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PLSN/FOH Covid-19 Entertainment Technology Economic Impact Survey

PLSN Staff • News • April 18, 2020

LAS VEGAS — Timeless Communications, publishers of Projection, Lights & Staging News and FRONT of HOUSE magazines, conducted the PLSN/FOH Covid-19 Entertainment Technology Economic Impact Survey from April 13-16. The survey provides a mid-April 2020 snapshot of an industry in financial free fall, with a very small percentage of survey respondents able to secure a safety net so far despite the government’s passage of the $2.2 trillion CARES Act.

METHODOLOGY

Our methodology for this survey was to send it to PLSN and FOH subscribers. Later, we opened the survey up to others by posting in industry-oriented Facebook pages. In total, 3,653 individuals initiated the survey while 3,114 completed the entire survey.

The survey divided respondents into three groups: Business owners, W2 wage earners and 1099 freelancers. A W2 employee receives a regular wage and employee benefit. 1099 employees are self-employed independent contractors. They receive pay in accord with the terms of their contract and get a 1099 form to report income on their tax return. After the first questions, the rest of the survey was customized depending on which of these three groups the respondent belonged to.

KEY FINDINGS FROM BUSINESS OWNERS

Unemployment in the entertainment technology industry is at an all-time high

Of the 833 business owners who took the survey, only 5.75% stated they have been able to keep all their employees on their payroll. Nearly half — 47.6% — indicated they were unable to keep any employees on their payroll.

Employers went on to indicate that they expect further reductions in staff in the next 30-day period. 35.17% indicated they would be making further cuts to their remaining employees. This is not surprising, considering that more than three in four of the employer respondents — 76.26% — were facing a 100 percent reduction in their cash flow. Only 3.08% of employers indicated they had been able to keep 100% of their existing cash flow.

Some companies are reinventing themselves to stem the tide

More than one in five — 22.75% — of entertainment technology employers in the survey indicated that they have introduced new services to partially make up for their lost revenues. Some of these new cash flow streams include: live streaming studio, web design, outdoor/landscape AV installation, consumer electronics repair, warehousing and virtual events.

PPP loan obstacles loom large

The $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (H.R. 748), also known as the CARES Act, includes the $349 billion Paycheck Protection Program (PPP) for small businesses with funds available for loans originated from Feb. 15 through June 30, 2020. And most of the employer respondents — 59.78% — had applied for a PPP loan by mid-April. But many have also found the process to be quite difficult, with respondents citing significant application processing delays with major banks including Wells Fargo and Bank of America, among others. Only 48.65% reported being able to use the bank that they had an existing banking relationship with. As of the survey’s mid-April snapshot, only 12.6% of business owner respondents reported success in securing a PPP loan under the CARES Act, and only 3.94% stated that their loan had been funded.

LOOKING AHEAD

If there is one bright spot in the survey only 16.69% of the company owners questioned stated that they foresee the need to file bankruptcy in the near future. However, 76.94% of these same business owners indicated they feel the survival of their company was in jeopardy because of the Covid-19 pandemic.

BY THE NUMBERS: BUSINESS OWNERS

Key results from business owners indicated the following:

  • 76.26% reported they had lost 100% of their existing cash flow streams
  • Only 3.08% of companies reported being able to keep all their employees on their payroll
  • 47.6% reported they been able to keep none of their employees on their payroll
  • 35.17% reported they see the need for further staff reductions in the next 30 days
  • 48.65% of the companies reported that their existing banking relationship was able to help them apply for a PPP loan
  • As of mid-April, 88.4% reported that they had not yet been approved for a PPP loan
  • Only 3.94% reported their PPP loan had been funded
  • More than three in four business owners — 76.94% —believe the Covid-19 pandemic is putting their company in jeopardy.

KEY FINDINGS FROM W2 EMPLOYEE RESPONDENTS OWNERS

The pool of total respondents included 1,485 who identified themselves as W2 employees, and 43.2% (642) of them have reported losing their job. Few, moreover, expect conditions to quickly return to normal in the live event sector. 71.06 responded that they do not believe they will be called back in the next 30-day period. Nearly all of the laid-off individuals (626) have applied for unemployment benefits. Close to half (49.48 percent) also believe they will be qualifying for some of the provisions as provided in the recently passed CARES Act. Most — but only 67.03%, or about two in three — stated they had enough funds to pay their rent or mortgage payment for the next 30 to 60 days. On a brighter note, only 8.15 percent stated that they had lost health care coverage as a result of the pandemic. But significantly more — 21.42 percent — noted they feel they will be losing their health coverage in the future.

BY THE NUMBERS: W2 EMPLOYEES

  • 43.2% of W2 employee respondents have reported losing their job.
  • 46.53% are currently working from home
  • 71.06% do not believe they will be recalled in the next 30 days
  • 42.16% have applied for unemployment benefits
  • 49.48% believe they qualify for benefits under the CARES Act
  • 42.96% feel they only have enough money to pay their rent/mortgage for the next 30 to 60 days
  • 8.15% say they have lost their healthcare because of the pandemic
  • 21.42% say they expect to be losing their health care in the foreseeable future

KEY FINDINGS FROM FREELANCE (1099) RESPONDENTS

The impact of the Covid-19 pandemic on the 956 respondents who work on a freelance basis and report their income with 1099 forms is the bleakest segment of all, with 97.31% stating they have lost their jobs. (That compares to only 43.2% of W2 wage-earning workers.) 92.67% of the 1099-filing freelancers, moreover, stated they see very little hope of being recalled in the next 30 days. A greater percentage of 1099 workers — 57.37% — have already filed for unemployment.

Of the 1099 workers responding, 47.47 percent feel they only have enough money to pay their rent or mortgage for the next 30 to 60 days (compared to 42.96% of W2 wage earners). In terms of those reporting loss of health care coverage, 1099 freelancer are about on par with W2 employees (6.03% vs. 8.15%), and 21% of both groups foresee a loss of coverage to be likely in the foreseeable future.

BY THE NUMBERS: 1099 WORKERS (FREELANCERS)

  • 97.31% stated they have lost their 1099 job(s) because of the pandemic
  • 23.76% are currently working from home
  • 92.67% do not believe they will be recalled in the next 30 days
  • 57.37% have applied for unemployment benefits
  • 53.83% believe they qualify for benefits under the CARES act
  • 47.47% feel they only have enough money to pay their rent/mortgage for the next 30-60 days
  • 6.03% say they have lost their health care because of the pandemic
  • 21.02% say they will be losing their healthcare in the foreseeable future

THE COMMENT SECTION

The survey invited individuals to comment on their situations, providing anecdotal insights in addition to the overall survey findings. In all, there were a total of 685 comments left by participants in the survey. Here are a few samples, some submitted anonymously and others including the survey participant’s names.

“I lost three months of scheduled work in the span of about 72 hours, with no restart in sight. I had to find work outside of my industry, the industry I have worked in full-time as an independent, self-employed successful-enough freelancer for the last eight years.” —Max Sjoberg

“I’m one of many who cannot seem to get paid unemployment insurance. There’s a holdup of unknown resolution. I can’t get through to ask or expedite. So, for the last month, I have zero income, even though my claims go through.”

“My name is Mike Mahoney. I am a lighting and scenic designer out of the Chicago area. My company name is Mahoney Design Inc. It’s an S corporation. I do all my work as an independent contractor, on a job-by-job basis. I have not worked since March 3, 2020. I have tried several forms of help through the IDS and my local banks. Still nothing. If this goes any longer than two months, I will be in serious trouble.”

“It has dramatically changed the future of our industry forever. Once-packed convention halls will now be switched to virtual live streams. Live entertainment will take months, if not years, to bounce back. An industry I once thought was untouchable — we were the relief to bad times — and now we are looking out asking, who is the relief for us?” —Jamie Vitullo, 4Wall Entertainment

“The industry is dead. My company is dead, and now we are seeing reports that large events won’t return until late next year. How are we supposed to survive that? I’ve been doing this as a career for 20 years.”

“Between being a W2 and 1099 hybrid, the government doesn’t know what to do with me or how to help. While my income looks large, it ends up being rather small due to the amount of insurance and business costs I regularly incur. The government doesn’t take any of these things into account when determining who needs aid. Also, I’m seeing employers who have W2’d me, giving the wrong start dates to the government (dates are off by years) which is affecting my eligibility…I’ve paid into the system for years, and I’m not getting help when I need it the most.” —Gretchen Adickes, independent contractor (lighting)

 

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