The entertainment industry is a dynamic and rewarding field, but its unpredictable nature can pose financial challenges behind the curtain. As an entertainment professional, it is essential to anticipate industry disruptions and proactively prepare for them. This article explores potential industry disruptions, offers practical strategies for entertainment professionals to build resilience, and highlights why diversification and financial planning are essential tools for today’s entertainment professionals.
What Are Industry Disruptions?
Disruptions in the entertainment industry can arise for a variety of reasons – some are foreseeable and others, less so. These disruptions may include:
- Shifts in Technology
The rise of streaming platforms has challenged traditional models such as network television and redefined how content is distributed and consumed. Similarly, artificial intelligence (AI) is revolutionizing traditionally human roles through its ability to handle tasks that have previously required countless hours of human labor. The introduction of this technology has implications for scriptwriting, voice work, and film editing. *Please refer to our previous post for more information on the impact of streaming services on entertainment professionals. - Economic Recessions
Economic recessions often lead to budget cuts in production houses and reduced discretionary spending on entertainment. Additionally, the rising costs of producing and marketing movies and TV shows put more pressure on profitability, forcing studios to keep a closer eye on budgets during tough times. - Labor Strikes and Legal Changes
Recent labor disputes, such as the 2023 SAG-AFTRA writers’ and actors’ strikes, highlight how disruptions to collective bargaining agreements can bring production schedules to a standstill, directly affecting thousands of workers. - Global Events
From pandemics to geopolitical tensions, global events can halt production, delay releases, or shrink live and theater audiences, as was evident during the COVID-19 pandemic. Research firm Ampere Analysis reported the global entertainment sector would lose an estimated $160 billion of growth between 2020 and 2025 as a result of the pandemic. - Shifts in Consumer Preferences
Changing audience tastes can abruptly render certain genres or formats less viable, such as consumers showing a decline in-person theater attendance or increased demand for original streaming content. Adapting to these shifts often requires significant investments in retraining or rebranding.
While disruptions may be unavoidable, their impact does not have to be catastrophic. In our next post, we will cover essential financial strategies to weather these disruptions.
This blog is intended for informational purposes only, and should not be construed as tax, legal, or accounting advice. Please consult with your tax, legal, or accounting professionals for any advice and guidance.