COVID-19 Series: Hoyts CEO Damian Keogh says 50% hit to Box Office likely, media faces 'accelerated structural change'
Damian Keogh was headed for Wuhan in January for the annual conference of Hoyts parent company and China’s biggest entertainment conglomerate, Wanda. The location was changed just days out because of the “Wuhan flu”. Keogh now says COVID-19 could trigger a 50% plunge at the Australian Box Office.
You need to know this:
- Hoyts has closed cinemas nationwide for the first time in its 111 year history
- The company, acquired by Chinese property and entertainment giant Wanda in 2015, has laid off circa 3000 Australian employees
- Senior executives have taken a 20% pay cut
- If restrictions remain into July or August, the $1.2bn Australian Box Office could drop 40-50% in 2020
- Keogh says the COVID-19 crisis “couldn’t have come at a worse time for the media and advertising industry”
- Mental health pressures and social isolation effects will rise in coming weeks
- Australia will follow US timing in re-opening cinemas – June, July or even August is the current “hope”
- Hoyts is running four different financial models based on the length of the crisis and cost scenarios
- Keogh expects a robust consumer return to the Box Office on the other side of COVID-19
- Less operational demand on leadership team has shifted focus to strategy development post-COVID. Keogh says Hoyts is treating the time as a “pre-season training camp”.
- Media agencies, he says, while facing significant headwinds of their own, have been “really impressive and sympathetic” with Hoyts-owned Val Morgan Cinema Advertising and Val Morgan Outdoor after the shutdown of theatres
“We’re in survival mode,” says Keogh, calling in to PodcastOne’s studios from his home in the Prime Minister’s electorate in Sydney’s south. “The important thing for us, and for a lot of other businesses right now, is just survival. Our revenue has dried up.”
Listen to the 20-minute Mi3 podcast with Executive Editor Paul McIntyre and Damian Keogh on why he’s bunkering down now but preparing for a fast rebound for cinema. People, he says, are social creatures. They’ll want to “spend time with other people and be entertained”.
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