Coronavirus has dimmed the lights on live entertainment. What now for event managers?

Written by Chris Gibbs & Louis-Etienne Dubois, Ryerson University. Photo credit Oscar Keys/Unsplash. Originally published in The Conversation.

Until entertainment industries can turn the lights back on, companies should follow strict crisis response strategies.

COVID-19’s impacts on society are unprecedented and nobody can say precisely when we will return to normal public life.

Experts predict that COVID-19 will cut US$12 billion out of the entertainment industry in the United States alone. Global entertainment giant Cirque du Soleil shut down 44 shows worldwide and will not reopen until January 2021.

If public safety is still at risk in the summer, global concert promoters like Evenko, AEG or Live Nation will be at risk of losing the important summer concert season.

Juggling immediate impact

In response to public health directives, live event and entertainment companies have focused on public safety, protecting employees and flattening the curve. As a result, they are now left coping with the immediate impact of not having “bums in seats” to pay for their operations’ fixed and sunk costs.

Cirque du Soleil has shut down 44 worldwide shows. Here, a performer juggles flaming balls during the opening ceremony for the World Basketball Championship in August 2010 in Istanbul, Turkey. Photo credit AP Photo/Mark J. Terrill.

The live events and entertainment industry has survived increased security measures after 9/11, weak demand from SARS and re-schedulings due to fire or weather, but it has never globally closed down. It may be recession-resilient, but it is not shutdown-proof.

During times of uncertainty, managers often juggle an infinite number of issues, multiple stakeholder needs and an unpredictable range of outcomes.

When leading through uncertain times, it is critical that managers avoid the urge to throw up their hands and act purely on instinct.

Systematically record implications

While it may seem like an effective short-term response, failing to account for systemic implications could also exacerbate the negative impacts. Instead, managers should systematically record knowledge and look for analogous situations to identify patterns that can inform strategic thinking in uncertain times.

Yet analogous situations to COVID-19 are difficult to find, and knowing what accounts of the impact of SARS to rely on is not necessarily clear. Medical scholars suggest media coverage about the impact of SARS was “excessive, sometimes inaccurate and sensationalist.”

From a health perspective alone, 774 people died from SARS worldwide during the 2003 SARS outbreak, while 33,673 people have died from COVID-19 as of March 31.

Some health professionals later considered SARS to be a “dry run” for a greater global pandemic.

The most significant economic declines during SARS were tourism-related activities such as airlines, lodging and restaurants in a limited number of markets; Australia, Brazil, Canada, China, Hong Kong, South Africa, Spain and the U.S. By comparison, more than 180 countries have confirmed cases of COVID-19.

Crisis response strategies

That means the global economy is entering a stage of unparalleled ambiguity. How long social distancing restrictions will keep people from going to a concert or theatre is unknown, as is audiences’ post-COVID-19 appetite for live events and entertainment. Until the industry can turn the lights back on, companies should follow strict crisis response strategies.

Two people walk by the Cirque du Soleil Big Top in Montréal’s Old Port on March 21, 2020. Cirque du Soleil has shut down 44 shows worldwide. Photo credit THE CANADIAN PRESS/Graham Hughes.

According to McKinsey’s recent COVID-19 report, this implies taking proportionate actions to account for the ambient uncertainty and ensuring sufficient financial liquidity to weather the storm.

As such, more cancellations, wage cuts, consolidations and massive layoffs from live events and entertainment companies are to be expected in the coming weeks.

Key creative assets

However, even when laying off people to preserve capital, managers should proceed with caution and identify the key creative assets that must be salvaged. Live events and entertainment are people-based businesses that rely on the creation of emotional experiences and human interactions. Shedding too many employees, or the wrong employees, may impede the ability to resume operations when the crisis ends.

The author of an article in Harvard Business Review about management in uncertain times also suggests taking pragmatic actions and cultivating emotional steadiness in order to support employees and make them feel better than doing nothing.

In addition, a common response to crisis is to maintain customer engagements so that they return when the conditions allow. This is even more critical now knowing that companies are likely to relaunch all at the same time and engage in a costly battle for audiences’ limited attention. Employees should be encouraged to keep their companies’ name out there by connecting with customers in surprising and unexpected ways.

Keeping in touch

Both creative companies and performers themselves have reached out to audiences. Los Angeles-based Theatre Unleashed started performing cast readings through Zoom, while the Centre for Puppetry Arts, based in Atlanta, has taken steps to ramp up its online programming.

Artists like Neil Young and Keith Urban recently hosted impromptu performances through platforms like Instagram, and are actively staying in touch with their fans.

No one really knows what the other side of this shutdown will look like. That means companies ought to take this time to think and collaborate with their key people. They should also consider reaching out to suppliers, clients and even competitors to pool resources, share best practices and maintain relationships.

Imagining outcomes

Lessons from crisis response and management suggest that using techniques like scenario planning or “table topping,” where stakeholders can imagine or project potential future outcomes, are important.

Those who care about an organization’s mandate and vision can explore prospects for slow or fast recovery, weak or strong demand, local or global re-openings. Such exercises may involve mapping issues, discussing implications and developing strategies.

As the world awaits the end of social distancing measures, live event and entertainment companies have no choice but to pause and look forward — anything but just throwing their hands up.