The effects of COVID-19 on society are significant, and it is impossible to know when we’ll return to everyday life in the public sphere.
Experts have predicted that COVID-19 could reduce 12 billion dollars from the world of entertainment across the United States alone. The world’s largest entertainment company, Cirque du Soleil, shut down 44 shows worldwide and will not be able to reopen until the beginning of January 2021.
If the public’s safety is at risk during the summer, international concert promoters such as Evenko, AEG, or Live Nation are at risk of losing the crucial summer concert season.
Juggling immediate impact
As a result of public health regulations, Live event and entertainment companies have been focusing on safety for their employees while also ensuring their safety and smoothing out the curve. In the end, they’re now dealing with the immediate consequences of being unable to pay for “bums in seats” to cover their operation’s fixed and sunk expenses.
Cirque du Soleil has shut down 44 worldwide shows. Here, a performer plays with a ball flaming in the ceremony that opened the World Basketball Championship in August 2010 in Istanbul, Turkey. (AP Photo/Mark J. Terrill)
The live entertainment and live events industry has adapted to more security measures following 9/11, weak demand from SARS, and changes to schedules due to the weather or fire; however, it has never been closed globally. It could be resilient to recessions. However, it’s possible to shutdowns.
In times of uncertainty, managers have to deal with an inexplicably large amount of problems, multiple stakeholder requirements, and an uncertain outcome.
In times of uncertainty, it is essential to avoid letting managers let their guard down and act on their instincts.
Record systematically any implications
Although it might seem like an efficient short-term solutionnot considering impacts on the system can also increase the adverse effects. Instead, managers must systematically document their knowledge and seek out similar situations that can guide the strategic decision-making process during uncertain periods.
However, similar situations like COVID-19 are challenging to come by, and knowing what explanations for the effect of SARS to trust isn’t always straightforward. Medical researchers suggest that the media coverage regarding the impact of SARS has been ” excessive, sometimes inaccurate and sensationalist.”
From a health standpoint alone, 774 people died from SARS worldwide in the 2003 SARS outbreak, and 33,673 passed away from COVID-19 on March 31.
A few health professionals later viewed SARS as a “dry run” for an even larger global pandemic.
The most significant economic declines during SARS were those related to tourism, like airlines, hotels, and dining establishments in a small range of markets: Australia, Brazil, Canada, China, Hong Kong, South Africa, Spain, and the U.S. In comparison, more than 180 nations have confirmed instances of COVID-19.
Strategies for responding to crises
The global economy is in the midst of a period of utter uncertainty. How long social distancing limitations can deter people from attending an event or theatre has yet to be discovered, nor is the appetite of audiences post-COVID-19 for live entertainment and events. In the meantime, companies must follow strict crisis response plans until the industry can bring back the lights.
Two people stroll by an area known as the Cirque Du Soleil’s Big Top at Montreal’s Old Port on March 21, 2020. Cirque du Soleil has shut down 44 shows around the world. THE CANADIAN PRESS/Graham Hughes
As per McKinsey’s latest COVID-19 report, it is necessary to take appropriate actions to consider the uncertainty of the environment and have enough financial liquidity to keep the company afloat during the storm.
Therefore, further cancellations, wage reductions, consolidations, and massive cuts from entertainment and live events companies will likely occur in the coming weeks.
Key creative assets
But, even if they decide to lay off workers to save capital, managers must proceed cautiously and determine the creative assets of their company that need to be reclaimed. Live events and entertainment are people-centered businesses dependent on producing emotional experiences and human interaction. Eliminating too many or a subset of employees could hinder the ability to restart operations once the crisis is over.
The author of an article published in Harvard Business Review on managing in turbulent times also recommends taking practical actions and fostering emotional stability to help employees and help them feel better instead of doing nothing.
A common reaction to crises is to ensure that customers are engaged to ensure that they can return once the circumstances allow. This is more important, considering that businesses are likely to launch new products simultaneously and be involved in an expensive battle to win audiences with limited attention. Employees should be encouraged to keep their brand visible by interacting with customers unexpectedly and in new ways.