COVID-19 effect: 2020 estimates for M&E all askew; drop could be as high as 20-25%
The COVID-19 pandemic has thrown out of gear all 2020 predictions for various industry sectors. Last week, FICCI-EY launched its annual report for the M&E industry. Titled ‘The Era of Consumer A.R.T - Acquisition, Retention and Transaction’, the report reveals that the M&E industry grew by 9 per cent in 2019 to become a ₹1.82 trillion industry. The report also predicts that the M&E industry is expected to reach ₹2.42 trillion (US$34 billion) by 2022 at a CAGR of 10 per cent.
The COVID-19 crisis and the resultant lockdown across the country has started impacting the economy. The global economy is now entering recession, IMF chief Kristalina Georgieva declared last week. Ad spend projections are being revised globally, and India is no exception. The M&E industry, too, is facing challenging times.
In response to Adgully’s question, Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, admitted that there would significant revisions in the projections that were given for 2020. According to Pherwani, “If the lockdown continues for the whole of April, we might look at a flat year ahead. There is also a possibility of a 10-12% drop for the M&E industry if the lockdown continues beyond April, while if the current scenario continues for more than 3 months, then the drop for the M&E industry could go up to 20-25 per cent.”
At the same time, he cautioned that these are very rough estimates and added that the situation will become clearer in the coming weeks. However, if the crisis continues unabated, then these just might be the numbers that the industry could be staring at by the end of the year.
COVID-19 effect on Movies & Entertainment
With cinema halls shut down, the movie industry has also been hit. Though estimates aren’t available currently, but looking at the big-ticket releases that have missed their launch dates, including ‘Sooryavanshi’ and ‘83’, Bollywood’s loss will be significant. Regional film industry is also in for a period of loss.
Television and digital could be the next launch platform for fresh movie releases amid the COVID-19 crisis. As stated by Pherwani, “Especially the small budget movies might consider a release on TV or digital platforms. On the other hand, the bigger budget movies could afford to hold back their movies during this time.” There could be a disruption happening in the movie distribution space as well.
Also, along with movies, all production work for TV and OTT has come to a grinding halt. Thus, these mediums are looking at a situation where they will soon run out of fresh content. In such a situation, Pherwani said that innovation would be the name of the game.
GECs are gearing up with moves such as repurposing OTT content for TV, and are also banking on the nostalgia factor by airing popular old serials. Already, Doordarshan has started airing mythological behemoths of the 90s – ‘Ramayan’ and ‘Mahabharat’. It will also air Shahrukh Khan’s TV series ‘Circus’ and ‘Byomkesh Bakshi’.
More movie premieres are also expected on TV channels in the coming days. It is also possible that production houses might create content from home, like a YouTube producer, and broadcast it on TV.