What Are the Losses Incurred by the Entertainment Industry in Canada?

by Alex H. CCO

The show must go on. But will it? Due to the coronavirus pandemic, more and more companies around the world face problems. Retail businesses shut down, lay off staff, halt services, and suffer from decreasing revenue. The situation is especially detrimental for restaurants, beauty salons, theaters, cinemas, and other players of the entertainment industry. Even online companies that have at least one site are forced to stop their expansion.

The global crisis is emerging right now, and it will not pass Canada by. Local businesses have already laid off thousands of workers, boosting employment insurance claims drastically. Land-based entertainment venues like Casino Niagara or Fallsview Resort are closed to the public and there are no signs that this will change any time soon. Online teams like Nostalgia Casino in Canada are at the better end as they remain demanded. However, can they be sure about surviving the pandemic’s peak? Overall, North American entertainment is in deep waters. Let’s figure out what’s happening today.

Overview of the Entertainment in Canada

Back in 2018, PwC Canada published its Entertainment & Media Outlook 2019-2023. In this study, the agency predicted sustainable growth, a further rise of web-based services, and an increase in data consumption. Particularly, experts predicted that the entire Canadian entertainment industry revenue will grow at 3.7% CAGR to reach $58 billion by 2023. Data consumption was projected to reach 77 exabytes (77,000,000 terabytes).

Precisely, PwC analyzed trends in nine core sectors of entertainment in Canada:

Cinema was predicted to grow at 0.5% CAGR to $852 million. Canada was successfully attracting foreign movie producers, including top players from Hollywood. As well, Netflix was interested in making their series in Canada.
Data consumption. As we’ve mentioned, this sector was predicted to increase to 77 exabytes. Canada has over 26 million mobile web users, 100%+ digital penetration rate, and significant consumption of video content.
eSports. This industry is one of the best performers as it had to experience 14.5% CAGR. Particularly, media rights revenue was estimated to increase at 23.9% CAGR! It would come from streaming platforms, chat services, and users who play regularly.
Internet access. The government is still planning to release 5G this year. However, innovations and developments will be introduced slower, both in the sector of mobile Internet and fixed services.
Internet advertising. While experts forecasted that the global web advertising would be less effective, they said that mobile ads might bring up to $3.6 billion by 2023. The dominance of Google remains unchallenged (is it even possible to shake it?).
Music. Being a highly profitable industry, music was projected to grow from $639 million to $934 million. This sector intersects with eSports and cinema brands that invest in music content development.
OTT video. You may know it as over-the-top Internet video distribution. This market had to keep Canada in the fourth place worldwide. PwC analysts forecasted its growth to $2.7 billion by 2023. Netflix is a major player here.
Traditional TV. Among all traditional television-related areas, only IPTV was predicted to grow while all other sectors faced a gradual decline. It’s evident because the Canadian traditional TV market is extremely mature.
Video games. Together with eSports, video gaming and online gambling offers had to become more and more popular. From online casinos to famous mobile apps to free multiplayer AAA titles, software development was also set to flourish.

The picture was pretty positive. Nearly all industries were expected to flourish, and customers would get the best service thanks to market competition. You’d think, what could go wrong? Everything.

Current Challenges for Canadian Businesses

Thousands of people get infected every day. COVID-19 has already reached 1 million confirmed cases with almost 50,000 deaths. After the initial outbreak in China, the novel coronavirus is raging in the USA (200,000 infected) and Europe (nearly 500,000 infected in total).

The pandemic has already disrupted many industry sectors such as international travel and hospitality. Airlines estimate that they will lose $250 billion in revenue in 2020. What’s now? Are PwC’s forecasts irrelevant today? Put simply, yes. We’re living in a totally new world now, with new challenges but also with new opportunities.

General Crisis

COVID-19 is a typical black swan. According to the theory’s author, Nassim Taleb, a black swan is an unpredictable disruptive event with mainly negative outcomes. Other examples of black swans include, for instance, 9/11 and the Fukushima nuclear disaster. While such events do a lot of harm, businesses with good risk management can benefit from them.

Right now, Canada faces the first consequences of the pandemic. Companies fire workers, force them to go on vacation, shorten workweeks. Some firms continue paying while others reduce salaries. Here are a few numbers related to layoffs on March 16-20:

● Air Canada – 5,100, some flights halted;

● Cirque du Soleil – 4,679, all shows stopped;

● Fiat Chrysler – 8,900, production paused;

● Irving Shipbuilding – 1,373, operations suspended.

Hotels expect from 200,000 to 250,000 jobs to be lost, retailers send their employees home, even software companies fire workers due to the decrease in customer attention.

In the middle of March, Canada already faced 500,000 employment insurance applications in a single week. In percentage terms, it’s more than the impact of the Great Depression. To be precise, this time the job loss figure was 2.6% for just one week while the highest number of the 1930s’ crisis was 2.5% for one month!

Entertainment Industry and Its Potential Collapse

Apart from Cirque du Soleil in Montreal, there are hundreds of big and small entertainment businesses that are in danger today. Live cinemas and theaters, film studios, and other land-based venues suffer the most. Brick-and-mortar casinos also have to shut down, either halting their services or migrating online.

The most prominent changes in the Canadian entertainment industry are as follows:

● Amazon Original paused all series temporarily;

● Apple TV+ and Disney+ stopped live-action filmmaking;

● Hollywood closed all filming locations in the country;

● Local production studios stopped working, and sacked employees;

● Netflix announced a halt in all film/TV production processes for two weeks;

● Warner Bros. canceled around 70 series under development or that were ready to start.

In total, 30,000 jobs were closed in the major filmmaking center of Canada – Toronto. 20,000 workers were affected because of operation halts and shutdowns in Vancouver, where 48 out of 51 production companies stopped working. And it seems that the worst is yet to come because the pandemic hasn’t yet reached its peak in North America.

This time, nearly each entertainment company or commission works on combating COVID-19 effects. They establish task forces to define the potential impact and the needed countermeasures. Businesses seek governmental help so authorities also create special groups that will define the scope and direction of support needed.

A Word About Online Casino Offers

A regular casino provides various casino games for new players and seasoned veterans: progressive jackpot titles, table games, baccarat, roulette, video slots, craps, video poker, scratch cards, blackjack, free spins, customer support, etc. Any casino also provides casino bonuses: bonus money, a first deposit bonus, welcome bonus packages, match bonus promotions, and so on.

Why are we listing these? Just to prove that a regular Canadian online casino is likely to survive and even increase revenue. The thing is almost every new player now has only one way out – go to the website with game download options. The operators just need to make sure that a visitor has contributed the minimum deposit in cash, and he/she will immediately get access to all the games available on the platform, each casino bonus, and a special offer. VIP reviews show that high rollers are lucky to receive even more exciting game options.

Web gambling is full of fun, it’s a relatively safe, top-quality, well-established, and licensed activity. But its best feature is that it exists online. Besides, it’s legal. The Kahnawake Gambling Commission oversees fair gaming, safety, security, and wagering in its jurisdiction.

Possible Outcomes

Nevertheless, local and global communities do their best to prevent further spread of the virus. Countries announce lockdowns, stop available operations, and offer medical research grants. In Canada, the federal government has a plan to invest $30 million in COVID-19 awareness advertising. These funds should come to local Canadian TV groups, newspapers, and online resources that require bailout the most.

Private charity programs should also support the entertainment industry. For instance, Netflix donated $1 million to the Actors Fund of Canada located in Toronto. The streaming service also delivered another bonus of $500,000 to the Foundation des Artistes in Quebec. Donations can’t help all workers who need money. They act as emergency support for fired or demoted employees in film, music, theatre, and dance sectors.

To sum up, please, remember to practice social distancing and self-isolation, follow the governmental and medical recommendations. The world has survived through disastrous events more than once or twice. It will overcome this pandemic, too. Watch the news and stay healthy.