The media and entertainment industry is a dynamic and agile sector. However, the effects of COVID-19 on the industry are complex and highly dependent on which subsector one is operating in, varying from an uptick in demand to a need for a complete rethink of the business model.

The same applies to the issues that media companies will seek to address in the months and years ahead.

For example, streaming services and gaming subsectors have seen increased demand during the pandemic, and these companies must evaluate what this means for their investment in IT infrastructure and new products and services. The events subsector and a portion of the advertising subsector have, on the other hand, experienced a decline in business and a need to stabilise cash flow, refine financial forecasts, and to pivot some – or even all – of their services. For many media companies, existing business models have been disrupted, leading to questions such as: which changes are temporary, and which ones will remain over the longer term?

Media companies operating across all subsectors are undergoing a technology-driven evolution to respond to changing customer preference for unique, digitally enabled, customisable experiences. Funding for growth to innovate and to further develop existing service offerings must be balanced with strong ROI, and timely integration of new technologies. Accelerating digital transformation has been a priority across the media sector – even before COVID-19. Now, the need to act quickly is acutely felt as new technologies, such as AI, AR/VR, and 5G, create new opportunities.

At BDO, we offer multidisciplinary professional services which includes financial auditing, tax consulting and compliance, business valuations, forensic accounting, financial outsourcing, merger and acquisition, due diligence, plus advisory on complex matters, including transaction advisory services, revenue recognition,  reserve estimations, technology issues, and risk management.