From natural disasters such as hurricanes, earthquakes, storms as well as economic crises are all long-tail events that have a big tendency of accelerating underlying trends, unravel businesses, business practices and models and exacerbate balance of power – all of which are critical in sustaining a strong economy.
However, the effect of Covid-19 on entertainment and media sectors seems that it’ll be consistent throughout history. Take note too that the longer the outbreak is not contained, the more serious the impact it can create.
Before Covid Kicks In
As you stumble on this hjemmeside, you will discover the unraveling truth that’s happening in the movie industry and performance arts, long before coronavirus hits.
In 2019 last year, there were 3.5 percent down in movie theater compared to the 3.7 from the earlier year and a record high of 5.2 in the year 2002. Despite the fact that the consumption levels last year were more than a ticket below the average from 1960s to 2000s, it was no aberration.
For over 2 decades, the per capita admissions declined for around 1.6 percent a year. This was despite of the industry’s efforts in continuously improving the movie-going experience like reserved seating, VIP seating, larger seats and so forth. Aside from that, there’s no sign that this trend is going to slow down.
Poor Exhibitor Fundamentals
Even though there’s ongoing and significant consolidation, major exhibitors showed distress and decline for quite some time. Since 2015 for instance, revenue of AMC has jumped from 3 billion to 5.5 billion dollars while income dropped from 100 to 150 million dollars with a close call of 500 million dollars loss in 2017. Aside from that, total liabilities spiked from 3.6 billion dollars to 13 billion dollars in big part because of investments made to improve movie-going experience.
Basically, it is quite difficult to survive in an industry where the consumers are buying less every year and to which the key suppliers are becoming stronger than ever. 20 years ago, movie distributors would take an average of 55 percent of the movie ticket while the theater keeps 45 percent. Today, Disney has control of over 65 percent or even higher for top title films; mind you they had 8 out of 10 biggest movie hits in 2019.