Like most other industries, the media and entertainment business is likely to be hit hard by the disruption caused by the lockdown which is a necessary tool to ensure that we stop the spread of the COVID-19 or Coronavirus. Cinemas across the country are closed, film and television production has stopped and large scale events and live entertainment have been forced to either cancel or postpone. This is likely to result in crores of lost earnings and potentially the closing of lots of small businesses that will be unable to recover. Add to that the real problem of non-contract workers, who need these free-lanced assignments to make their monthly income, now being out of work with no sense of when they will be able to pick up again. Even after the 21-day lockdown period (plus the 14 extra work from home days in some states), there is little doubt that we will feel the impact of this pandemic for a while to come.
There is the argument that some forms of media - particularly digital media like OTT and social media - are thriving given the fact that millions remain at home, but that is only one side of the story. These OTT businesses also have crores of rupees locked up in productions that now will be on hold, causing if nothing else, mounting interest costs and delays. The news media continues to be allowed to work through this, though in a stripped-down form and they are likely to get a lot of eyeballs in these times but given the situation, are they poised to take any financial advantage? It seems a little distasteful to talk about that right now.
So when things return to some form of normalcy, what will be the impact on the industry? Well, there will be huge losses to start off with. These will have to be dealt with. The hope is that the government will introduce some kind of economic relief package which would help certainly smaller businesses defer their monthly payments like EMI's, interest, etc to private as well as governmental organisations. The Finance Minister has announced some measures regarding GST and how it can be deferred to June but the reality is that this would just be the beginning of some kind of aid package which businesses would need to help them get back on their feet. The smaller companies in the M&E industry would certainly benefit.
Then there is the issue of the delays in production. With dates and timelines going haywire, there will be a need for an adjustment so that talent can fulfill pending commitments without impinging too much on dates already given to newer projects. This is likely to take time to sort out in full and it will mean that some projects do not take off on time to accommodate those which are already stuck. This is a shifting of cost escalation which will eventually work itself out, but in the short-term, there will be some to endure.
Then at the theatres, dates will need to be looked at. There could be a bunching of releases in the near term. This would mean films that were due to release during the lockdown, would want to release ASAP but some producers who already have those dates blocked would want to ensure they don't suffer financially. This could lead to many more releases per week and that is not good for films. There would also be a period of trying to entice people back into these exhibition theatres and there would be no guarantee of good occupancy as soon as the lockdown is lifted. Films, therefore, could delay even further. Hopefully, once the all-clear is given, people will flock back to the theatres but the longer this goes on, the dependency on OTT streaming will increase and the cinemas will need to work harder to pull back their audiences.
Outdoor events and live entertainment would be in a similar boat as theatres. Sponsorship and ticket sales for these events would only pick up once there is a belief that there is no lingering threat and there would be a solid turn out for advertisers to capture eyeballs. This could take weeks more after the lockdown is lifted. Already live event venue space in cities like Mumbai is at a premium, this could mean higher rentals and many unprofitable shows.
There are plenty of other worries and unfortunately, there is not a lot that we can do about them. When such a shock to the economic system takes place, it does take time for that system to reset. This will take time as well. People will need to feel confident and happy about stepping out and spending their money (which depending on what the government does, may need to be prioritised elsewhere). M&E though has always been seen as a rather recession-proof industry and this would probably mean that should there be a recession post the pandemic, M&E would be worse hit but it for sure will not be immune or insulated.
MD, Mukta Arts Ltd