COVID-19 (or coronavirus) is rapidly spreading around the world, causing entire countries to close their borders, and forcing businesses to rethink their approach to day-to-day dealings. Kidscreen is looking at how it has affected the kids industry, so far. 

Markets

The most visible impact the virus has had on the kids industry has, undoubtedly, been its effect on the market circuit. While events that took place in February, like Kidscreen Summit and Toy Fair, remained largely unaffected by travel restrictions and cancellations, upcoming events are up in the air.

Bologna Children’s Book Fair, which was scheduled for March has been bumped to May, while earlier this month, Reed Midem officially cancelled MIPTV 2020 (pictured), opting to hold it again in 2021 rather than reschedule it.

Attendance at the spring television market has been on the decline for a few years, and ahead of its cancellation, producers who spoke with Kidscreen said they had already planned on having a decreased presence ahead of the virus outbreak.

In the animation sector, longer-lead projects don’t necessarily suffer as greatly as other quicker-to-market formats, like live action or unscripted, says Jennifer Ansley, SVP marketing and communications at 9 Story. “It’s a bit cumulative—if we miss one market, it’s not going to have a huge impact—we tend to have a long runway,” she says. The Toronto-headquartered company can afford to miss a market or two, she says. Things become problematic if the virus is still causing disruptions six months from now.

Organizers at upcoming events such as Licensing Expo (May 19 to 21) and Annecy Animation Festival (June 15 to 21) have said they’re monitoring the situation closely, though it’s too early to make any recommendations.

Beyond marketplaces, individual companies are being cautions with their events: Disney+ cancelled its European media launch event scheduled for March 24 across the continent, the release of Sony’s Peter Rabbit 2: The Runaway was bumped to the fall, and DreamWorks’ Trolls World Tour moved its debut up a week.

Outside of the kids space, a number of film and entertainment events have been cancelled thanks to the threat, including film festivals across Europe. Most recently, E3 2020, which was scheduled for June, has been cancelled, the Game Developers Conference in San Francisco has been postponed, Austin’s SXSW was cancelled, and Coachella was rescheduled to the fall.

Travel

While markets have been obviously affected, Portfolio’s Joy Rosen says the more worrying issue is that many of the big broadcasters and streamers have banned staff from traveling—Netflix, NBCUniversal and WarnerMedia, for example, have all put a moratorium on staff flights. This isn’t necessarily a portent of doom, but the lack of face-time with commissioners is a challenge for producers trying to get shows greenlit. Ultimately, Rosen worries the industry will become paralyzed by a “wait and see” approach, stalling decisions until the spread of the virus blows over, or doesn’t.

That’s not to say there aren’t alternative solutions: CAKE CCO and managing director Ed Galton says the UK distribution company is looking at more teleconferencing options for its missed meetings, and while it has halted trips to heavily affected areas, it hasn’t stopped all travel altogether.

Manufacturing

In some cases, the toy industry has fared a bit better, thanks strangely to the proposed tariff issue that would have taxed goods in the US coming from China. While the tariffs didn’t go through, many US manufacturers stockpiled their products ahead of time, which has provided a bit of a buffer to weather the current manufacturing shutdown in China.

That’s not to say the virus isn’t already having an impact: Toy companies such as Spin Master have already warned investors of the impact the virus may have on bottom lines. In its recent earnings report, the Canadian toyco said its supply chain, with 60% of wares produced in China, will be disrupted. Florida’s Basic Fun! laid off 18 employees last week, or about 10% of its workforce, in anticipation of COVID disruptions. Similar announcements are expected from other toymakers.

At press time, the number of new cases of COVID-19 are slowing in China, though there’s no word on when things will be back to normal and full-force production will recommence. And as the virus spreads rapidly to other countries, and markets fluctuate as a result, it’s unclear what long-term impact this might have on the toy industry.

Viewership

On one hand, if more countries establish quarantines like China and Italy, that may mean more audiences are at home watching content, with SVODs seeing their stock go up on the heels of those assumptions.

In Italy, this decision to place the country under lockdown has left broadcaster Rai rushing to fill the content needs of kids and families, who’ve very suddenly had their educations and day-to-day activities disrupted. The broadcaster has opened up a family-viewing programming block on its generalist channel Rai2, as well as rolling out new shows on its kids channels.

However, with more people stuck at home, movie theaters have been hit particularly hard. Producers and distributors have already faced steep, localized declines in areas hardest hit by COVID-19. Specifically, China’s box office has lost US$1.9 billion in revenue since the outbreak began, while Italy has seen a dramatic 94% drop in movie attendance. Some analysts have predicted box offices could lose upwards of US$5 billion or more worldwide if the spread of the virus isn’t contained.

Production

Portfolio’s Rosen says some of her clients in China have had issues with production schedules—though it seems the tides are turning, with a handful reaching out to make it clear that production is set to ramp up again.

While China appears to be moving towards lifting its quarantine, studios and production companies elsewhere are increasingly looking at their work-from-home policies.

9 Story, for example, convened a small task force to monitor the situation and put in place a plan should any of its five offices be affected by the virus. While some roles are easy to shift to work-from-home, the production pipeline specifically is a bit more challenging, Ansley says. The task force is in the process of coming up with solutions for team members who’ve traditionally needed to be in an office.

So far, Kidscreen hasn’t heard of any productions in the kids space halting entirely.

Longer term, the big impact rests on what it means for buyers—something that remains unclear at this juncture, says Galton. “No one has said they aren’t buying, but this is going to have an economic impact across the globe,” he says. “It’s too soon to tell [what that means]. We’re mindful that there will be disruptions. It’s a matter of getting ready for it.”