COVID-19 has negatively affected the world's economic growth. The spread of the pandemic worldwide has caused markets to tumble as countries take emergency actions to respond to it. Many companies have sought accounting for financial advisory company. Lockdowns around the globe and various control measures have forced the closure of many businesses across all industries. This has contributed to massive unemployment.
Consequently, consumers' spending appears to fall. Some of the most affected sectors include the sports, media, and entertainment industries. For instance, according to Forbes, it can take four years to recover the 22 million jobs lost during the COVID-19 pandemic. The following are the effects of coronavirus on the entertainment industry.
Major Shortfall in Income from Events
Due to the Corona Virus, many events have been canceled or postponed. This has led to the loss of revenue for the organizers and media companies that broadcast the events. Cable television partially depends on advertising; hence any decline in income will impact its profitability. The pandemic has also heavily affected professional sports. In the United States, the pandemic caused the suspension of the National Hockey League and National Basketball Association seasons. The pandemic also affected Major League Soccer, Major League Baseball, and the Professional Golfers' Tour cancellation.
In Europe, several football matches continue to take place without fans as leagues start to act. Additionally, the Tokyo Olympics and Paralympics, which were expected to be aired and shown to millions worldwide, were also canceled. These types of events cannot be easily replaced in broadcasting programs. However, though some changes may or have occurred, cancellation and postponement of these events will disrupt and affect the broadcasting schedules, sponsorship, advertising arrangements, and promotional events.
Lower Spending Outside the Home
It is expected that restrictions on large gatherings and movements will continue to be imposed for some time as long as the pandemic is not contained. This causes lower spending on advertisements and media strategies targeted to clients outside their homes. Several countries continue to impose limits on social gatherings of large crowds. Due to this, entertainment hubs such as theatres and restaurants, and bars continue to record low attendance numbers.
Some countries have previously or are still imposing closure of theatres, cinemas, and restaurants. There have also been restrictions imposed on the number of people required at specific areas to ensure that a safe distance of at least one meter apart is achieved. The pandemic outbreak could cause billions of dollars in losses for the global film sector. Various movie makers have also had to postpone the release of their movies. Additionally, low entertainment spending outside may negatively affect multiple brands trying to reach their customers through out-of-home media such as billboards and radio.
Increased Online Media Consumption
As more individuals remain at home due to quarantine and self-isolation measures, this could increase online media consumption. Due to these measures, entertainment channels like video gaming and on-demand are on the rise. For instance, after China imposed restrictions, there was a massive increase in weekly downloads of apps compared to previous normal times. The same was experienced in weekly downloads of games on Apple devices. TV viewership also significantly increased. The search for coronavirus information also increased news consumption. However, the impact could be a double-edged sword for some news companies. On one hand, subscription to online media could benefit if the companies convince viewers to pay for coverage access. However, advertising-funded publishers may face new challenges.
Brands usually use keywords in online advertising, and to prevent some associations, they typically exclude negative words. The emergence of the pandemic made the word "coronavirus" one of the most used words on publisher's blocklists, meaning socially relevant and on-demand reporting didn't generate as high revenues as expected.
Decrease in Advertising Spending
Some brands also decided to reduce their advertising budget since reductions in sales and supply chain issues affected their production. For instance, manufacturing-related goods and consumer-packed goods firms decreased their adverts' budgets due to inventory issues caused by the constraints in their supply chains.
The COVID-19 pandemic also caused a reduction in consumer spending on non-essential products. This was due to massive job losses and reduction of salaries as many companies closed down. Some companies even stopped advertising completely. However, some companies are adopting new sales platforms such as online channels to account for their shortfalls. Such strategies include hiring online and social media influencers to market their products online.
The coronavirus pandemic has negatively affected the economic, political, and social lives of people globally. Many people have lost their jobs as several industries continue to struggle financially as some face closure risks.