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Media and Entertainment (M&E) Industry in Times Covid 19

The beginning of the new decade started with the world wide spread of the novel coronavirus (Covid-19) which made governments all around the globe to initiate lockdown in order to control its spread. In India, the government initiated the lockdown on 24th march 2020 in order to control this historic outbreak because various sectors in the country such as employment, education, health have been affected. The unprecedented outbreak of Covid-19 has adversely impacted the media and entertainment industry comprising print media, television broadcasts, and film productions along with various other distributions and over the top platforms.

The Media and Entertainment industry which was in the year 2019 worth INR 1.82 trillion in 2019 (according to FCCI) is currently starting at INR 25000 crore loss [1].The Events and entertainment management association (EEMA) in recent had conducted a survey with 170 companies that were directly affected by the pandemic covid-19 , this survey underlined the revenues and losses impacted, employees affected and the funding they would require in order to get a long run stability [2]

ICRA's Outlook On The Current Situation For The Media Industry

ICRA is an Indian Independent investment information and credit rating agency which currently has a negative outlook for the film, print media and television broadcasting segments. ICRA has predicted that the credit metric for the members of the media exhibition sectors will weaken materially and regards to the print sector, revenue circulation was already impacted disadvantageously by around 40% on a year over year basis this year [3].

Impact On Box Offices

Even before the government had initiated the lockdown, cinema halls were first among many public spaces to shut down once the news of Covid´┐Ż19 came into the spotlight. This led to postponement of various theatre releases, shutting down of various productions of movies and television shows and put an indefinite halth to many ongoing shooting productions. With such issues even when the theatres reopen the occupancy by the consumers may be limited which will in return create huge losses post lockdown in the financial year of 2021 [4].

Employment Issues In The M&E Sector

The employees of the media and entertainment industry are divided into two sectors which include one those who are employed on a 'permanent basis' and other can be categorised as temporary or freelancers who work on a 'contractual basis' for certain projects.

Both of these groups of employees have been severely affected during this period of lockdown.

Permanent Employees

This group of employment is covered under various laws such as 'Payment of wages act of 1937, 'Equal remuneration act of 1952', the 'Employees provident fund act of 1952'. These laws does not include any kind of provisions regarding such unprecedented situation of heavily contiguous pandemic, but on March 29th 2020 the Ministry of home affairs passed an order stating all the employers of such employees had to pay their wages without any deduction in regards to the closure of their work establishment due to the lockdown, hence ensuring their financial security & well being.

Contractual Employees

This group is covered under the 'Indian contract act of 1872', these are the kind of employees who have been hired for a specific period of time in order to accomplish a specific task or work for a particular project and they are often paid on a regular basis on the accomplishment of their task. Majority of such employees in the media industry work on such contractual basis and the have been majorly affected due to cancellation of shoots and productions for which they had been hired specifically.

Similarly the order which had been passed by the ministry on the month of March will also be applicable for this scenario but the contracts under which they work has a date of termination which they need to analyse in order to get the maximum benefit in this situation [5].

Contractual Obligations

EEMA, known as the Events and Entertainment management association, recently conducted a survey which consisted of 170 companies which were directly affected by this epidemic. Lately it has filed a petition which appeals to the Indian Government to step in with measures in order to support the lives of 60 million people who are directly- indirectly associated with the industry[6].

The EEMA report finds that:
  • 52.91% of companies had 90% of their businesses cancelled between the months of March and July this year.
  • Certain ideal working capitals and loans for 2-5 crore are going to keep afloat 39 companies and 1-2 crore 118 companies only for the next 6 months
  • 63.1% of companies has suffered revenue losses up to 1crore this year
  • Almost 97 companies will be required to raise capital or debt from certain financial institutions or shareholders in order to be afloat.
This report represents over 1,00,000 organisations and companies that were heavily affected by this pandemic and urges the government to take instant actions like paying out of income tax refund dues and the due payments to be paid by the state and the central governments to the event companies.

Contractual Obligations

The instantaneous global lockdown has affected quite a few contractual obligations between parties all over. Since the media industry intensively depends upon contracts to run their businesses, the non- performance of various contractual obligations due to the lockdown has had quite an intense impact on the industry.

Non- performance of contract is subject to the contents of Force-majeure and Doctrine of frustration.
  • Force Majeure

    Force Majeure translates to 'irresistible force', this concept even though not included in the legislature but is widely accepted in the court of law. In order to cover the Covid-19 pandemic under the 'Force Majeure' clause it should be stated that this event is Beyond the reasonable control of the party affected.

    In most situations this clause will either suspend the performance of the contract for a particular time period in which the event is taking place and if the duration of the occurrence of the said event extends then it would provide an option for the termination of the said contract to the designated party.

  • Doctrine Of Frustration

    This doctrine is covered under section 56 of the Indian Contract act, 1872. This statutory relief is only available to the parties when remedy could not be achieved from the Force Majeure event.

    Secondly the parties in the contract could also come to a mutual understanding and can suspend the contracts until normal situations are restored after which they are able to fulfil their respective contractual obligations.

Importance Of Insurance

The Media and Entertainment sector is such a business sector which is obligated to require insurance in order to secure itself from various financial losses which may occur due to unexpected events.

The various insurances available to the media and entertainment industry which would be of great import to them in this current unprecedented scenario of this pandemic are:
  • General Liability Insurance

    This is the kind of insurance which is commonly utilized by the Indian media and entertainment sector. This particular insurance is considered as one of the most important insurance policies in this sector as it covers third party liability as well as covers certain cases where there is a project delay which may occur due to Unforeseen Events.
    It is also essential to notice that, not all insurances cover pandemics and in fact it is quite a common practice to exclude Pandemics.
  • Cast Insurance

    This kind of insurance is extremely useful in this current situation of Global Pandemic as many of the cast members of certain productions or shoots may be affected because of it and with the help of this insurance the casts may be able to find financial aid.
  • Workers Compensation Insurance

    This is helpful when a particular venture form business is unable to acquire a certain amount of revenue in order to pay its workers their salaries. In the case of the media and entertainment industry workers include sound, lighting, production workers. This particular kind of insurance assures them to cover such cases of such unforeseen events.

The Covid-19 pandemic has impacted not only the Media and Entertainment sector but the entire business community. Even after the lockdown comes to an end there are certain changes that the media industry will need to adopt in order to look after the health and safety of the employees and workers so that they are able to resume their work.Some of the regulations which are needed to be followed in the current situation are:
  • Regular sanitization of work place, shooting areas, and offices.
  • Digital content creation, meetings and table readings for various shoots.
  • Continuous usage mask and protective gears in order to minimise spread of virus.
  • Having proper crowd control
Hence the Media and Entertainment industry will need to get used to the new practices and operations post the Covid-19 lockdown. Therefore stepping towards a brand new way of revenue generation.

Written By: Amrita Ghosh, Institution: KIIT School Of Law
This Article emphasises on the media and entertainment sector and how it has been affected by the current pandemic Covid-19. This article consists of how and what sub sectors of the industry have suffered due to this virus and what precautions and rules and regulations the government has adapted in order to facilitate the sector.

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