PART 2 continued from part 1 Click here

Education:

Most schools and colleges are going to shift to online classes at least for the next 3-4 months. But there are challenges especially for younger kids. One of the responsibilities of the school teachers is to educate the given subject, but the other tasks are to educate values, to monitor and discipline them. How does that happen? The schools may have to have a hybrid formula for teaching. Some sessions in school, some online. How about examinations? Cheating might be easier in online examination of descriptive nature. The students may simply put several books under or behind the laptop while typing the answers. The students may use a virtual screen. Their friends may look at the questions and provide answers from books. Not a lot of them will do that, but the probability exists. A new idea could be to shift to open book tests. The questions will have to involve thinking on the part of the students. But they can refer to any book / internet and think and type their answers. It will inculcate deep thinking and shift the focus of education from memorizing to understanding of the subject. It will also do away with the over-emphasis on marks.

Colleges will have online sessions but the older professors need to be smart enough to control the younger tech savvy students. They may do so by appointing some younger tech masters in each class. A joke goes that an old professor asked the students about how to a certain things and the students told him to press Alt+F4, closing the session altogether.

Professional trainers will have to shift to online training since the companies are expecting work from home for their staff for the next two years or so. Hobby classes such as music academy etc will not be affected since they have a smaller ratio of students to teacher. In some cases the ratio is larger, but they can move online as well. Online educators in general, will laugh all the way to the bank!

Meeting providers:

The other category of businesses that is smiling is online meeting providers such as zoom. As more meetings shift online, I think there will be more providers with some additional demands for security from companies. Colleges may establish their own portals for classes and there might be cut throat competition in providers of such services as many companies may shift to this business. Still it will remain a lucrative business in the years to come.

Entertainment Industry:

As people work from home, they may find more time to watch films, plays etc online. Afterall, they spent 2 hours each day on commuting on an average. Now companies may give more work, but still leave them at least 1~1.5 hours extra per day for family / entertainment/ hobbies.

Film Industry:

Will be affected to a large extent as cineplexes may not open soon and even if they do, they may have to sell reduced seats due to social distancing. (like airlines). They may sell only 60- 70% seats (Families sit together, so they may not have all the alternate seats vacant!). They may not hike the price a lot since the demand supply ratio would work against that hike.

So what could they do? They too can go the airline way. Ticketing will move more towards online as people do not want to touch tickets, number of ushers will reduce and they may install automated gates. They can think of having more shows due to less # of seats for a popular launch such as Tenets of Christopher Nolan expected in 3 rd week of July 2020.

(Even that may be postponed if the post production work has been halted due to Covid)

OTT platforms & TV shows will gain a lot since we can see a large movement towards them due to health concerns. The future of Theatre plays, Circuses, Magic shows will not be so good as people will not flock to theatres / halls and government may not allow large gathering. They too can move to OTT and save themselves. But then what is the difference in a play and a movie? A play might even be recorded like a film over many takes, so lose its attraction as a play!

What will be interesting to see is Film shooting. How will this happen? Will they be able to take Physical Distancing seriously? The cast and crew will need more time to get accepted in the studio as per new check-ups. Since actors have VIP status, they may have a separate entrance to studios, but they still need to be examined. How about intimate scenes?

Shooting these may require the actors to be medically examined each day. An additional medical officer on the set might be an additional cost for the films. If the film is set in present time, we may need the actors to put on a mask? They have to show their acting only through eyes. A lovely dimple on the face might have to be hidden behind a mask. If an actress did not have acting talent and solely relied on that dimple, she may not get roles in new films while the masks are mandatory. But films set in earlier periods won’t be possible with masks, so their filming may be merely postponed.

Since we saw several movies made on World War II, will there by many movies made on Covid? For a while yes, but WW had a lot of scope for drama as characters faced situations with a larger conflict and even varied conflicts. Here the conflict is not that grave and one of the drama types could be about families & their relationships, kids and parents reconciling, as well as couples breaking up or deciding to reunite etc. The other drama type could be poor workers suffering during lockdown and trying to reach home and what all difficulties they face etc., or how they turn to crime due to the crisis, how the underworld operated during the lockdown, story of a thief and how he stole despite the lockdown etc, the conspiracy theories about the spread of virus etc. These are some of the plot ideas and the brilliant minds of script writers may come up with more topics, still I do not see as many topics out of Covid as we had about WW2.

Another loser due to Covid is the Film Festival fraternity. They may not host a festival for a while. Some large # of festivals have chosen to collaborate and go online. We Are One Film Festival is presently available on Youtube. (But they have curated mostly older films, perhaps due to budget constraints &/or due to the unwillingness of the producers to go online) But people who always preached watching films only on large screens with great sound systems may have to wait longer for the traditional film festivals.

Telecom sector will remain neutral. While more calls happened during the lockdown, most of the users had shifted to fixed rentals and unlimited calls, so per user revenue may not be affected much. Staying at home meant use of more wifi and data consumption on phone data packs reduced. Still not all the users had unlimited calls & almost unlimited data. Hence they may see some organic growth.

Automobiles:

The sale of automobiles will be affected as people can postpone buying a new car by another 1-2 years. The spare parts or servicing industry will be affected as well since the reduction in use of vehicles due to work from home etc would mean that the wear and tear reduces for personal automobiles. It will be partially offset by using the same cars a few extra years. Same way for petroleum sector as they will have less demand and that would continue to put pressure on oil prices.

PCs & Mobile Handsets:

People may delay buying automobiles since they are sturdy for lasting more # of years, but if their PC needs to be upgraded, they cannot wait too long. So the sales of computers and phones won’t be affected much.

Pharma & Personal Hygiene industry is the biggest beneficiary of Covid. They will continue to make money for a long time till the vaccine would hit the market sometime and its patenting company becomes the sole beneficiary. Still companies producing masks, sanitizers, soaps etc will have a surge in sales. I know of many versatile manufacturers who shifted to making/ trading masks during the last few months.

Manufacturing is another sector which has mixed issues. If they modernize and use robots, their product may be produced without worrying about the processes for health etc. If they do that, some more workers might be laid off. In countries such as India, where the labour laws won’t allow that, this may not be feasible. Countries with employer friendly labour policies may gain!

So a mixed economy model might work better where the employers pay reduced salaries to employees for the idle period and normal salaries afterwards, but they work extra hours after factory reopens since they did not work for 3 months during the lockdown. But if the product does not have demand in the market, this approach may not work as well. India may have to alter rigid old labour policies or open more SEZs for manufacturing, as they expect a large shift of companies from China to India due to the current anger about China in the World. Mainly American and Japanese companies are expected to shift to India over the next 3-5 years.

Real estate:

A bigger casualty of the crisis is the Real estate sector. As more offices discover that they can ask their employees to work from home, they may reduce space, or give up large sections of their rental property. New buyers may postpone decision due to the slowdown. Thus there will be an abundant supply and less demand. The property market (new sales) shall have price reduction and thus, even resale market will have price reduction. Some individuals with large mortgage may downgrade their flats & move to smaller flat to enable payments of EMIs. So the price correction in smaller flats will be less than the one for larger apartments.

The office rental market will have oversupply and prices may crash. The residential rental market may remain unaffected since the supply (people wanting to rent) is not likely to increase, (unless builders themselves shift to renting their unsold units), while the demand may increase but will be offset by some individuals starting the trend of paying guests inside their homes. (renting a single room in their flats to earn some rent and pay EMIs)

The retail property sales will be affected and prices will go down. The retail rental prices will also go down. Before Covid, some of the rentals were so high that I have seen many restaurants/shops change hands every year or so. There may be very few takers for such high rental retail properties.

Shared office space industry: Less affected than retail space rentals. Some smaller offices may move to shared office space while shared office users may move their offices to their homes and convert some rooms at home as offices. If the business is run by the landlords themselves, (who do not have mortgage), they would find it easier to survive. Those renting property and sub-renting it out as shared office space may face challenges.

Clothes and accessories:

The business of clothes and accessories will get affected for a while since people reduce outdoor meetings. So will the sales of perfumes, ladies’ handbags etc as people do not go out much. These companies may have clearance sales and reduce inventory /old stock. But new production will reduce. The companies which were contract manufacturers for these will be affected. Still, the brands will continue to charge a brand- premium and are unlikely to reduce prices.

Publishing industry and book shops:

Another casualty is the publishing industry and book shops. As people sat at home during lockdowns and circuit breakers, and read many books online, they got used to kindle and e- copies. So, e-copy sales may go up, but the sale of printed copies may go down. Kindle(hardware) sales may go up for a while as newer readers shift to it. The printing industry and allied products (ink, paper etc) will have a challenge for the next couple of years. The environmentalists will be happier since less # of trees will be cut going forward.

Seasonal products:

The sales of seasonal products such as umbrellas, suncaps, sun lotions, sunglasses and sweaters may face challenge as the movement reduces. Summer is over and the suncaps, sun lotions & sunglasses industry has already faced challenge of no sales for 2 almost months. The rainy season may have impact on umbrellas and raincoats. But it will be reduced. The saving grace for them would be kids, who grow in size and need a new raincoat /sweater each year.

Manufacturers of Public Transport Units:

Manufacturers of Aircrafts such as Boeing and Airbus will find it tough due to their clients facing the downturn. Manufacturers of trains or buses will follow suit. But since existing units would run longer, they may make money via sales of spares and services of repairs (annual maintenance contracts) etc

Religion

I included it here since it has become a business for some and also it gets a substantially larger share of cash flow of the system. Temples, mosques, churches & other religious centres will be affected as they had to remain shut longer and will have less donations due to the recession. What they must do is to open their purses and use their savings on social causes such as spending on hospitals or feeding the poors.

Sports

Another industry which will suffer! Many of them say that they find it better when the spectators throng the stadia and cheer for their teams. The governments may put restrictions on # of viewers in a stadium. Team sports where the home teams have an advantage usually will still have home advantage due to familiar conditions and grounds, but the advantage due to the crowd support will get reduced. The athletes will come back to their former fitness level within a couple of months. But they may not be allowed to have a huddle, or group exercise where they touch each other. I believe that this should be allowed as it is an important part of the game. Celebrations after scoring a goal etc can be muted, but the team huddles where strategies are discussed are a necessary part of the game. Afterall, the players would be tested prior to each game and may even be quarantined in the new country when they tour, so why not allow the strategic gathering in the middle of the ground? The broadcasting corporations will stand to gain as the crowd from the stadia will shift to TV. But revenue will remain affected due to downturn.

Coaching will be affected with physical distancing in sports such as cricket or tennis, where the coach often needs to hold hands of the younger players to teach a particular shot. With online coaching, players from smaller towns may find it better to stay at home and get groomed by a coach from another city (even overseas), with no additional expenditure of lodging and boarding in the town of the coach. And perhaps meet the coach once in 3 or 6 months by visiting his town. So the players from smaller towns stand to benefit. All the above are predictions and like forecasting, may go wrong. But at least they are logical at the time of writing! I would be happier if I am proven wrong and the world moves back to normalcy of 2019 quicker than 2021.

–Prasad Sovani