In an industry that seeks to captivate, shock, inspire and amuse audiences of every stripe, some risk-taking is certainly essential — but likely among the most difficult to manage. Here are the top risks — some established and some emerging — facing the entertainment industry today:
Reputation – In the entertainment industry, a performer’s image is just as important as their genuine talent (if not more so). Bad behavior is punished with negative press, merchandise boycotts and declining sales. In worst-case scenarios, stars lose their work altogether. Take the recent example of Roseanne Barr. After successfully revitalizing her original 1990s sitcom “Roseanne,” her new show was cancelled before the end of its first season after the namesake star published a racist Tweet. Not only will the incident cost her future work, but it also eliminated the livelihoods of her fellow cast mates and crew. ABC, which aired the show, may have saved some face by acting swiftly in its cancellation of the show, but reputation risk generated by TV stars certainly extends to the entities that distribute their content as well.
Cyber – Cyber risk takes on multiple forms in the entertainment industry. Streaming services like Netflix, Hulu and Spotify are reliant on uninterrupted service. A cyberattack that renders those platforms inaccessible could anger advertisers seeking a certain amount of visibility and will certainly frustrate viewers paying a monthly membership fee for on-demand content. Theft and leaking of intellectual property are other top concerns. Netflix and HBO both suffered hacks and subsequent leaking of popular TV show plots in 2017. Losses like these can cause a company to lose market share due to reputation damage and interrupted revenue.
Violence – Paris. Manchester. Las Vegas. All are grim demonstrations of the vulnerability of entertainment industry events to violent acts. Anywhere a lot of people are gathered in a confined space, there’s an opportunity for a mass casualty event. Failure to take extra precautions could lead to victims holding event organizers liable for injuries or deaths caused by an attack.
New Business Models – Advances in technology have helped content creators eliminate the middleman and push their work directly to consumers across a variety of platforms. User-friendly production software enables aspiring starts to create high-quality content and deliver it to consumers via YouTube, Instagram, Facebook or their own websites.
Talent Risk – The success of most entertainment companies is dependent on its stars. The artists and performers that audiences pay to see and listen to. But when so much of an album, a movie or television shoot, or a concert revolves around an individual, that individual presents as much risk as opportunity. If for any reason a star can’t fulfill his or her duties, production companies have to scramble for a Plan B. Those reasons can encompass everything from sickness, injury or death, pregnancy, arrest to something as simple as getting stuck at an airport. Entertainment companies typically carry cast insurance to cover extra expenses associated with executing Plan B, but changing plans last-minute can introduce or elevate other existing risks.
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