“The leisure trade had a really constructive yr in 2022 and a welcome restoration is unquestionably underway, however we’re not out of the woods but,” stated Michael Furtschegger, world head of leisure at AGCS. “Within the three years because the coronavirus first hit the headlines, the world has modified. The sector should proceed to evolve consistent with new applied sciences, proliferating platforms, and seismic shifts in patterns of consumption, in addition to modifications within the public temper, significantly amongst youthful generations.”
Regardless of the challenges confronted by the trade, shoppers are returning to their most well-liked leisure venues or platforms, AGCS stated. World field workplace receipts reached $25.9 billion final yr, a 27% rise from 2021, in response to Gower Avenue Analytics. Nonetheless, that quantity continues to be 35% under the typical for the three years earlier than the pandemic.
Reside music income is anticipated to surpass pre-pandemic ranges subsequent yr, with digital music streaming subscriptions driving progress in recorded music, the place revenues are predicted to achieve $45.6 billion in 2026, up from $36.1 billion in 2021.
Reside theater can also be seeing a comeback, with rising receipts and attendance. The worldwide sports activities trade can also be proving resilient, supported by media rights, sponsorship offers, and a calendar of worldwide occasions and tournaments, AGCS stated.
Challenges stay
Nonetheless, the leisure trade shouldn’t be resistant to financial tendencies equivalent to workers shortages and rising prices, AGCS stated.
“Our leisure purchasers are feeling the results of inflation, with elevated manufacturing and live-event prices,” Furtschegger stated. “Staffing prices have risen following the abilities scarcity that occurred within the wake of the pandemic, when many left the trade. Venues are scarcer than they had been as a result of there are nonetheless many exhibits postponed from the pandemic that must happen along with new occasions and festivals. Larger occasions could also be thriving, however smaller occasions are extra challenged by elements equivalent to venue, transportation, and vitality prices. We count on to see extra consolidation within the trade, with smaller, struggling manufacturing corporations and venues being purchased by bigger operators.”
High quality not amount
Know-how has lowered entry boundaries for content material creators, with virtually anybody in a position to add content material to TikTok or YouTube. In the meantime, the key studios and tech companies are launching their very own platforms. The quantity of content material now being distributed makes high quality a key differentiator in a crowded market, AGCS stated.
“We see a transfer in direction of high quality in movie manufacturing, however this doesn’t come low-cost,” stated Wanda Phillips, head of North American leisure insurance coverage at AGCS. “Companies must know they’ve ample insurance coverage cowl for classy productions. The place prices enhance, so, too, do exposures as a result of the prices are larger with every day of capturing, and this may very well be mirrored in any insurance coverage loss.
Sustainability issues
Environmental, social and governance points are having a rising affect on the leisure sector, AGCS stated.
This yr’s Oscars ceremony will characteristic inexperienced attire on the Purple Carpet because the Academy encourages a extra sustainable strategy to awards trend. In dwell occasions, the British band Coldplay has promised to halve the carbon emissions related to its present world tour, in comparison with 2016-2017, and has made an array of sustainable commitments, together with paying a surcharge for aviation gas, sourcing moral and sustainable merchandise, and planting a tree for each ticket bought.
Learn subsequent: AGCS faucets product lead for dwell occasions
“Youthful generations are significantly involved about sustainability, and pageant organizers are responding to this,” Furtschegger stated. “Increasingly leisure organizations are committing themselves to sustainability targets to scale back the emissions related to dwell excursions.”
Digital future
With streaming now a elementary a part of the leisure and media sector, digital conferences are a specific progress space, AGCS stated. The worldwide digital occasions market was valued at greater than $114 billion in 2021 and is anticipated to develop at a compound annual progress price of 21.4% between 2022 and 2030.
Even with no dwell viewers, digital occasions nonetheless face dangers, together with transmission failure as a consequence of climate or pure disaster, hearth affecting the printed unit, or community points impacting broadcasting infrastructure. Rented tools and studio area may also be susceptible to property and casualty liabilities.
Digital actuality is the fastest-growing leisure and media section, with world progress between 2021 and 2026 predicted to carry the section to $7.6 billion. Gaming is forecast to account for 85% of complete VR income by 2026.
“Because the worlds of gaming, music and leisure proceed to converge, gaming platforms equivalent to Fortnite and Roblox are more and more serving as leisure and social hubs, whereas gaming content material is crossing over to social media and streaming platforms,” Furtschegger stated.
Rising dangers
Well being and security protocols, growing climate hazards and crowd security are a number of the prime threat issues the leisure sector ought to monitor, AGCS stated.
“The COVID disaster and the latest tragic capturing incident on a movie set have proven that the trade wants to stay vigilant about well being and security protocols,” Furtschegger stated.
Local weather change is one other trigger for concern.
“We’re seeing extra irregular weather-related occasions – heavy storms and flooding in Europe and brushfires in California, for instance,” Furtscchegger stated. “These inevitably trigger havoc for dwell occasions, each by way of cancellation publicity but additionally damages and human security.”
“Crowds have all the time carried inherent dangers,” stated Kurt Miner, managing director of leisure at Allianz Danger Consulting, North America. “Occasion organizers at the moment are higher in a position to monitor giant teams of individuals and hold them secure, in addition to artists, with using real-time video monitoring. Security specialists can remotely monitor two or three occasions, which might every be happening over 15 acres or extra, recognizing threat issues equivalent to blocked exits or broken boundaries. They will additionally monitor social media to pre-empt gate-rushing and stop stampedes, sending a safety contingent to the situation earlier than the state of affairs will get out of hand.”
Slips and falls are the most typical reason behind claims from live-event insurance policies, so organizers ought to be certain that medical workers and transport to native medical amenities are on-site, AGCS stated.
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