When public gatherings were banned, the lights went dark on the entertainment and culture industry. Many companies suddenly found themselves facing serious financial troubles and an uncertain future.
Like many economic sectors in Quebec, the entertainment and culture industry has had to reinvent itself in recent months and find creative ways to reopen. Even though the industry has always had to contend with changing conditions, this is the first time it has had to close its doors on a global scale.
And yet, demand for content has increased. People locked down at home have taken their social activities online. Television viewership and online gaming consumption has spiked. The crisis has highlighted the importance of culture in social wellbeing and that’s why it needs to play a major role in the economic recovery.
Cinemas, theatres, museums, festivals, and television and movie producers—none of these businesses are able to operate as usual due to physical distancing directives. That’s why so many are relying heavily on assistance programs.
Nearly $500 million has been granted to support this major industry in Quebec. Bolstered by funding, organizations can think about how to survive and thrive in this new reality. Some of this funding comes from government programs managed by groups like the Canada Media Fund and the Société de développement des entreprises culturelles. With all the uncertainty surrounding the public health crisis, businesses need to keep up with new assistance programs and how these financial support measures can help them transform their offer.
Learning to adapt
In Quebec, consumers have serious reservations about heading back to live performances or in-person exhibits. In fact, most say they wouldn’t attend a festival or visit a museum in the near future, even if these options were to reopen. As a result, organizations are having to find creative ways to stay alive, connect with audiences and generate cash inflows.
One example is Théâtre La Licorne, a theatre company that sought new ways of keeping their customer base satisfied and entertained during these challenging times. With live performances out of the question, they decided to offer their customers tickets to webcasts of their performances.
Meanwhile, the Just for Laughs Festival decided to go digital by broadcasting performances on an online platform. This move enabled the annual festival to build on its reputation and reach a broader global audience. In all, they grew their customer base by 23%.
When the plug was pulled on festivals, tent and public sanitation providers like Chapiteaux Classic and Groupe Star Suites shifted their offer to hospitals. More specifically, they provided planning assistance and equipment for setting up COVID-19 screening centres.
With so much of the population hunkering down at home, the already-popular online gaming industry saw their subscriptions soar. Since online games allow players to interact with friends and family as well as strangers, they give people a sense of accomplishment and connection through real-time communication.
After realizing just how effective games can be for building relationships and a sense of community, some gaming companies decided to fast-track production of key products to get them out faster and capitalize on growing consumer demand.
In the United States, one-third of all gaming customers are first-time subscribers. With schools and offices closed, more and more people are playing video games. For video game developers and publishers, this is the perfect time to attract new players.
Continuing to innovate and manage the crisis
The entertainment and culture is in the midst of a massive transformation, a process fraught with difficulties. To set the stage for success, each project needs to be approached with rigorous and innovative management. This is more important than ever.
In this industry, many companies plan projects at least a year in advance, a feat that’s next to impossible in the current crisis. You need careful cash management and a solid financial plan for each of your projects; your organization’s future depends on it.
Our team is well-known for its broad range of experience working with cultural organizations and television and film companies. We’re knowledgeable about the various assistance programs available, as well as the latest developments and financing and taxation affecting the culture and entertainment industry.
This article was written by Alain Lacasse , CPA, CA, assurance partner.