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Entertainment industry to take $160B hit from coronavirus, analyst says

Entertainment industry to take $160B hit from coronavirus, analyst says

The global entertainment industry will take a $160 billion hit over the next five years as it slowly recovers from the coronavirus pandemic, according to a new report.

The outbreak has already whacked Hollywood studios,  which have been forced to delay the release of top grossing franchises and suspend productions of summer blockbusters under shelter-in-place orders, Ampere Analysis research director Guy Bisson said Thursday.

Universal Pictures pushed back the release of “Fast & Furious 9” — the latest installment of its car-chase franchise starring Vin Diesel — from next month to April 2021, as Marvel delayed the premiere of “Black Widow” from May 1 to Nov. 6. Meanwhile, production has been stopped for big flicks like “Mission: Impossible 7” by Paramount Pictures, “The Batman” by Warner Bros, and “Jurassic World 3” of Universal Pictures.

“Those decisions will contribute to the global entertainment sector losing $160 billion of growth” over the next five years, according to Bisson, who noted that the bulk of the losses will occur through 2021.

“Theatrical will be hardest hit, set to lose $24.4 billion over the next five years,” he said, citing the impact on the closure of cinemas and the “longer term effects” of movies vying for next year’s release window.

The competition could lead to a further “slowdown in film production that impacts content acquisition and distribution further down the line,” he said.

On the flip side, streaming “will be the big winner,” said Bisson’s report, which cited services like Netflix, Amazon Prime Video, NBC’s Peacock, Disney+ and HBO Max, which will launch on May 27.

His firm’s latest forecasts suggest streaming will gain 12 percent of additional growth in revenue over the five year period as global lockdowns have resulted in “a huge surge in streaming consumption and new subscriptions.”

Lockdowns around the world have led to “a huge surge in streaming consumption and new subscriptions, benefiting subscription video-on demand, broadcaster video on-demand and other catch-up services,” Bisson said.

Meanwhile, the analyst predicts a continued slowdown in the entertainment industry’s advertising revenues, which will hurt broadcast and cable television.

The firm estimated that the advertising market across TV and online will lose nearly $40 billion of revenue growth in 2020 and $43 billion in 2021. A recovery will begin in 2022, but come in below the firm’s previously forecast levels for the entire period.

“Advertising is hit hardest both near term and overall, but drilling down into entertainment sectors shows that areas like theatrical are hit proportionally harder,” Bisson offered. “The interconnected nature of the entertainment value chain means that will have a number of effects in other areas of the value chain…some of which will not be fully felt for several years to come.”

Pay TV, which was losing subscribers as customers opted to stream content before the pandemic amid an absence of live sports, will continue to “lose significant value,” he said.

About the author

James Thompson

James Thompson has worked in various news organizations and now aims to make Report Door one of the best and fastest growing news websites in the U.S. He contributes to the US and World sections.

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