Bangladesh's film industry has been going through challenging times, particularly during the last one-year period when movie theatres remained closed most of the time due to the Covid-19 outbreak.
Though movie theatres are open now, the number of movie-goers per show is significantly lower than the old times when things were normal.
However, in an environment where stakeholders have been bracing themselves for a better year in 2021 and quite a few new movies are planned for release, the risk of a low turnout and lower revenue still looms large.
In such hard times, movie theatres in Bangladesh need to reconfigure their business to adapt to the 'new normal' quickly.
The Central bank has recently announced a special plan through which movie theatre owners can borrow money easily to renovate and upgrade their theatres. This initiative is expected to encourage many movie theatre owners to repair, rethink, and reconfigure their infrastructure as well as their business model.
The pandemic has affected the media and entertainment industry's track record of consistent revenue growth around the world.
In fact, it brought the industry to a standstill during lockdown periods in many countries. This resulted in the significant shrink of global industry's overall revenue. PwC's projection in 'Global Entertainment and Media Outlook 2020-24' has indicated that the industry's revenue would contract by around 5.6% in 2020.
A deep analysis conducted by PwC revealed that the pandemic has accelerated the ongoing shift in consumers' behaviour. This change has accelerated digital disruption in the industry, which would have, otherwise, witnessed a gradual change in a pandemic-free environment.
In this world of socially distanced individuals, segments such as over-the-top (OTT) video and data consumption-based services emerged, thrived, and grew significantly in 2020.
In Bangladesh, there are some start-ups that are in the streaming service business – a very popular OTT service. Some of these companies receive incubation and mentor support from various start-up enabling platforms supported by large organisations.
A few leading foreign streaming services are also becoming popular in Bangladesh. These services generally target young and 'tech-savvy' consumers in the country.
The regulator, Bangladesh Telecommunication Regulatory Commission (BTRC), has also begun issuing regulatory guidelines for foreign service providers in order to facilitate local investments, including installation of cache servers to improve quality, and to facilitate tax collection by the revenue department.
These initiatives are expected to create a level playing field for both local and foreign service providers and enable them to compete effectively in the market.
The commercial success of these services is, however, yet to be proved in Bangladesh. It is too early to comment on their growth prospects and sustainability. Certain factors such as lack of sound infrastructure and unavailability of high bandwidth internet connections at home are likely to be impediments to their growth.
PwC's analysis of the global media and entertainment industry indicates a significant shift towards OTT services.
According to the analysis, box office revenues were three times more than subscription-based video-on-demand services (SVOD) revenues in 2020. Revenues from the box office and SVOD sectors had achieved parity in 2019 and now, SVOD revenues are rapidly surpassing box office revenues.
According to PwC's analysis, global SVOD revenues are expected to be two times higher than global box office revenues by 2024.
The analysis also reveals that more data was consumed through smartphones than traditional broadband-based connections for the first time in 2019. This trend has been growing further since then; by 2024, data consumption through smartphones is projected to be around 50 percent higher than via traditional broadband connections.
This change in consumers' behaviour is likely to lead to substantial growth in the content streaming business. For example, entertainment content makers will design content keeping in mind much smaller smartphone (or TV) screens than large screens in movie theatres.
The proliferation of streaming services has enabled content makers to personalise entertainment for each consumer segment at a minimal cost. Moreover, technology has enabled them to establish direct engagements with individual consumers and deliver an enhanced experience to them at a low cost.
The shift in consumer behaviour has given rise to many different types of services beyond movies.
Consumers began using these services to compensate for not being to engage in outdoor and physical fitness activities. For example, those who were health-conscious, but could not go out of their homes due to the lockdown amid the pandemic outbreak, began using streaming health and fitness services by paying monthly subscriptions.
Now, with the economy slowly graduating to a new normal, many such individuals are expected to continue their subscriptions as a substitute option to exercising at fitness centres. Many such people are expected to return to fitness centres but continue with their streaming subscriptions as an alternative option.
The pandemic has also influenced the reconfiguration of the industry's revenue model. There has been a visible shift in the generation of revenues through subscription fees collected from consumers vis-à-vis revenues generated through advertisements.
However, while the entertainment and media industry shrank appreciably in 2020 due to the pandemic, many emerging countries showed impressive growth in these segments. For example, the entertainment and media industry has grown by 8.8% in India, according to PwC's Global Entertainment and Media Outlook 2020-24.
Worldwide, entertainment and media businesses are hoping for 2021 to be a good year. PwC's analysis reveals that the industry will get back to its growth trajectory very soon and will consistently grow till 2024.
The industry in Bangladesh also has considerable growth potential. With the right kind of economic stimulus and other support, it is expected to bounce back to its growth path.
Arijit Chakraborti is a partner with PricewaterhouseCoopers Private Limited.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.