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 .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
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 .
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 Covidľ19 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 .
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
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.
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 .
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.
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.
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
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
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
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
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
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
- Continuous usage mask and protective gears in order to minimise spread of
- 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.