-date with the latest developments in the mid of the crisis. They also enjoy previously existing content. Doordarshan airing Mahabharat and Ramayan comes to mind. For two weeks, the channel became the most viewed in the world. The trouble of course is that advertising has shot down, as companies providing channels revenue are facing trouble themselves. The KPMG study predicts a 4-12 delay post "normalcy' for monetization to be renewed. There is also danger that post lockdown, it could face increased competition from digital platforms.
If the movie industry has it bad, then imagine an industry that is completely based on gatherings. Events include award shows, meetings, conferences, exhibitions, competitions, music festivals, etc. With huge events such as IPL suspended or canceled, the event management sector is looking at huge losses (INR 3,000 crore, at least as of the end of March). A survey conducted by the Events and Entertainment Management Association (EEMA) with 170 companies, found that more than 50 per cent of organizations had 90 per cent of their business canceled between March and July. More than 100 companies, of those surveyed, had faced a revenue reduction of INR 1 crore. The event industry provides livelihoods to 10 million people directly, and 50 million by way of allied sectors. The KPMG report sees business-to-business events picking up before business-to-consumer ones, expecting a 12-16 week delay post "normalcy' for content supply and consumption of events to be renewed.
Impact OTT Platforms
In what are clearly dark times for M&E, OTT media services appear to be a glimmer of hope. There has been increased usage of these platforms over the last few months. Multiple platforms are providing subscription-free usage of their services to induce habit formation (KPMG), in the hope that this will lead to greater subscribers as we return to normalcy. Many users, who may have never experienced OTT services before, are opening themselves up and exploring them. They are also getting used to, and fond of, the "pause and play' options that are not available on dish television operators. Of course, as with television, platforms must make do with the content they already have. However, among other things, this trend has emphasized the permanence of digitization. Going forward, it is likely that advertisers turn their focus even more to the Internet. The Bollywood movie, Angrezi Medium, which could not have a box office release was released on Disney+ Hotstar. This is not a viable option for all movies, however, considering that they may not reach the right audiences, or platforms may not be able to support big-budgeted films.
During this lockdown, the industry has gone through a harrowing experience. Respite, if any, was found online. Recovery will be slow, but those in the industry should not be discouraged. After all, it was often art and media that provided relief and support to the entire world.