i4cp’s October 15th Total Rewards Action Call featured a revealing look at the tremendous toll the pandemic has taken on the motion picture industry. Call facilitator Mark Englizian interviewed guests Assad Mallick, Vice President and Head of Total Rewards at Cineplex, and Jamie Chung, Senior Vice President of HR Operations and Total Rewards for Sony Pictures.
Key takeaways from the call:
- Business impact at Sony affects revenue streams. Inability to release major motion pictures in theaters because of the coronavirus has a tremendous negative impact on bottom lines, says Chung. However, she says, her company has been able to find alternate revenue streams and alternate ways to distribute content and manage work.
Those capabilities have enabled Sony to lessen the impact on its workforce. Further, the company has seen heightened demand for content from streaming platforms such as Netflix, Amazon, and Hulu. While revenues from such alternative distribution channels don’t match those of theatrical releases, they have done quite well, Chung says.
- Canada’s Cineplex saw profitability decline and an acquisition cancelled. Cineplex is Canada’s leading film distribution and cinema operation firm with 75% of the country’s market. Mallick calls the negative fallout from the pandemic on his organization “cataclysmic.” A recent report confirmed that 95% of the company’s revenues had dropped, adversely affecting revenue, profitability and EBITA.
Further, the pandemic interrupted, and subsequently cancelled, an acquisition of Cineplex by the UK-based Cineworld, owner of Regal Cinemas. Legal ramifications of that cancellation have further challenged the company.
- Leadership teams have been called on to stretch. Chung says that the pandemic has called for leaders to become more creative in thinking through priorities. At Sony, theater closures and production shut-downs challenged leaders to re-think how the company could create its products. In part, that meant working with state and local authorities to understand safety measures and then determining how new film content could be shot safely. She credits the company’s leadership with pivoting quickly to get things moving in the short term, then begin working on plans for longer-term solutions to drive operations.
At Cineplex, says Mallick, leaders have donned several hats, becoming “super responsive, less emotional, and more understanding with people.” Quick pivots by the company’s leaders were required when the Canadian government mandated business closures to control coronavirus spread, necessitating significant layoffs of Cineplex employees. However, government assistance programs have provided some financial support for employers to supplement wages and facilities rents.
- Diversify and take things a day at a time. The ability to offer diversified products during a time when their organizations’ main revenue-producing operations could not be pursued has enabled both Sony and Cineplex to stay the course.
Mallick says Cineplex primarily relies on cinema distribution for its business, but during the pandemic, has gone into other venues, including: Location-based entertainment, or rec rooms, across Canada; a media division, Cineplex Media; and Dallas-based P1AG, housing amusement and gaming facilities. Further, a Cineplex App is engineered into some televisions sold in Canada and enables movie screening at home. Finally, Cineplex popcorn, drinks, and snacks are sold through Uber Eats.
In addition to its film division that focuses on creating motion pictures, Sony has a business line that creates television content. At present, that also includes production of shows for streaming platforms. The company also owns content libraries of older television shows and films. Its distribution arm sells that content globally for various platforms.
Also on today’s call
- An instant poll during the call asked attendees about the extent to which their organizations had been impacted financially by the pandemic. Responses to the five options offered:
12% Severely, we are in survival mode
24% Moderate impact, jobs lost
28% Some impact, belts tightened
32% Little impact
4% No impact
The recording of the session and its full range of discussion topics is available at i4cp’s Employer Resource Center.Read here