Pandemic to Spawn ‘Permanent Changes’ in Film Industry: S&P

The U.S. media and entertainment industry is working to put COVID-19's effects behind it, reported S&P Global Ratings Wednesday. Recovery in the “advertising-focused” media sectors has been more “robust” than in others because ad spending began rebounding in 2020's Q3 and will, “in aggregate,” surpass pre-pandemic levels by year-end, it said. “Out-of-home” entertainment sectors, like theatrical film exhibition, “haven't fared as well” because their recovery has been blunted by “consumer and government reactions” to the spread of the delta variant. Though S&P expects out-of-home entertainment revenue to rebound in 2022, “it could take until 2023, or beyond, for the credit metrics of the participants in this segment to fully recover given their higher debt levels” following the pandemic, it said. An increasing number of films “skipped theaters and were released directly on streaming services” even before COVID-19, said S&P. “Then the pandemic struck, which ... accelerated the preexisting secular shifts. Even as theaters have begun reopening and the backlog of movie releases begins to clear, we believe the pandemic will lead to permanent changes in the film industry.”