The media industry has been hit hard by COVID-19. Michelle Wroan, Media Industry Leader at KPMG, discusses how companies are addressing immediate liquidity and cash burn concerns and working toward a strategic response to resilience, recovery and a new reality.
Hi I'm Michelle Wroan media industry leader at KPMG.
The media industry has been hit hard by Covid 19. Film and television production has pretty much come to a halt. Movie theater chains have closed, and most live events have been postponed.
While most companies are still focused on these near-term issues addressing liquidity and cash burn, their strategic response to resilience, recovery, and a new reality is important.
Resilience means including immediate actions around preserving cash, giving confidence to customers and ensuring business continuity.
We call this the four C's: customer, cash, cost and capital.
And specific to content distribution this would include being proactive around subscription renewals, guaranteed price-locks, early releases of content, longer free trial periods and for the live-event business, this would mean modeling out cash flow as you look towards new live event structures with differing attendance levels, different pricing, potential new costs around safety protocols, and entering an area of recovery would include performance improvement actions around maximizing the options in the space of uncertainty.
This would include reallocating resources toward subscriptions streaming, digital offerings and consolidating silos where possible and other common functions such as ad sales, production, marketing.
And lastly assessing new opportunities that arise as customer and market disruption settles opportunities to inspire confidence to accelerate a return to live events which could include the same new safety protocols and other measures. Opportunities to reach expanded audiences through home releases of content at the same time as there's a launch virtually on other platforms.
Potential for expansion of audiences through combined live and virtual events. As we've seen in the past, companies that proactively plan for the future will outperform their peers during a time of recession.
Media companies that focus on moving from short-term challenges to recovery and preparing for a new reality will emerge in the best position. In the meantime, please stay safe and healthy.