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Covid-19 pandemic to deal a big blow to the media and entertainment industry in fiscal 2021
- Ad spends to be hit significantly as corporates focus on controlling costs
Media & entertainment revenue to decline ~16% on-year, but impact will vary across sub-segments
- Digital segment will remain the strongest, albeit growing at a slower pace than last year
- Impact on TV and print will be cushioned by subscription revenue
- Recovery of outdoor media –cinema, events, and sports –will be slower because of social distancing norms
Empirical data suggests a possible sharper recovery in ad growth by fiscal 2022, as consumption revives
Credit impact: Accruals to be affected, but strong balance sheets a differentiator
- TV broadcasting and distribution – low impact
- Print – Large companies resilient because of strong balance sheets; mid-and small ones to be closely monitored
- Radio – Ad revenue will be severely affected, but ratings are supported by strong liquidity and overall group support
- OOH – Those housed under large media groups remain cushioned, mid- and small companies could see some impact
- Multiplexes –Severe impact; the segment needs to be watched closely for liquidity issues
Pace of recovery and consumer behaviour changes leading to shift in industry dynamics need to be monitored