PESTEL analysis is a framework used to evaluate the macro-environmental factors that can affect an industry. In this case, we will apply PESTEL analysis to the entertainment industry, which includes film, television, music, and other forms of entertainment.

Political Factors

Political stability is very important for the entertainment industry. As it is one of the major sources of revenue for many countries like India. Tax policies have a major impact on the industry because it is mostly applicable on large-scale shows, celebrity or sponsors stage shows, festivals, etc. The entertainment industry is not only television or film shows, it includes amusement parks, theatre, horse racing, exhibitions etc. Hence the government plays an important role in this. It is the government who will decide what entertainment facilities to provide to the public and that what will be the prices and taxes. Factors like trade barriers, intellectual property protection, taxation and environmental protection are the political factors that affect this industry to a greater extent (Mishra, 2021).

Economic Factors

This plays a vital role in the entertainment industry. As economic factors like inflation, employment rate, income distribution, GDP growth, demographics etc have a great impact on the revenues of the entertainment industry. People with higher disposable income tend to spend more on entertainment because of their greater spending power. People in developing countries are price sensitive, as they prefer to spend less on entertainment. However, India has one of the best media industries in terms of films and theatres, yet it needs to grow more in the children’ genre as it has a huge population of youth (Fernfort university, 2021).

Social Factors

The entertainment industry is highly dependent on the audience, as most people spend their time on social media or television even while working. People watch dramas, play games, watch other influencers‘ life, and whatnot. The entertainment industry is somehow shaping our social culture, for example, posting the daily routine on Snapchat is necessary or else followers will start consuming the content of other influencers. What we are watching in dramas, subconsciously we try to act on it in our daily lives. Any awareness needs to be created through social media and television. Our society is being dictated by the entertainment industry directly or indirectly (MBA Skool, 2021).

Technological Factors

Technology and the entertainment industry are inseparable things. From black and white television to colourful visuals our media industry is dominated by technology. It has redefined the products, cost structures and distribution. The growing use of digital media has forced companies across the globe to invest more in technological advancement and put it in their core strategies. The increasing use of technology will reshape the future content creators, as high internet access will become a necessity, and it will be able to connect mass audiences than ever before (Mishra, 2021).

Environmental Factors

The entertainment industry has affected the environment to some extent. As we discussed above, the entertainment industry includes all sorts of leisure activities like amusement parks, media etc, making amusement parks with rides can destroy the environment to some extent. The pollution caused because of transportation that will be used by people to reach to the park cause great damage. However, media is used for educating people to protect the environment as much as possible so that a mass audience can hear and implement the message (Fernfort University, 2021).

Legal Factors

There are laws and regulations implied in the entertainment industry which are strict. Companies have the right to buy copyrights and patents to protect their content and violation of these may cause a huge sum of fines. Moreover, taxation policies are very strict. Everything will be as per the contract and agreement. Every person will be hired according to the agreement. There is a legal body in every economy to protect the entertainment industry of the country (MBA Skool, 2021).

Conclusion

The entertainment industry is growing exponentially around the world because of COVID-19. People are greatly dependent on the media and electronic entertainment channels. This PESTEL analysis has given deep insights into the industry, however, the kids’ genre in terms of cartoons and films needs to grow, especially in India as it is the largest media industry.

References

• FernFort university, 2021. Entertainment one PESTEL and Environmental analysis. [Online], Available at: http://fernfortuniversity.com/term-papers/pestel/nyse4/6770-entertainment-one-ltd-.php,  [Accessed on: 19th June, 2021].
• MBA Skool, 2021. 21st Century Fox PESTEL analysis. [Online], Available at: https://www.mbaskool.com/pestle-analysis/companies/18139-21st-century-fox.html, [Accessed on: 19th June, 2021].
• Mishra, P. 2021. PESTEL Analysis of the Entertainment industry. [Online], Available at: https://docuri.com/download/pestel-analysis-of-entertainment-industry_59c1cf22f581710b2863ba27_pdf., [Accessed on: 19th June, 2021].