“The entertainment industry had a very positive 2022 and a welcome recovery is definitely underway, but we’re not over the hill yet,” said Michael Furtschegger, Global Head of Entertainment at AGCS. “In the three years since the coronavirus first hit the headlines, the world has changed. The sector needs to evolve in step with new technologies, proliferating platforms and seismic shifts in consumption patterns and shifts in public sentiment, particularly among younger generations.”
Despite the challenges the industry is facing, consumers are returning to their favorite entertainment venues or platforms, AGCS said. According to Gower Street Analytics, global box office receipts hit $25.9 billion last year, up 27% from 2021. But that number is still 35% below the average for the three years before the pandemic.
Next year, live music revenues are expected to surpass pre-pandemic levels, with digital music streaming subscriptions driving growth in recorded music, where revenues are expected to reach $45.6 billion in 2026 will be reached, up from $36.1 billion in 2021.
Live theater is also making a comeback, with rising revenues and attendances. The global sports industry is also proving resilient, helped by media rights, sponsorship deals and a calendar of international events and tournaments, AGCS said.
challenges remain
However, the entertainment industry is not immune to economic trends such as staff shortages and rising costs, AGCS said.
“Our entertainment customers are feeling the effects of inflation with increased production and live event costs,” Furtschegger said. “Personnel costs have risen following the skills shortages that have emerged in the wake of the pandemic as many have left the industry. Venues are tighter than before with many shows still having to be postponed due to the pandemic and to be held in addition to new events and festivals. Larger events may be successful, but smaller events are more challenged by factors such as venue, transportation and energy costs. We expect further consolidation in the industry, with smaller, struggling production companies and venues being bought out by larger operators.”
quality not quantity
Technology has lowered the entry barriers for content creators as almost anyone can upload content to TikTok or YouTube. Meanwhile, the big studios and tech companies are launching their own platforms. The amount of content being distributed now makes quality a key differentiator in a crowded marketplace, AGCS said.
“We’re seeing a move towards quality in film production, but it doesn’t come cheap,” said Wanda Phillips, head of North American entertainment insurance at AGCS. “Companies need to know that they have sufficient insurance cover for demanding productions. Where the costs go up, so does the exposure, because with each day of shooting the costs go up, which could be reflected in an eventual insurance claim.
sustainability concerns
Environmental, social and governance issues are having a growing impact on the entertainment sector, AGCS said.
Green dresses will be seen on the red carpet at this year’s Oscars as the Academy promotes a more sustainable approach to awards fashion. At live events, British band Coldplay have pledged to halve the carbon emissions associated with their current world tour compared to 2016-2017 and have made a number of sustainable commitments, including paying a surcharge on aviation fuel and sourcing ethical and sustainable ones Goods , and plant a tree for every ticket sold.
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“Sustainability is a concern of younger generations in particular, and festival organizers are reacting to this,” says Furtschegger. “More and more entertainment organizations are committing to sustainability goals to reduce emissions associated with live touring.”
virtual future
With streaming now a fundamental part of the entertainment and media sectors, virtual conferencing is a particular area of growth, AGCS said. The global virtual events market was valued at more than US$114 billion in 2021 and is expected to grow at a CAGR of 21.4% between 2022 and 2030.
Even without a live audience, virtual events still face risks, including transmission failures due to weather or natural disasters, fire affecting the broadcast unit, or network issues affecting the broadcast infrastructure. Rented equipment and studio space may also be at risk of property damage and accidents.
Virtual reality is the fastest growing entertainment and media segment, with global growth expected to take the segment to $7.6 billion between 2021 and 2026. It is predicted that gaming will account for 85% of total VR revenue by 2026.
“As the worlds of gaming, music and entertainment continue to converge, gaming platforms like Fortnite and Roblox are increasingly serving as entertainment and social hubs as gaming content migrates to social media and streaming platforms,” Furtschegger said.
Emerging Risks
Health and safety protocols, increasing weather hazards and crowd safety are some of the top risk concerns the entertainment sector should monitor, AGCS said.
“The COVID crisis and the recent tragic film set shooting incident have demonstrated the need for the industry to remain vigilant regarding health and safety protocols,” Furtschegger said.
Climate change is another cause for concern.
“We’re seeing more unusual weather-related events — for example, severe storms and flooding in Europe and bushfires in California,” Furtschegger said. “These inevitably create havoc at live events, both in terms of downtime risks and damage and safety of people.”
“There has always been risk in crowds,” said Kurt Miner, managing director of entertainment at Allianz Risk Consulting, North America. “Event organizers are now better able to monitor large groups of people and protect them and performers through the use of real-time video surveillance. Security professionals can remotely monitor two or three events, each of which can take place over 15 hectares or more, and identify risk concerns such as blocked exits or damaged barriers. They can also monitor social media to discourage gate rushing and stampede by sending a security contingent to the location before the situation spirals out of control.”
Slips and falls are the leading cause of claims under live event policies, so organizers should ensure medical staff and transportation to local medical facilities are on site, AGCS said.
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2023-03-10 07:10:00
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