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Analysts estimate that the global entertainment industry will lose $160 billion in growth over the next five years as a result of the impact caused by the COVID-19 pandemic.
According to a report issued Thursday by the research firm Ampere Analysis, 2020 and 2021 will be the hardest hit years for the entertainment industry, but it notes people should expect more long-term impacts over the next five years as things slowly start to reopen and production on film and TV finds a new way to move forward under social distancing guidelines.
The report explains, as many expected, that the theatrical sector will take the biggest hit.
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A research firm reported that the film and TV industry may not recover from the coronavirus pandemic for five years. (AP Photo/Matt York)
"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," the report reads (via The Hollywood Reporter). "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."
One reason for the long-term impact has to do with the supply chain of movies. As the virus has forced countless productions to close up shop and hit the pause button on whatever was being made, the immediate impact on the theater industry is obvious. However, Ampere anticipates that, once productions begin again, the market will become oversaturated with new movies playing catch-up and vying for a release window, which could ultimately lead to a slow down in production that impacts content acquisition and distribution further down the road.
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Meanwhile, both pay TV and advertising are expected to be the next hardest hit by the coronavirus shutdown. The firm estimates a more than $83 billion of revenue growth from TV and online advertising will be lost between now and 2022 for advertisers. In addition, pay TV is taking a hit thanks to the lack of live sports content. The report estimates that sector will "lose significant value in what was already a challenging market structurally, representing around 4 percent of its previously forecast value."
'Trolls World Tour' was a financial success after its straight-to-streaming release. (DreamWorks Animation via AP)
However, one area that seems to be thriving under the pandemic is streaming. Ampere’s latest forecast suggests that streaming will actually gain 12 percent of revenue growth over the same five-year period, as TV shows continue to roll out on various streaming platforms while movies begin to shift from theatrical releases to at-home releases. The concept was proven already with the straight-to-streaming release of "Trolls World Tour."
Guy Bisson, research director at Ampere Analysis, explained that streaming is "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."
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He added: "Yes, there will likely be a temporary post-lockdown backlash. But key to the longer-term prospects is the acceleration of consumer behavioral change, which will benefit streamers."
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