Disruptors to define entertainment business in post-COVID world: Study
The impact of COVID-19 has been unprecedented in the media and entertainment industry, as in every other sector, with many services offered by this industry having sharply diminished or halted. Every aspect of the industry has been affected in some way.
A new report by Tech Mahindra on the ‘Impact of COVID-19 on Media and Entertainment Industry suggests change in the way the world of media and entertainment will conduct business is set to happen faster than you can imagine, in the post-pandemic world. The study also says those who manage to adapt to disruptor models in technology and business will survive and thrive.
The impact of COVID-19 has been unprecedented in the media and entertainment industry, as in every other sector, with many services offered by this industry having sharply diminished or halted. Every aspect of the industry has been affected in some way.
Broadly, the impact has been felt across six areas. Theatres are closed, production has come to a halt, advertising has been disrupted, e-commerce is on the rise, finance and accounting operations have been affected and, finally, what has been the most pertinent change, consumption of entertainment at home is on the rise.
Of these, the fate of theatres closing and film production coming to a halt, and the resultant rise in home entertainment, would be of interest to movie buffs.
The premise of the report is that Digital Transformation, often considered to be secondary strategic business goal, has suddenly become relevant, and it is obvious that in the post COVID-19 scenario, companies that take advantage of emerging of already-built digital capabilities, will be in the position to emerge as leaders.
The report finds that in the field of media and entertainment industry, consumer demands and market conditions will lead to unexpected innovation. Disruptors will define the new business models, including emerging technologies such as AR/VR, advanced home entertainment technologies, new modes of instream and interactive advertising. New content creators and management platforms will be critical enablers for this wave of innovation.
The report suggests the media and entertainment industry must immediately plan strategic changes for longterm business survival. Cloud Migration, Process Automation, and Data Management Consolidation will be the new buzzwords, while cost-effective and capable workforce partners will be a necessity.
Importantly, strategic plans that might previously have been expected to run over 12 to 18 months will now have to be fulfilled within one or two quarters.
MOVIE THEATRES CLOSING
According to the report, data from the United States' National Association of Theatre Owners (NATO) shows that theatrical business made $15 billion annually and could now go down to nothing. Closures have drastically impacted financial health of the box-office and government aid will decide survival of theatres after COVID-19.
Willingness of the audience to return to the theatres is unknown as of now, and while studios openings of major films, NATO is asking filmmakers to delay film launches till the theatres open.
Most importantly, release that are now being pushed will create a bottleneck and oversupply at the yearend, followed by a period of low supply in 2021/2022, due to lack of current production activity.
In the post COVID-19 scenario, with digital platforms increasingly being favoured for film releases, the report suggests theatres that adopt new technologies such as AR/VR-enabled ‘experience zones' could be at an advantage.
Even when theatres reopen, the recurring question will be: Will streaming films the same day as they release in theatres be the new normal? To stand out, theatres will need to cater a positively different experience that streaming cannot.
PRODUCTIONS SHUTTING DOWN
Thousands of daily earners have no income as of now in the film industry, with film, television and OTT production having halted.
Not only will theatres suffer owing to the production slump, even film festivals will run short of content, even if they wish to go online.
While in India, it has been individual stars and celebrities who have pitched in to help the industry's jobless, in Hollywood -- thanks to it studio culture, there has been organised, corporate help coming in for the needy.
AT&T's Warner Media CEO John Stankey committed to more than $100million to fund production crews. Sony announced a $100 million for affected musicians and music industry professionals. Netflix created $100million relief fund to help members of the creative community, particularly those laid off.
An overlook by the report suggests that advances in post-production technology has already been disrupting the traditionally human-centric business process of production. New capabilities will be adapted more aggressively. The COVID-19 pandemic will accelerate use of technology in production and post-production processes in filmmaking.
HOME ENTERTAINMENT ON THE RISE
Not surprisingly, the report finds that home viewing of entertainment programme is on the rise across multiple devices and distribution outlets.
The report quotes Nielsen data to show TV viewership is at an all-time high, with news viewing leading the way.
While fiction TV will benefit in the current scenario, until they start running reruns too often.
An important observation here is the fact that increase in home entertainment consumption via streaming will spike Internet data consumption, and Internet speeds could take a hit.
Not surprisingly, Cellular Operators Association of India (COAI) are asking Hotstar, Netflix, Amazon etc to stream content in standard definition.
In the new order of things, streaming wars will be a way of life. Home entertainment and news consumption will continue to soar. The report states CNN viewership is up by 167 per cent since March 9. Such statistics will increasingly become common.
Being nimble and responsive to the demands of the times is paramount, the report suggests. For example, Netflix lets you download titles to watch offline. This is an innovative way to ease network bandwidth issues.
Another way out is to be selective with launching films on OTT.
The new norm as far as home entertainment consumption goes is that network providers will sooner or later find a way to supply increased bandwidth to the consumers. Networks and consumers who are equipped for 5G technology will naturally benefit the most.