Covid-19: $120BN impact on CE, entertainment content and pro AV spend | Media Analysis | Business
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Research from Futuresource Consulting evaluating the potential financial impact on consumer electronics (CE), entertainment content and professional AV markets has come to the worrying conclusion that the disruption from coronavirus will see as much as $120 billion wiped from the retail value of these sectors combined when compared with pre-outbreak forecasts.
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Scenario modelling in the new report, Covid-19 Market Impact Report April 2020, has seen the consultancy firm present a number of long-term possibilities, with the best-case scenario seeing the worst of the impact being on supply chains. This predicts disruption, but in this model, manufacturing and logistics will return to normal before the end of the first half of 2020 and there will be what the analyst calls a ‘reasonably seamless’ return to business as usual. Fiscal and monetary stimulus packages will stabilise markets and restore consumer and market confidence, compensating for some, but not all, lost shipments.

In the worst case scenario, key vendors will struggle to bring new products to market, with some devices seeing significant delays in release. It sees market disruption continue throughout 2020 into 2021, with the pandemic either proving difficult to contain or resurfacing as further outbreaks occur throughout the year. This results in a global recession, with markets worldwide entering a period of decline.

Yet the analyst stressed that all will not be doom and gloom. “Interruptions within supply and manufacturing chains, coupled with the necessary social lockdowns have inevitably led to substantial downward pressure on many industries,” noted Simon Bryant, director of research at Futuresource Consulting. “In contrast, some categories within CE, entertainment and professional AV sectors are benefiting from the social distancing measures. Video conferencing, gaming and subscription video-on-demand (SVOD) are good examples.”

Indeed in the Covid-19 Market Impact Report April 2020, Futuresource sees digital video as one of the big winners, estimating that “stay-at-home” orders will boost growth by 200% over pre Covid-19 forecasts. However, it also calculates that total consumer spend on video, TV, music and games will fall by 1% in 2020 due to declines in pay-TV, box office and packaged media.