Entertainment Industry Mirrors COVID Economy
The COVID-19 pandemic rocked the US and global economy in a couple of days. Take a health emergency and nationwide shutdowns and everything comes to a grinding halt. The impacts and responses that are being seen at the national level are mirrored in many industries at an individual level. This includes the live entertainment industry. What are some of these impacts and responses and how are they manifesting themselves in this industry? Let’s take a quick review:
With state-wide shutdowns, quarantines, and social distancing, both supply and demand are down. Companies cannot operate and produce, and consumers cannot go out and consume. Workers are earning and spending less or not at all. Everyone has one ultimate goal above all others right now: conserve cash. At a national level, this impact can be seen in the unprecedented level of stimulus being injected into the economy.
For the entertainment industry, this impact is obvious. Events, concerts, and games are being postponed or cancelled. Revenue is not coming in, and in many cases refunds are going out (albeit slowly). At a personal level, ticket buyers are searching for refunds to get ever precious cash back that may have dried up elsewhere in their lives.
As companies search for ways to ensure survival for the next 12-18 months, a strategy being used unfortunately by many is layoffs. The venture capital industry and their funded startups are taking the drastic measure when needed for the company. Restaurants that cannot open have been left with no choice.
One response many industries and companies are taking is diversification of revenue streams or all out business pivots. Restaurants are relying more on delivery or allowing it for the first time. Startups that see their business model disappearing in a post-COVID world are scrambling back to the drawing board. Manufacturing companies are shifting production lines to produce medical equipment. Individuals are looking for multiple sources of income and side hustles.
Entertainment venues, promoters, and artists are making business changes as well. Shows are being livestreamed virtually or recorded. Drive-in concerts have become a thing. Ticket brokers are pivoting to other businesses such as sneaker reselling.
The COVID-19 impact and responses are pretty consistent across a diverse set of industries marking the stark danger to the overall economy. Hopefully the resolution is equally as consistent although likely not as rapid.