Impact of COVID-19 on Global Entertainment Industry

Impact of COVID-19 on Global Entertainment Industry

OVERVIEW OF ENTERTAINMENT MARKET

The global entertainment industry includes online video streaming, film industry, live events & concerts, trade shows, and sports events. The global entertainment industry is driven by the growing digitalization and growing preference for online media platforms. In addition, inclination towards live events and increasing disposable income are some of the other factors that are contributing into the growth to the global entertainment industry. The increasing internet penetration in emerging economies is further fuelling the market growth across the globe. In 2021, as per International Telecommunication Union (ITU), the total number of internet users across the globe was nearly 4.1 billion, as compared to 3.9 billion in 2021. Video platforms such as Netflix, YouTube, Hulu, UltraFlix, and Amazon Prime Video are some major high-resolution video streaming platforms for TV and smartphone across the globe which is driving the industry growth.

The entertainment industry has some correlation with the travel industry as global events attracts audience from around the globe. Amusement parks, live events, and trade show majorly drive the global travel industry. According to the Theme Entertainment Association (TEA), the top 25 amusement parks of the world recorded around 233 million attendance in 2021. Among these, the US estimated over 100 million attendances in its 10 theme parks in Florida and California. In addition, the attendance at the top 20 North American Theme Parks grew by 4.0% overall in 2021, representing growth of 6.1 million visits. This was notably higher than the previous two years’ increases (2.3% in 2017 and 1.2% in 2021). Footfall raised over 6 million visits at North American Theme parks was led by the growth among top operators including Disney, Universal, and SeaWorld, with particularly good performance from Disney’s Animal Kingdom, SeaWorld Orlando, and SeaWorld San Diego, Disney’s Hollywood Studios, and Universal Studios in Florida. The Six Flags chain also showed growth for 2021, largely driven by the acquisition of five new parks bringing about 2 million in additional attendance.

IMPACT OF COVID-19 OUTBREAK

COVID-19 pandemic has spread in over 200 countries including the US and EU regions. The pandemic has disrupted the global economy and severely jolted both the developed and emerging economies. According to Worldometer, over 13 million COVID-19 positive cases and around 574,000 mortalities were registered till July 13, 2021. The COVID-19 pandemic forced recession in global economies, as most of the economies will post negative growth in 2021 and subsequent years.

The entertainment industry is one of the fastest-growing industries around the globe. However, the projections seem to get disturbed due to the COVID-19 pandemic. This is due to rapidly changing circumstances that have compelled the governments around the globe to impose a ban on all the activities that involve social gathering. The first step taken by the government of almost all the developed and emerging economies, which includes the US, China, India, UK, and Germany, was to shut down schools, theatres, live events, and amusement parks. Considering these steps, it can be analysed that the amusement parks, sports, theatres, and live events and trade shows will remain close even after the COVID-19 pandemic comes in control. Therefore, the entertainment industry is one of the major sectors that have been severely impacted by the outbreak of the COVID-19 pandemic. The pandemic has paused the global entertainment industry which has led to a huge loss. However, the COVID-19 pandemic forced people to stay at home that gave rise to the overall TV viewership and online streaming platforms compared with the historical times. This has positively impacted the online video streaming vertical in the entertainment industry, which, therefore, is projecting considerable growth due to the outbreak of the pandemic.

Analysis of the global entertainment industry includes the industry value estimated during the forecast period. The entertainment industry was held at $424.9 billion in 2021, which is estimated to reach nearly $745.9 billion in 2028 (post-COVID-19 scenario). The global entertainment industry will see a downfall of 38.3% in 2021 due to the COVID-19 pandemic. Pre-COIVD-19, the entertainment industry was estimated to reach $478.4 billion in 2021; however, the entertainment industry will stand at around $277.6 billion in 2021, post-COVID-19. The global entertainment industry will suffer a loss of $200.8 billion during the forecast period due to the outbreak of COVID-19 pandemic. The global entertainment industry was estimated to generate around $4.0 trillion of the market during 2021-2028. With the impact of COVID-19 pandemic the global entertainment industry is estimated to generate $3.6 trillion during 2021-2028.