The entertainment industry has been hit hard by two years of restrictions during which venues were closed or had extremely limited access. Over the past year, the public has started going to theaters again, but the recovery is fragile, many technicians have left the sector and the industry is now facing a slowdown caused by inflation and the risk of recession.
The cultural sector did not have it easy during the pandemic, and if it managed to survive, it is thanks to the significant financial assistance of the Quebec government which compensated for part of the losses of presenters and artists. But the recovery is not self-evident for everyone.
Jean-François Renaud, the new chairman of the board of the Quebec Association of the Record, Entertainment and Video Industry (ADISQ), believes that the cultural sector is now in post-crisis landing mode and he wishes that it is done smoothly, despite the threats that still hover.
Holder of a baccalaureate in finance and an MBA, Jean-François Renaud founded the Concertium performance agency in 2009, which represents around fifteen music and variety artists. He has been a member of the board of ADISQ for 10 years.
It is said that culture generates the intangible, but cultural industries create jobs and generate significant economic spinoffs, particularly in the restaurant and hotel sectors.
Jean-François Renaud, Chairman of the Board of ADISQ
“Culture creates value, but does not capture it,” observes the man who has been working in the industry for 25 years now, after starting out with Donald K. Donald and a stint at Spectra.
With total revenues of more than $15 billion (in 2019, before the pandemic), the cultural industries represented approximately 4% of Quebec’s GDP and employed some 160,000 people in Quebec.
The entertainment and sound recording industry, the two activities overseen by ADISQ, were responsible for $4.2 billion of the GDP attributable to cultural industries, or more than a quarter.
A changing industry
The record and entertainment industry has not only been impacted by the last pandemic. The entire industry was hit hard by the digital revolution of the 2000s and its business model was completely transformed, as the advent of streaming platforms reversed the industry’s revenue pyramid.
“In the 1990s, artists made less than a third of their income from the live performances they gave, while album sales made up the bulk of their earnings.
“Today, live performances and tours represent 75% of their income and the sale of their music online only accounts for 25%,” emphasizes Jean-François Renaud.
The industry suffered a 15% drop in revenue during the 2008 financial crisis and it took two years to recover.
The pandemic-induced crisis has meanwhile been catastrophic, as the entertainment and recording industry saw an 87% drop in revenue in 2020 and 82% in 2021, compared to 2019 levels.
“We do not yet have the figures for 2022. We started operating again with full rooms in March of last year. There is a definite revival, but a lot of the shows that toured were revivals of productions that had been canceled during the pandemic. The projects of new artists have not yet all found their place,” laments the president of ADISQ.
Many room technicians in Montreal and in the regions left the profession because there was no work and this shortage affects the return to normal.
You should know that 54% of show tickets are sold outside Montreal, which is huge when you know that megaconcerts are only counted in Montreal and Quebec City in the large amphitheaters capable of hosting them.
The vitality of the industry therefore contributes to the economic vitality of the regions because it fuels a large number of businesses and activities related to the holding of shows.
The end of the crisis foreshadowed a new start, but this could be slowed down by the darkening of the economic context over the coming months, a situation that industry players fear.
Inflation and rising interest rates affect discretionary spending. When everything goes up, you think more about paying your rent and your groceries than spending money to go see a show.
Jean-François Renaud, president of ADISQ
“And when a crisis occurs, risk taking is also affected. Many producers will be more cautious about embarking on new projects if the situation deteriorates, ”says Jean-François Renaud.
Which is a shame. Cultural industries play an important role in Quebec’s economic life. Twenty years ago, they represented 5.1% of GDP, a contribution that fell to 4% in 2019.
Twenty years ago, the Quebec government’s spending on culture represented 1.6% of its total spending, a proportion that fell to 0.9% in 2019. There, as in many essential sectors where we seek to correct the mistakes of the past, there would be some catching up to do.