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INDUSTRY REPORT 71
Arts, Entertainment and Recreation in the US
Thrills and chills: Revenue is expected to recover as sector establishments have been permitted to reopen
Thi Le | September 2021
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Contents COVID-19 (Coronavirus) Impact Update.............................3
ABOUT THIS INDUSTRY.................................. 5
Industry Definition................................................................5 Major Players...................................................................... 5 Main Activities..................................................................... 5 Supply Chain....................................................................... 6
INDUSTRY AT A GLANCE................................ 7
Executive Summary............................................................ 9
INDUSTRY PERFORMANCE.......................... 10
Key External Drivers.........................................................10 Current Performance........................................................ 11
INDUSTRY OUTLOOK.................................... 14
Outlook.............................................................................. 14 Industry Life Cycle............................................................. 15
PRODUCTS & MARKETS............................... 16
Supply Chain..................................................................... 16 Products & Services.......................................................... 16 Demand Determinants...................................................... 18 Major Markets....................................................................18 Business Locations........................................................... 20
COMPETITIVE LANDSCAPE.......................... 22
Market Share Concentration............................................. 22 Key Success Factors........................................................22 Cost Structure Benchmarks............................................. 23 Basis of Competition......................................................... 26 Barriers to Entry............................................................... 27 Industry Globalization........................................................ 27
MAJOR COMPANIES...................................... 28
Major Players.................................................................... 28
OPERATING CONDITIONS............................ 35
Capital Intensity................................................................. 35 Technology & Systems......................................................36 Revenue Volatility..............................................................37 Regulation & Policy........................................................... 37 Industry Assistance........................................................... 38
KEY STATISTICS............................................ 40
Industry Data..................................................................... 40 Annual Change..................................................................40 Key Ratios......................................................................... 40
ADDITIONAL RESOURCES............................ 41
Additional Resources........................................................ 41 Industry Jargon..................................................................41 Glossary............................................................................ 41
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COVID-19 (Coronavirus) Impact Update
IBISWorld's analysts constantly monitor the industry impacts of current events in real-time – here is an update of how this industry is likely to be impacted as a result of the global COVID-19 pandemic:
• Operators in the Arts, Entertainment and Recreation sector experienced revenue declines in 2020 due to the closure of nonessential businesses as a result of the COVID-19 (coronavirus) pandemic. However, sector revenue will likely rebound in 2021 as the economy begins to reopen.
• To stay afloat, many sector operators have furloughed workers to cut costs. As a result, sector profit, measured as earnings before interest and taxes, is anticipated to decline over the five years to 2021.
• Since all arts, entertainment and sports events have been canceled or postponed as an effort to curb the spread of virus, many operators in the Gym, Health and Fitness Clubs industry, the Museums industry, the Sports Franchises industry and Concert and Event Promotion industry have introduced online offerings, such as virtual tours, online classes and streaming services.
Note: The content in this report is currently being updated to reflect the trends outlined above.
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About IBISWorld IBISWorld specializes in industry research with coverage on thousands of global industries. Our comprehensive data and in-depth analysis help businesses of all types gain quick and actionable insights on industries around the world. Busy professionals can spend less time researching and preparing for meetings, and more time focused on making strategic business decisions that benefit you, your company and your clients. We offer research on industries in the US, Canada, Australia, New Zealand, Germany, the UK, Ireland, China and Mexico, as well as industries that are truly global in nature.
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About This Industry Industry Definition The Arts, Entertainment and Recreation sector includes a range of enterprises and organizations that operate
establishments or provide services to satisfy the various recreational, entertainment and cultural interests of consumers. Such subsegments include performing artists, spectator sports, museums, historical sites, amusement parks and gambling industries.
Major Players New York State Lottery Disney
Live Nation Worldwide Inc.
Fitness International LLC
Smithsonian Institution
NPS
Main Activities The primary activities of this industry are:
Performing arts companies
Spectator sports
Promoters of performing arts, sports and similar events
Agents and managers for artists, athletes, entertainers and other public figures
Independent artists, writers and performers
Museums, historical sites and similar institutions
Amusement parks and arcades
Gambling industries
Other amusement and recreation industries
The major products and services in this industry are:
Performing arts companies
Spectator sports
Promoters of performing arts, sports and similar events
Independent artists, writers and performers
Museums, historical sites and similar institutions
Amusement parks and arcades
Gambling industries
Other
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Supply Chain
SIMILAR INDUSTRIES
Utilities in the US Information in the US Educational Services in the US Accommodation and Food Services in the US
RELATED INTERNATIONAL INDUSTRIES
Gym, Health & Fitness Clubs in China
Amusement Parks in China
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Industry at a Glance Key Statistics
$275.5bn Revenue
Annual Growth
2016–2021
-2.3%
Annual Growth
2021–2026
4.5%
Annual Growth
2016–2026
$17.9bn Profit
Annual Growth
2016–2021
-4.8%
Annual Growth
2016–2021
6.5% Profit Margin
Annual Growth
2016–2021
-0.9pp
Annual Growth
2016–2021
2m Businesses
Annual Growth
2016–2021
1.6%
Annual Growth
2021–2026
3.2%
Annual Growth
2016–2026
4m Employment
Annual Growth
2016–2021
-0.4%
Annual Growth
2021–2026
3.7%
Annual Growth
2016–2026
$96.8bn Wages
Annual Growth
2016–2021
-0.9%
Annual Growth
2021–2026
3.9%
Annual Growth
2016–2026
Key External Drivers % = 2016–21 Annual Growth
2.3% Consumer confidence index
3.0% Per capita disposable income
0.3% Number of adults aged 20 to 64
-4.2% Domestic trips by US residents
-18.3% Inbound trips by non-US residents
0.6% Time spent on leisure and sports
Industry Structure
POSITIVE IMPACT
Life Cycle Growth
Concentration Low
MIXED IMPACT
Capital Intensity Medium
Industry Assistance Medium / Increasing
Regulation & Policy Medium / Increasing
Technology Change Medium
Barriers to Entry Medium / Steady
Industry Globalization Medium / Steady
NEGATIVE IMPACT
Revenue Volatility Very High
Competition High / Steady
Key Trends
To the sector's benefit, time spent on leisure and sports has marginally increased
The Amusement Parks and Arcades and Gambling subsectors have experienced consistent growth prior to the pandemic
The number of sector operators has expanded over the past five years
Sector demand generally follows trends in the macroeconomic climate and available leisure time
The number of domestic trips by US residents is anticipated to rebound to the benefit of the sector
Growth in the number of sector establishments will likely cause sector employment and wages to expand
Sector revenue is highly dependent upon available levels of household incomes
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Products & Services Segmentation
Major Players SWOT
STRENGTHS
Low Customer Class Concentration
Low Product/Service Concentration
WEAKNESSES
Low Profit vs. Sector Average
Low Revenue per Employee
High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2021-2026)
High Performance Drivers
THREATS
Low Revenue Growth (2005-2021)
Low Revenue Growth (2016-2021)
Low Outlier Growth
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Executive Summary Thrills and chills: Revenue is expected to recover as sector establishments have been permitted to reopen
The Arts, Entertainment and Recreation sector comprises nine different subsectors of the US economy, from performing arts companies to gambling industries. The enterprises and organizations within this sector operate establishments or provide services to satisfy the diverse recreational, cultural and entertainment needs of US consumers and foreign visitors. Since the experiences provided by operators in this sector are considered discretionary, sector revenue is highly dependent upon available levels of household incomes, discretionary spending and leisure time. Prior to the COVID-19 (coronavirus) pandemic, the sector benefited from growth in per capita disposable income and consumer spending. However, sector revenue is expected to take a hard hit by the outbreak, causing sector revenue to decline 36.4% in 2020 alone. Ultimately, IBISWorld expects sector revenue to fall an annualized 2.3% to $275.5 billion over the five years to 2021, including an anticipated 24.6% recovery in 2021.
In addition to being sensitive to macroeconomic drivers, the sector is reliant on demographic trends. Nearly 90.0% of demand for arts, entertainment and recreation stemming from consumers between the ages of 18 and 64, and as a result, demand generally trends in line with growth in this consumer segment. The number of adults aged 20 to 64 has increased at an annualized rate of 0.1% over the five years to 2021, creating higher demand from the sector's primary consumer pool. Nevertheless, the detriment of the unprecedented pandemic has outpaced this growth as sector establishments were required to temporarily shut down in March 2020 to curb the spread of coronavirus. Consequently, sector profit trended down over the past five years.
Over the five years to 2026, revenue is expected to recover as sector establishments have been permitted to reopen, albeit at a limited capacity, since the pandemic has started to slow down. Per capita disposable income is expected to continue increasing over the next five years, enabling consumers to splurge more on discretionary recreational activities. Furthermore, the rates of travel growth by both US residents and foreigners are expected to rebound strongly, boosting sector demand from tourists. To the benefit of the sector, total recreation expenditure is expected to increase over the next five years, supporting revenue. As a result, sector revenue is expected to grow at an annualized rate of 4.5% to $343.1 billion over the five years to 2026.
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Industry Performance
Key External Drivers
Per capita disposable income
The establishments and service providers that operate in this sector supply experiences that are considered discretionary. Therefore, demand for this sector is sensitive to changes in the macroeconomic climate, particularly disposable income. In 2021, IBISWorld estimates that per capita disposable income will increase.
Inbound trips by non-US residents
Many foreign tourists visit the United States to experience the services provided by sector establishments. Most notably, international visitors seek out amusement parks, such as Disney World; museums, such as the Metropolitan Museum of Art; and gambling establishments, such as Las Vegas casinos. In 2021, the number of inbound trips by non-US residents is expected to increase.
Number of adults aged 20 to 64
Consumers between the ages of 18 and 64 represent nearly 90.0% of sector demand. Therefore, as the number of consumers in this age bracket expands, so too does sector demand. In 2021, IBISWorld estimates that the number of consumers aged 20 to 64 will increase marginally.
Domestic trips by US residents
Many subsectors, such as historical sites and gambling establishments, represent major tourist destinations, attracting US consumers from across the country. As a result, as US residents embark on more domestic travel, they become more likely to visit sector establishments, boosting revenue. In 2021, IBISWorld estimates that domestic trips by US residents will increase, representing a potential opportunity for the sector.
Consumer confidence index
Since demand for services provided by operators in this sector is highly discretionary, consumers' perception of the economic outlook will likely affect their decisions to spend on the sector's services. Consumers will likely spend more when they positively perceive their finances and employment prospects. In 2021, the Consumer Confidence Index is expected to increase.
Time spent on leisure and sports
Most of the experiences provided by operators in this sector are considered leisure or recreational activities.
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Therefore, the sector is highly sensitive to available consumer leisure time. In 2021, IBISWorld estimates that time spent on leisure and sports is expected to decrease, posing a potential threat to the sector.
Current Performance
The Arts, Entertainment and Recreation sector comprises establishments that provide services and experiences that fulfill the creative, cultural and leisure desires of US consumers and foreign visitors.
Some of the largest subsegments of this sector include spectator sports; independent artists, writers and performers; promoters of performing arts, sports and similar events; gambling industries and amusement parks and arcades. Consumer participation in sector activities is generally considered discretionary, leaving participating establishments sensitive to fluctuations in the macroeconomic climate. Prior to the COVID-19 (coronavirus) pandemic, the sector benefited from gains in per capita disposable income, enabling more consumers to splurge at sector establishments. However, in 2020, sector revenue is estimated to be pressured by the closure of nonessential businesses and shelter-in-place orders imposed by state governments at the start of the pandemic. As the pandemic subsides, industry demand is expected to recover in 2021. As a result, sector revenue has decreased an annualized 2.3% to $275.5 billion over the five years to 2021, including an increase of 24.6% in 2021 alone.
SECTOR DEMAND
The sector is dictated by changes in available consumer leisure time and travel levels.
Visits to sector establishments are not just discretionary with respect to money but are discretionary in terms of time. As a result, consumers cut back on visits to sector establishments when available leisure time is low. To the sector's benefit, time spent on leisure and sports has marginally increased over the past five years, boosting sector demand accordingly.
Moreover, the advent of online shopping for airfares has provided support for domestic trips during the current period. Nonetheless, there is a forecast decline in 2020, which diminishes growth for the overall period. In early 2020, the effect of the coronavirus outbreak domestically has been severe as a significant share of the population was placed under shelter-in-place orders. However, due to the mass immunization efforts, growth is expected to be at its highest in 2021. Nevertheless, domestic travel activities are yet to reach the pre-pandemic level. Overall, domestic trips by US residents have declined an annualized 4.9% over the five years to 2021, limiting demand for sector services.
According to data from the Las Vegas Visitors and Convention Authority, an estimated 14.0% of all Las Vegas visitors in 2019 were international tourists (latest data available). This indicates that the sector is reliant on
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international travel to sustain high levels of demand. However, due to the risks associated with the coronavirus outbreak, the United States has temporarily banned travels from China, Iran, the United Kingdom, the Republic of Ireland, Brazil, South Africa, India and the Schengen region in Europe. This restriction, in addition to plummeting consumer sentiment, weighed on international travel considerably, causing inbound trips by foreigners to fall substantially. In 2021, international travel is expected to recover, but the complications regarding the coronavirus pandemic in foreign countries are expected to continue pressuring industry demand. As both US and international consumers travel to visit sector establishments, declines in travel rates are anticipated to dampen establishment visits over the five years to 2021.
COVID-19
Accounting for the largest share of sector revenue, the spectator sports subsector is expected to contend with challenges stemming from the mass cancellations and suspensions of major sports events.
In March 2020, many state governments imposed a shelter-in-place order to restrict large gatherings, forcing operators in this subsector to either shut down or operate without spectators. As the COVID-19 restrictions are eased, some stadiums have started to accept spectators. Nonetheless, operators in the spectator sports subsector are expected to experience revenue declines from broadcasting deals, sponsorship contracts, match day ticket income and other spending during events.
Similarly, operators in the Musical Groups and Artists industry (IBISWorld report 71113), the Performers and Creative Artists industry (71151), the Concert and Event Promotion industry (71133), Celebrity and Sports Agents industry (71141) are anticipated to be adversely affected by the cancellations of major live events. Therefore, several relief funds, such as the Artist Relief Fund, Freelancers Relief Fund and Artist Relief Project have been launched to support artists affected by the coronavirus pandemic. Furthermore, some players in these industries have started to offer at-home live concert streaming services to raise donations.
The Amusement Parks and Arcades and Gambling subsectors have experienced consistent growth prior to the coronavirus pandemic. Establishments in these subsectors were temporarily closed in March 2020 as they fall within the nonessential business category. Thus, the Walt Disney Company, which is a prominent player in the Amusement Parks and Arcades subsector lost significant ticket sales amid the theme park closures period. Subsequently, to stay afloat, the company furloughed 120,000 workers. Likewise, Caesars Entertainment Corporation, which is a major player in the Gambling subsector, plans to furlough 90.0% of its current workforce. Nevertheless, these establishments have been permitted to reopen starting July and June, respectively.
Likewise, the coronavirus outbreak is expected to have symmetrical effects on the Golf Driving Ranges and Family Fun Centers industry (71399), the Golf Courses and Country Clubs industry (71391), the Ski and Snowboard Resorts industry (71392), the Marinas industry (71393), the Gym, Health and Fitness Clubs industry (71394) and the Bowling Centers industry (71395) as hands-on experience at physical locations plays an important role in determining demand for these industries. Therefore, demand for services provided by these industries is likely to be pressured not only by the anticipated decline in consumer income but also by the health concerns regarding the sharing of facilities at these industries' establishments.
SECTOR LANDSCAPE AND PROFIT
The number of sector operators has expanded at an annualized rate of 1.7% to 1.7 million businesses over the five years to 2021, primarily due to strong location expansions within the Gym, Health and Fitness Clubs industry (71394), the Concert and Event Promotion industry (71133), and Arcade, Food & Entertainment Complexes industry (71312).
Conversely, sector employment has declined an annualized 0.4% to 3.6 million workers over the five years to 2021. Moreover, according to the US Bureau of Labor Statistics, unemployment rates in the leisure and hospitality sectors reached 10.9% in June 2021 compared with 28.9% in June 2020 (latest data available).
Consequently, the Coronavirus Aid, Relief and Economic Security (CARES) Act is expected to help lessen the pressure that businesses have endured. However, as the initial fund quickly drained, in late April 2020, President Trump signed the US Paycheck Protection Program and Health Care Enhancement Act (PPP Enhancement Act), appropriating an extra $321.0 billion and $50.0 billion to the PPP program and Economic Injury Disaster Loan (EIDL) program, respectively. Due to the aforementioned reasons, sector profit, measured as earnings before interest and taxes, has contracted over the past five years, falling from 7.4% in 2016 to an estimated 6.5% in 2021.
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Historical Performance Data
Year Revenue
($m) IVA
($m) Establishments
(Units) Enterprises
(Units) Employment
(Units) Exports
($m) Imports
($m) Wages
($m)
Domestic Demand
($m)
Per Capita Disposable
Income ($)
2012 267,518 121,748 1,361,621 1,351,508 3,293,829 N/A N/A 87,773 N/A 39,782 2013 274,531 127,236 1,383,646 1,373,649 3,368,694 N/A N/A 88,527 N/A 39,002 2014 284,977 131,931 1,441,268 1,430,780 3,481,550 N/A N/A 92,604 N/A 40,308 2015 299,031 141,504 1,475,343 1,464,607 3,572,555 N/A N/A 97,247 N/A 41,684 2016 309,935 143,799 1,521,051 1,510,088 3,695,278 N/A N/A 101,337 N/A 42,208 2017 325,135 150,172 1,579,548 1,566,259 3,805,080 N/A N/A 103,027 N/A 43,233 2018 335,528 154,388 1,660,847 1,643,619 3,949,287 N/A N/A 105,736 N/A 44,552 2019 347,462 160,250 1,707,346 1,690,605 4,060,518 N/A N/A 110,911 N/A 45,302 2020 221,121 107,019 1,492,735 1,491,475 3,097,220 N/A N/A 81,795 N/A 47,768 2021 275,533 131,920 1,650,990 1,635,780 3,615,989 N/A N/A 96,781 N/A 49,531
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Industry Outlook Outlook Over the five years to 2026, IBISWorld expects that demand for the Arts,
Entertainment and Recreation sector will rebound strongly as external drivers that dampened revenue growth over the five years to 2021 will recover.
Due to the mass immunization efforts, the pandemic is expected to be contained in the coming years. As a result, sector revenue is expected to rise at an annualized rate of 4.5% to $343.1 billion over the five years to 2026.
POSITIVE EXTERNAL TRENDS
Due to the discretionary nature of the experiences offered by sector establishments, demand generally follows trends in the macroeconomic climate and available leisure time.
This indicates that as consumers have more free time and income to spend on entertainment and recreational experiences, they become more likely to splurge at sector establishments, benefiting sector revenue. IBISWorld expects economic indicators that drive disposable income levels to steadily strengthen during the outlook period, as fallout stemming from the COVID-19 (coronavirus) outbreak will likely be muted once a vaccine for the virus is created.
Per capita disposable income is expected to rise at an annualized rate of 2.5% over the five years to 2026, arming consumers with more discretionary funds to spend on activities such as concert tickets, rounds of golf, museum passes and lottery tickets. Furthermore, IBISWorld expects that time spent on leisure and sports will stagnate. As consumers return to work, they will have less free time to spare and visit stadiums, amusement parks and historical sites less frequently.
The number of domestic trips by US residents is anticipated to rebound at an annualized rate of 9.4% over the five years to 2026. The release of pent-up demand as the economy recovers will help boost industry demand during the outlook period. Similarly, the number of inbound trips by non-US residents is forecast to grow at an annualized rate of 22.7% over the five years to 2026. As major economies worldwide inevitably rebound from the global economic slowdown in 2020, more individuals are expected to be able to visit the United States. Collectively, growth in both domestic and international travel will likely put upward pressure on sector demand over the next five years.
SECTOR STRUCTURE
Strong gains in sector revenue over the next five years will likely encourage more enterprises to enter the sector and incumbent players to expand their establishment count.
As a result, IBISWorld estimates that the number of sector operators will rise at an annualized rate of 3.3% to 1.9 million companies over the five years to 2026. The Musical Groups and Artists industry (IBISWorld report 71113) and the Racing and Individual Sports industry (71121b) are expected to represent standout segments of the sector with respect to enterprise growth, with enterprise growth expected to grow between 3.0% and 4.0% for each industry. Conversely, the Bowling Centers industry (71395), Golf Courses and Country Clubs industry (71391), the
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Marinas industry (71393) are expected to experience more companies exiting the industry during the outlook period, with the number of industry operators expected to decline between 0.1% and 2.0% for each industry. These segments of the sector have been consistently achieving low revenue gains, encouraging low-performing and unprofitable players to curtail operations.
Growth in the number of sector establishments will likely cause sector employment and wages to expand as the sector hires new employees to work within new companies. As a result, sector wages are expected to rise an annualized 3.9% to $117.1 billion over the five years to 2026. Moreover, due to strong gains in revenue, IBISWorld expects that the sector profit, measured as earnings before interest and taxes, will revert to pre-crisis levels, accounting for 6.7% of revenue in 2026.
Performance Outlook Data
Year Revenue
($m) IVA
($m) Establishments
(Units) Enterprises
(Units) Employment
(Units) Exports
($m) Imports
($m) Wages
($m)
Domestic Demand
($m)
Per Capita Disposable Income ($)
2021 275,533 131,920 1,650,990 1,635,780 3,615,989 N/A N/A 96,781 N/A 49,531 2022 307,611 145,408 1,749,507 1,727,106 3,920,667 N/A N/A 105,558 N/A 48,558 2023 323,541 152,307 1,814,074 1,788,939 4,087,635 N/A N/A 110,248 N/A 50,300 2024 330,746 155,723 1,860,525 1,834,914 4,181,036 N/A N/A 112,754 N/A 52,110 2025 336,896 158,793 1,903,383 1,877,523 4,264,389 N/A N/A 114,972 N/A 54,044 2026 343,147 161,856 1,942,557 1,916,273 4,345,017 N/A N/A 117,137 N/A 56,056 2027 348,704 164,387 1,979,472 1,952,884 4,418,502 N/A N/A 119,102 N/A 57,528
Industry Life Cycle The life cycle stage of this industry is Growth LIFE CYCLE REASONS
SVA is expected to grow at a slower rate than the overall economy
General population growth leads to stable demand for the sector
Sector revenue is highly dependent on disposable income and consumer spending
The Arts, Entertainment and Recreation sector is in its growth life cycle stage because consumers continue to be interested in sector establishments as an enjoyable pastime. Sector value added (SVA), which measures a sector's contribution to the overall economy, is expected to grow at an annualized rate of 1.2% over the 10 years to 2026. Comparatively, the US GDP is anticipated to grow at an annualized rate of 2.3% during the same period. The sector is growing at a slower pace than the overall economy, which is indicative of a sector in the mature phase of its life cycle. However, other factors point out that the sector is in a growth stage.
The primary drivers of sector growth in recent years have been growth in per capita disposable income, recreation expenditures and population patterns. As a sector that provides discretionary experiences, demand is contingent upon available consumer funds and time. Specifically, travel rates and consumer spending have been favorable for most of the past five years before taking a hit in 2020, negatively affecting sector demand. The sector is sensitive to travel rates as many sector establishments pull crowds from far and wide, including international visitors. Las Vegas, for example, attributes an estimated 20.0% of visits to international visitors, marking the sector's reliance on strong tourism rates from overseas visitors.
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Products & Markets Supply Chain Key Buying Industries
1st Tier
Consumers in the US
Key Selling Industries 1st Tier
Real Estate and Rental and Leasing in the US
Wholesale Trade in the US
Janitorial Services in the US
2nd Tier
Construction in the US
Manufacturing in the US
Utilities in the US
Products & Services
SPECTATOR SPORTS
Spectator sports represent the largest subsector in the Arts, Entertainment and Recreation sector, accounting for an estimated 15.6% of revenue in 2021.
This segment includes professional, semiprofessional and amateur sports clubs that perform sporting events in front of an audience. This subsector includes the Sports Franchise industry (IBISWorld report 71121a) and the Racing and Individual Sports industry (71121b). Nevertheless, the spectator sports segment has still expanded as a share of the sector revenue over the past five years. In 2020, the cancellations and suspensions of major sports events at the beginning of the coronavirus outbreak are expected to dampen revenue generated from this segment. Moreover, although sports games are permitted to resume, at the early stage of reopening, operators in this subsector are expected to operate with a limited number or without spectators.
GAMBLING INDUSTRIES
Gambling industries represent a significant and stable share of revenue, accounting for an expected 11.7% of revenue in 2021.
This subsegment includes establishments that primarily operate gambling facilities, such as casinos, bingo halls and video gaming terminals. It also includes industries that provide gambling services, such as lotteries and off-track betting. Over the five years to 2021, this segment has contracted as a share of revenue as industries within this segment have declined at a faster rate than that of the sector.
INDEPENDENT ARTISTS, WRITERS AND PERFORMERS
Independent artists, writers and performers represent an estimated 11.0% of sector revenue in 2021, making it the third-largest subsegment.
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This segment comprises individuals that are primarily engaged in artistic productions and creating artistic work. Over the five years to 2021, this segment has declined as a share of revenue, as its decline has outpaced that of the sector. For example, revenue for the Performers and Creative Artists industry (71151) has declined at an annualized rate of 0.1% over the five years to 2021. In 2020, most arts and live performance events were canceled, putting downward pressure on revenue generated by this segment. Consequently, many operators in this segment have started to offer streaming services to generate income during the pandemic.
MUSEUMS, HISTORICAL SITES AND SIMILAR INSTITUTIONS
Museums, historical sites and similar institutions are primarily engaged in preserving and displaying objects, sites and natural wonders.
Over the past five years, IBISWorld estimates that this segment has slightly contracted as a share of revenue, representing 9.1% of revenue in 2021. This is primarily the result of funding cuts for the nonprofit areas of this subsector, including many operators in the Historic Sites industry (71212) and the National and State Parks industry (71219). Due to the coronavirus pandemic, most locations in this segment were forced to temporarily close in March 2020. Consequently, many museums have introduced virtual tours and waived entrance fees at the locations that remain open to help individuals to cope with the quarantine period. Nonetheless, as state governments gradually lifted COVID-19 restrictions, establishments in these industries are permitted to reopen.
PROMOTERS OF PERFORMING ARTS, SPORTS AND SIMILAR EVENTS
Operators in this subsegment are primarily engaged in promoting and organizing performing arts productions, sports events and festivals.
In 2021, IBISWorld estimates that promoters of performing arts, sports and similar events account for 6.9% of sector revenue. Over the five years to 2021, IBISWorld estimates that this subsegment has fallen as a share of revenue and this is evidenced by revenue for the Concert and Event Promotion industry (71133) declining at a faster rate than that of the sector during the period. Industry revenue is expected to decline significantly in 2020 due to the restrictions of large gatherings.
AMUSEMENT PARKS AND ARCADES
The amusement parks and arcades subsegment includes establishments that primarily operate amusement parks and arcades and represents an estimated 5.0% of sector revenue.
Over the five years to 2021, IBISWorld estimates that this segment has decreased as a share of revenue, driven by the strong decline of the Arcade, Food and Entertainment Complexes industry (71312). In 2020, this segment is expected to contend with challenges posed by the COVID-19 (coronavirus) pandemic as most establishments in this segment were temporarily closed to curb the spread of the coronavirus. Therefore, theme parks, such as Disney World and Universal Studios, have launched virtual rides on YouTube channels, attempting to spur demand for merchandise. Although establishments in these industries have been permitted to reopen, however, they are expected to lose a significant revenue share that is generated from foreign visitors.
PERFORMING ARTS COMPANIES
Performing arts companies are expected to represent 4.0% of sector revenue in 2021.
This segment includes establishments engaged in producing live presentations. Industry participants are generally referred to as actors and actresses, singers, dancers, musical groups and artists. Over the five years to 2021, IBISWorld estimates that revenue generated by this subsegment has slightly declined, as the internet has made it increasingly simple to obtain free or inexpensive media.
OTHER
The other subsegment of this industry includes operators in various industries, such as the Celebrity and Sports Agents industry (71141); the Golf Courses and Country Clubs industry (71391); the Marinas industry (71393); the Gym, Health and Fitness Clubs industry (71394); and the Bowling Centers industry (71395).
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Amid the coronavirus pandemic, operators in the Gym, Health and Fitness Clubs industry have closed their locations and opted to deliver online classes. After the pandemic has slowed down, some state governments have permitted gyms to gradually reopen at limited capacity. Due to the varied nature of the industries in this subsegment, the segment has remained relatively steady as a share of revenue over the years to 2021, accounting for an estimated 36.7% of sector revenue.
Demand Determinants
Demand for the Arts, Entertainment and Recreation sector is primarily influenced by macroeconomic drivers, available leisure time, travel rates and population trends.
Since the services and experiences offered by sector operators are considered discretionary, demand for the sector generally trends in line with the health of the overall economy. As consumers have more available income to spend on nonessentials, demand for sector establishments generally rises. Similarly, available free time plays a large role in sector demand. When consumers have busier schedules and less free time, they become more likely to forgo visits to concerts, museums and amusement parks; conversely, when consumer leisure time is abundant, demand for these sector experiences grows.
Travel rates also play a significant role in determining sector demand, since many consumers travel far and wide to visit sector establishments. For example, amusement parks, such as Disney World, and many national parks draw crowds from across the country and world. Therefore, as consumers are more frequently able to leave their homes and travel rates rise, demand for sector establishments grows. International tourism also affects the sector, since many consumers come from overseas to visit well-known establishments.
The population also plays a part in determining demand. Since the sector's primary downstream market is consumers, the number of consumers available to partake in sector experiences affects demand. Therefore, as the population rises, sector demand generally grows.
The COVID-19 (coronavirus) pandemic that occurred in 2020 hurts the industry demand. In specific, travel rates have dropped significantly as the pandemic spread. Simultaneously, customers hold off on splurging at industry establishments as the current economic outlook is negative.
Major Markets
CONSUMERS AGED 45 TO 64
Consumers aged 45 to 64 represent the largest consumer pool for this sector, accounting for an expected 41.8% of revenue in 2021.
This consumer segment is the most likely to attend live theater performances out of any other market. They are also regular attendees at concerts and live sporting events, though they are less likely to attend live family shows. Historical sites and museums are also particularly popular among this age group. Further, they are also parents of young customers that sector operators serve. Over the past five years, IBISWorld estimates that this segment has remained relatively stagnant as a share of revenue.
CONSUMERS AGED 25 TO 44
Consumers aged 25 to 44 represent the second-largest consumer
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segment for the Arts, Entertainment and Recreation sector, accounting for an estimated 41.5% of revenue in 2021.
While this consumer segment is not well represented at music concerts or live theater, they are likely to attend sporting events and live family shows. Over the five years to 2021, this segment has slightly expanded as a share of revenue as improved household incomes enable consumers in this segment to splurge on sector establishments.
CONSUMER AGED 65 AND OVER
Consumers aged 65 and over are the third-smallest consumer market for this sector, accounting for an anticipated 11.3% of revenue in 2021.
Live theater is the most common type of entertainment event experienced by this older segment, while sporting events are the least common. Over the past five years, IBISWorld estimates that this consumer segment has slightly expanded as a share of revenue as more baby boomers retire, leaving them with more spare time to engage in the sector's services.
CONSUMERS AGED 24 AND YOUNGER
Consumers aged 24 and younger account for an estimated 5.4% of sector revenue.
These young consumers are relatively well represented at sports games and concerts, though are less likely to attend live theaters or cultural events. This market segment is also somewhat limited in its sector participation, since gambling industries, which is the sector's fourth-largest subsegment, requires that all participants be over the age of 18. Moreover, due to their restricted income streams, consumers in this segment generally depend on their parents for spending on sector' services. Over the past five years, consumers in this age segment have remained fairly stagnant as a share of revenue.
Exports in this industry are Low and Steady
Imports in this industry are Low and Steady
The service-based nature of the Arts, Entertainment and Recreation sector results in the primary activities limiting any opportunity for international trade. As a result, the sector does not generate any revenue from imports or exports. However, operators display some degree of globalization through foreign ownership of US establishments, occasional US ownership of establishments abroad and domestic demand from international visitors.
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Business Locations
The highest concentration of establishments in the Arts, Entertainment and Recreation sector is in the West, accounting for 24.6% of establishments in 2021. California leads the pack in the region and in the nation, accounting for 19.1% of revenue in 2021. California, especially Los Angeles, is famous for its concentration of musicians, promoters and agents, leading to such high concentration. Furthermore, the state houses many of the nation's amusement parks, such as Disneyland and marinas, due to its coastal location.
The Southeast region accounts for 20.9% of establishments in 2021. Florida holds the most sector establishments out of all of the states in the Southeast, accounting for 6.2% of locations in 2021. Florida, especially the Orlando area, is famous for its amusement parks, which include Disney World, Sea World and Universal Studios. Florida also has a high concentration of golf courses, country clubs and marinas.
The Mid-Atlantic holds the third-highest concentration of sector establishments, accounting for 17.3% in 2021. New York leads the region, accounting for 9.1% of locations in 2021. Similar to Los Angeles, New York City is known for its high concentration of musicians, promoters and sports teams. As a result, sector concentration is second-highest in New York.
All other remaining regions account for less than 13.0% of sector establishments, with the Rocky Mountains region accounting for the least at 4.7% of establishments in 2021. This region, however scarce in respect to other establishments, does hold a high concentration of ski and snowboard resorts, due to the many large mountains located in the region.
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Competitive Landscape Market Share Concentration
Concentration in this industry is Low
Market share concentration in the Arts, Entertainment and Recreation sector is low, with the four largest players accounting for less than 10.0% of revenue in 2021. The New York State Lottery holds the largest market share in the sector, with just 3.2% of revenue. The Walt Disney Company is a close second with respect to market share concentration, with 1.9% of revenue. The average player in the sector achieves an estimated $166,889.60 in annual revenue, employs between two and three workers and operates one establishment. The Amusement Parks industry (IBISWorld report 71311) is a standout industry within this sector since it has a high level of market share concentration. The industry's four largest players hold more than 80.0% of industry revenue. Across the rest of the sector, most other industries have extremely low market share concentration. The Musical Groups and Artists industry (71113), for example, contains no major players and is considered extremely fragmented.
Key Success Factors
IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Protection of intellectual property/copyrighting of output: Protection of an artist's intellectual property ensures that they receive royalties.
Ability to quickly adopt new technology: Artists must be able to use social media and digital technology to publicize and distribute their work, while operators, such as amusement parks, must keep up with the latest technology to remain attractive.
Having a loyal customer base: Having a loyal fan base is an especially important success factor for artists and sports teams, though it plays a role in most all areas of this sector.
Access to multiskilled and flexible workforce: Ability to access a quality and flexible staff is important to enhance visitor experience and mitigate labor costs.
Proximity to key markets: Operators should choose locations near areas with significant populations and domestic and international visitors.
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Cost Structure Benchmarks
Profit
Sector profit, measured as earnings before interest and taxes, spans a wide range between its subsegments but accounts for an estimated 6.5% of revenue in 2021. Over the five years to 2021, sector profit has declined from accounting for 7.4% of revenue in 2016. Prior to the COVID-19 pandemic, the Lotteries and Native American Casinos industry (IBISWorld report 71329) represents a standout subsegment of this sector; however, state-run lotteries function to provide funding to priorities, such as the education system, therefore profit is often distributed to these causes. Conversely, the Golf Courses and Country Clubs industry (71391) achieves relatively low profit within this sector. Many sector operators have large fixed costs that remain the same regardless of consumer visits and attendance. As a result, the Golf Courses and Country Clubs industry has achieved low profit in recent years as the popularity of golf has waned.
Nevertheless, profit has declined across all industries within this sector since sector establishments, which are categorized as nonessential businesses and were required to close in March 2020 to slow down the spread of COVID-19 (coronavirus). As the pandemic has slowed down, state governments have enabled selected sector establishments to reopen at a limited capacity. However, since reopening dates vary between states, this has put pressure on profitability as operational costs continue to mount while revenue depletes. Therefore, some operators have anticipated that they will likely operate at a loss in 2020, calling for government support.
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Wages
Wage costs represent an estimated 35.1% of revenue in 2021. The nature of this sector is service-based, with sector operators providing experiences, rather than products. As a result, the sector is reliant on high-skilled workers, such as musicians, athletes and customer service providers, to attract consumers. However, in 2020, the mass layoffs by sector operators amid the coronavirus pandemic are expected to cause industry wages to decline significantly. Despite the government launching a stimulus package to help companies retaining workers, most businesses still struggled to keep their full workforce. According to the US Bureau of Labor Statistics, unemployment rates in the leisure and hospitality sectors reached 10.9% in June 2021.
The Sports Franchises industry (71121a) represents a standout subsegment of this sector, with wages accounting for 63.7% of revenue; in this industry, the athletes are the employees, and their exceptional abilities draw enormous crowds to games and earn them high salaries. Conversely, the Lotteries and Native American Casinos industry (71329) incurs a low wages' share of revenue, since only a small back-office staff is needed to support the lottery's infrastructure. Wages' share of sector revenue has increased from 32.7% in 2016.
Purchases
Purchase costs represent an estimated 2.3% of sector revenue in 2021. Purchases range drastically by subsegment; in the Musical Groups and Artists industry (71113), in which purchase costs only account for 2.7% of revenue, purchases primarily include blank CDs and touring expenses. Conversely, within the Lotteries and Native American Casinos industry (71329), purchase costs account for 7.5% of revenue and include food and beverages, in addition to other retail items sold on markups.
Marketing
Marketing costs represent an estimated 2.6% of sector revenue in 2021. Marketing's share of revenue is substantially higher in subsegments, such as sports franchises and promoters, compared with most other subsegments.
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Depreciation
Operators in many subsegments have invested in updating facilities and depreciable assets to attract and retain consumer interest as the sector has become more saturated with players and more competitive in an operating environment. In 2021, depreciation costs are expected to make up 6.2% of sector revenue.
Rent
Rental costs account for an estimated 3.6% of revenue in 2021. Rent ranges drastically by subsegment with operators in the Amusement Parks industry (71311) and Museums industry (71211) dedicating a larger share of revenue to this expense than operators in segments such as the Musical Groups and Artists industry (71113).
Utilities
Utility costs represent an estimated 0.6% of sector revenue in 2021. Establishments in the sector demand utilities in their daily operations, mainly including electricity, gas, water and sewer.
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Other Costs
Other common expenses for this sector include insurance, transportation, administrative costs, security, accounting and auditing, comprising an estimated 43.0% of sector revenue in 2021.
Basis of Competition
Competition in this industry is High and the trend is Steady
INTERNAL COMPETITION
As a highly fragmented sector offering a variety of discretionary experiences, the Arts, Entertainment and Recreation sector is extremely sensitive to both internal and external competition.
Internally, subsegments compete with one another on the basis of price, activity popularity, convenience and reputation. Since participation in sector activities is considered discretionary, the sector is sensitive to economic downturns that deter consumers from splurging on entertainment experiences. Therefore, the sector subsegments that price their experiences to be as affordable to consumers are the most likely to perform well even during times of macroeconomic turbulence.
Most subsectors offer a wide range of price points for their experiences, with well-known and popular experiences commanding a higher price-tag than those that are less known. Operators within the same caliber of service typically compete with others both within and across subsegments. For example, tickets to a Taylor Swift concert, from the Musical Groups and Artists industry (IBISWorld report 71113) competes with Katy Perry from the same industry, though concert tickets also compete for consumer dollars with tickets to a Dallas Cowboys game, which operates in the Sports Franchises industry (71121a).
The popularity of a specific activity is another basis of internal competition, though one that is much more subjective than price. Consumer demand is highest for subsectors that appeal to their entertainment and recreation desires. Therefore, the cultural lauding of one activity over another plays a significant role in determining demand. For example, the Golf Courses and Country Clubs industry (71391) has struggled to maintain consumer interest in recent years, as the game has failed to gain popularity among young generations. Conversely, amusement parks have captured a larger share of consumer demand as new technology has upgraded the caliber of rides and rollercoasters available at parks.
Sector operators also compete with one another on the basis of convenience. Operators that are conveniently located close to dense population pockets or in areas known for attracting visitors interested in entertainment are likely to perform better than operators that are not. For example, amusement parks operating in or near Orlando, FL, are likely to receive high foot traffic compared with amusement parks in rural areas.
EXTERNAL COMPETITION
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This sector experiences a moderate level of external competition since the experiences offered by sector operators are considered discretionary.
Therefore, the sector primarily competes with sectors that provide products and services that are considered more essential.
Barriers to Entry
Barriers to Entry in this industry are Medium and the trend is Steady
Barriers to entry in the Arts, Entertainment and Recreation sector vary significantly from subsector to subsector; however, while some subsectors have low barriers to entry, all subsectors have high barriers to success. For example, the Musical Groups and Artists industry (IBISWorld report 71113) has low barriers to entry, with very few start-up costs and few required tools. Nevertheless, the industry is very competitive, with very few operators making high levels of revenue. As a result, the barriers to success in this industry are considered high.
Conversely, some segments in the sector have very high start-up costs, leading to high barriers to entry. The Amusement Parks industry (71311), for example, has very high barriers to entry, since new operators must secure a large plot of land and several expensive rides and attractions, such as rollercoasters. Overall, barriers to entry in the sector average out to moderate, since many subsegments have high barriers to entry and others have low.
Barriers to Entry Checklist
Competition High
Concentration Low
Life Cycle Stage Growth
Technology Change Medium
Regulation & Policy Medium
Industry Assistance Medium
Industry Globalization
Globalization in this industry is Medium and the trend is Steady
The Arts, Entertainment and Recreation sector experiences a moderate level of globalization. While international trade is not a factor in this service-based sector, operators experience globalization through foreign ownership of establishments, overseas establishments operated by US-based companies and demand from international tourists at US locations.
A notable example of globalization in this sector is the Walt Disney Company. The California-based company operates many parks overseas, including France, Japan and China. This international sprawl of company establishments contributes to globalization. Moreover, the company notes that an estimated 20.0% of park visitors at Disney World in Florida are tourists from other countries. This high level of demand for US sector establishments from overseas consumers greatly contributes to sector globalization.
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Major Companies
Major Players New York State Lottery
Market Share: 3.6%
Founded in 1967, New York State Lottery (NYSL) is the largest lottery operation in the United States. With the mission of raising revenue to offer further support to education throughout the state, NYSL uses its profit to fund K-12 education in New York. The NYSL primarily earns its revenue through the sale of lottery tickets through 15,800 licensed locations across the state, in addition to nine video lottery facilities.
In fiscal 2020 (year-end March), NYSL's earnings accounted for $3.4 billion in aid for education (latest data available). While the allocation of profit is contingent on the type of game sold, all lotto tickets sold must pledge 45.0% of total sales for educational purposes. The other significant players in the Lotteries and Native American Casinos industry (IBISWorld report 71329) are the Florida Lottery, which holds a 6.1% market share in the industry. The Texas Lottery and the Massachusetts Lottery hold 5.6% and 4.0% of the industry, respectively.
Financial performance
IBISWorld estimates that NYSL's sector-relevant revenue has increased at an annualized rate of 0.8% to $10.1 billion over the five years to fiscal 2021. The NYSL's Mega Millions and Power Ball games have generated nearly 6.0% of this revenue. Besides, casinos, such as Empire City, Finger Lakes, Saratoga, Fairgrounds, Monticello, Tioga Downs, Vernon Downs and Batavia Downs collectively contributed an estimated 20.7% to total revenue in fiscal 2020 (latest data available). Instant ticket sales account for the largest contribution of NYSL's revenue, accounting for $4.1 billion or 42.2% in fiscal 2020 (latest data available). Despite being classified as an essential business, an anticipated decline in consumer spending as a result of the economic fallout in 2020 will likely place downward pressure on the company's revenue. Further, New York represents a geographic location with the highest amount of COVID-19 exposure in the country, accounting for more than 25.0% of reported US cases as of April 2020 (latest data available). As a result, New York is expected to experience a higher degree of negative effects than other, low exposure states. Consequently, to spur demand, Mega Millions and Powerball jackpot amounts have been increased to bolster ticket sales.
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New York State Lottery (US sector-specific segment) - financial performance*
Year** Revenue
($m) Growth
(% change) Operating Income
($m) Growth
(% change) 2016-17 9,676.0 N/C 3,287.0 N/C 2017-18 9,974.0 3.1 3,369.0 2.5 2018-19 10,291.0 3.2 3,504.0 4.0 2019-20 9,741.0 -5.3 3,308.0 -5.6 2020-21 9,482.4 -2.7 2,442.4 -26.2 2021-22 10,054.9 6.0 3,412.6 39.7
Source: Annual report and IBISWorld Note: *Estimates; **Year-end March
The Walt Disney Company
Market Share: 1.9%
Founded in 1923 and headquartered in Burbank, CA, the Walt Disney Company (Disney) is a global entertainment company that operates several ventures, including film production, TV, theme parks, resorts and travel. Within this sector, Disney operates in the Amusement Parks industry (IBISWorld report 71311). According to the company's 2020 annual report, Disney employed 203,000 workers and achieved $65.4 billion in total company revenue (latest data available).
Disney's origins in owning and running amusement parks date back to 1955 when the company opened Disneyland in Anaheim, CA. Today, Disney also operates Disney California Adventure in Anaheim and the Walt Disney World Resort near Orlando, FL; these parks include the Magic Kingdom, Epcot, Disney's Hollywood Studios, Disney's Animal Kingdom, Disney's Blizzard Beach and Disney's Typhoon Lagoon. The Orlando resort is North America's most frequently visited tourist attraction. In August 2019, Disney opened the Star Wars: Galaxy's Edge theme park area in Disney's Hollywood Studios. As a result, Disney movie fans can attend and purchase film-oriented rides and merchandise at Disney theme parks. Moving forward, the company is expected to use a similar tactic in the construction of a Marvel: Avengers theme park, based on one of the most successful film franchises in cinematic history. The Avengers campus is expected to open in summer 2020. In March 2019, the company acquired TFCF Corporation, a media company, for $69.5 million.
Financial performance
IBISWorld expected that Disney's sector-relevant revenue has decreased at an annualized rate of 4.4% to $5.3 billion over the five years to fiscal 2021 (year-end September). The company's financial performance over the majority of the past five years has been influenced by consistent growth in visitor numbers, higher average ticket prices and growth of in-park food, beverage and souvenir expenditures. This revenue growth has been partly offset by a rise in operating costs, as the company has invested heavily in several of its facilities over the past five years. However, as the company's sector-relevant revenue is highly reliant on tourism, the company is expected to suffer losses in 2020 as Disney temporarily suspended operations in all theme park and resort locations across the country in light of the outbreak of COVID-19 in March. Similarly, all retail stores, cruise ship sailings and guided tours have been closed or suspended since March 2020. As a result, the company has implemented a furlough of 120,000 workers to reduce operating costs. Moreover, as the financial burden climbs, Disney obtained a $5.0 billion loan and sold $6.0 billion in debt securities. Ultimately, the company's sector-relevant operating income has decreased over the past five years. Most recently, Disney reopened its theme parks in the United States in July 2020. However, strict guidelines have been implemented to reduce infection risk for patrons. According to the company's website, all guests must make reservations prior to attendance, wear a face covering for all activities except swimming and sit- down dining and maintain a contactless form of payment. Furthermore, any guest experiencing symptoms related to coronavirus will not be permitted to enter the park. In the third quarter of fiscal 2020, the company reported that revenue generated from the Parks, Experiences and Products declined 85.0% quarter-over-quarter.
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Walt Disney Company (US sector-specific segment) - financial performance*
Year Revenue
($m) Growth
(% change) Operating Income
($m) Growth
(% change) 2015-16 6,617.1 N/C 1,869.9 N/C 2016-17 7,221.9 9.1 1,935.3 3.5 2017-18 7,923.0 9.7 2,091.5 8.1 2018-19 8,943.1 12.9 1,911.3 -8.6 2019-20 2,916.3 -67.4 361.6 -81.1 2020-21 5,284.4 81.2 638.5 76.6
Source: Annual report and IBISWorld Note: *Estimates; **Year-end September
Live Nation Entertainment Inc.
Market Share: 1.2%
Headquartered in Beverly Hills, CA, Live Nation Entertainment Inc. (Live Nation) is one of the largest producers and promoters of live entertainment in the world, operating in the Concert and Event Promotion industry (IBISWorld report 71133). According to the company's 2019 annual report, Live Nation held 40,000 events in 46 countries and connected 580.0 million fans with 5,000 artists. In 2020, Live Nation reported $1.9 billion in total company revenue (latest data available).
Live Nation Entertainment Inc. was formed when Live Nation Inc. entered into an $899.0 million merger agreement with Ticketmaster prior to the five years to 2020. At the time, Ticketmaster represented one of the largest ticketing companies in the world and has since become a wholly owned subsidiary of Live Nation Entertainment. Live Nation plans to continue expanding its business by increasing ancillary sales per fan at all events and venues while reducing operating and marketing costs. Furthermore, the company has continued to expand via merger and acquisition (M&A) activity to gain market share and boost profitability. In 2017 alone, Live Nation acquired BottleRock Napa Valley Festival, Cuffe & Taylor, BlueStone Entertainment and United Concerts. Since 2018, the company has acquired Frank Productions Inc., one of the country's largest concert promoters, and Applauze, a smartphone app that publishes event information. In May 2018, Live Nation bought controlling interest of ScoreMore Shows (ScoreMore), which promoted and managed many high-profile festivals and concerts in the Texas area, including the Neon Desert Music Festival. In June 2018, Live Nation acquired Red Mountain Entertainment, a regional promoter handling events and festivals in the Southeast market. Finally, in October 2018, Live Nation announced that it acquired a majority stake in the independent concert promotion agency Emporium Presents.
Financial performance
The company's revenue grew robustly prior to the current period due to Live Nation's Ticketmaster purchase and has since continued its growth due to its additional M&A activity. The company has also focused on developing additional corporate sponsorship in recent years, benefiting revenue. Nonetheless, as of March 2020, COVID-19 (coronavirus) has swept through the live event business, forcing Live Nation and other event promoters to cancel shows across the United States and in international markets. Consequently, the company's performance in 2020 is expected to trend downward as long as the health concerns regarding the coronavirus outbreak continue to persist, affecting Live Nation's ability to host live events. Moreover, the company has taken various measures to cut costs amid the pandemic, with its CEO giving up salary and other executives taking a pay cut up to 50.0%. Additionally, Live Nation launched a $10.0 million relief fund to help crew staff affected by the pandemic. According to Live Nation, 17.2 million tickets have been canceled or refunded as of June 2020 (latest data available). Therefore, IBISWorld anticipates Live Nation's sector-relevant revenue to decline an annualized 9.3% to $3.3 billion over the five years to 2021, and its sector-relevant operating income experiencing significant losses during the same period.
Still, the company's size is expected to provide a substantial edge in terms of post-pandemic recovery. Unlike smaller venues, Live Nation's ownership of Ticketmaster enables the company to keep pre-purchased ticket revenue on hand until an event is outright canceled, providing additional liquidity and a comparatively longer burn-rate on debt obligations. Furthermore, the company maintains significant bargaining power with artists, which is expected to amplify as many venues are foreclosed from the pandemic. In fact, according to Rolling Stone Magazine, Live Nation has made efforts to shift the financial burdens of events onto performing artists. The article cites a memo
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received from Live Nation, where the company aims to decrease monetary guarantees prior to an event by an estimated 20.0%, among other stipulations.
Live Nation Entertainment Inc. (US sector-specific segment) - financial performance*
Year Revenue
($m) Growth
(% change) Operating Income
($m) Growth
(% change) 2016 5,390.3 N/C 134.3 N/C 2017 6,278.6 16.5 59.2 -55.9 2018 7,126.6 13.5 180.0 204.1 2019 7,632.5 7.1 214.4 19.1 2020 1,194.6 -84.3 -1,061.1 -595.0 2021 3,312.4 177.3 -355.6 -66.5
Source: Annual report and IBISWorld Note: *Estimates
Fitness International LLC
Market Share: 0.7%
Fitness International LLC (Fitness International) is the parent company of LA Fitness International LLC (LA Fitness), which was founded in 1984 and is based in Irvine, CA. The company operates in this sector through the Gym, Health and Fitness Clubs industry (IBISWorld report 71394). Its primary competitors in the industry include Life Time Inc., which holds a 4.8% market share; 24 Hour Fitness USA Inc., which holds a 3.8% market share; and Equinox Holdings Inc., which holds a 3.0% market share.
Like many of its competitors, LA Fitness offers group fitness classes, which include aerobics, boot camp conditioning, club boxing and cycling, among other fitness services. The company operates in the United States and Canada and strives to make fitness accessible through numerous group fitness options. In 2016, LA Fitness and its parent company, Fitness International, grappled with a class action lawsuit pertaining to its one-month club memberships; the suit claimed that the company misled customers into purchasing yearly, rather than monthly, memberships.
Financial performance
IBISWorld estimates that Fitness International's sector-relevant revenue has decreased at an annualized rate of 0.9% to $1.8 billion over the five years to 2021. Before the COVID-19 (coronavirus) pandemic hit, the company achieved growth as the result of strategic partnerships, acquisitions and establishment expansions. This includes the company's partnership with the Vitamin Shoppe in 2020, enabling the company to open shops that sell sports nutrition products inside LA Fitness health clubs. Furthermore, LA Fitness has expanded to over 700 locations in recent years, as it continues to expand its operations in the United States. In 2020, all LA Fitness locations are closed due to the coronavirus outbreak, affecting company revenue. Moreover, members of LA Fitness filed a lawsuit against the company as it continued to charge monthly membership fees amid club closures. Consequently, LA Fitness announced a suspension on membership charges until its locations reopen. As of October 2020, most of the company's locations have been reopened, although at a limited capacity. The company's sector-relevant operating income has declined over the past five years, primarily due to significant declines in 2020 as a result of the coronavirus pandemic.
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Fitness International LLC (US sector-specific segment) - financial performance*
Year Revenue
($m) Growth
(% change) Operating Income
($m) Growth
(% change) 2016 1,900.5 N/C 222.4 N/C 2017 2,008.6 5.7 265.1 19.2 2018 2,001.9 -0.3 256.2 -3.4 2019 2,056.4 2.7 263.1 2.7 2020 1,557.8 -24.2 152.2 -42.2 2021 1,816.4 16.6 193.4 27.1
Source: IBISWorld Note: *Estimates
Smithsonian Institution
Market Share: 0.6%
Founded in 1846, the Smithsonian Institution (Smithsonian) is the world's largest museum and research complex. Currently, the Smithsonian consortium includes 19 museums and galleries, nine research facilities and the National Zoological Park, though an additional 210 museums are affiliated with the organization. The museum welcomes an estimated 28.8 million annual visitors between its 20 museums and employs more than 6,500 workers. In the Museums industry (IBISWorld report 71211), the Smithsonian holds a 10.7% market share, while its largest competitors, including the J. Paul Getty Museum, the Metropolitan Museum of Art and the Art Institute of Chicago, which all hold less than 5.0% market share.
The Smithsonian receives funding from the US government and generates revenue through its endowment fund, private contributions, retail operations, concessions, licensing activities and magazines. The government funding that the museum receives goes to support conserving national collections, educating the public and continuing research. Comparatively, private funds and other revenue streams are used to expand facilities.
Financial performance
IBISWorld estimates that the Smithsonian's sector-relevant has increased an annualized 0.1% to $1.6 billion over the five years to fiscal 2022 (year-end September). While many other museums have struggled to achieve gains due to government budget cuts and funding issues, the Smithsonian has still managed to maintain relatively steady growth for most of the period. Private contributions have been paramount for the Smithsonian in recent years, with the American Airlines Group Inc. and the Bank of America Corporation pledging large donations. In 2017, the Smithsonian raised $1.9 billion, marking the largest amount ever collected in a campaign by a cultural organization. However, as a nonprofit entity, the Smithsonian does not record profit, and therefore, surplus revenue is recorded as an asset.
In early 2020, similar to most operators in this sector, the company announced a temporary closure of its 19 museums in Washington, DC, the National Zoo and two New York museums, which include the Cooper Hewitt Smithsonian Design Museum and the American Indian Museum's Heye Center. In April 2020, the company recorded a $22.0 million loss due to closures (latest data available). Therefore, to prevent laying off workers, the institution has implemented a pay cut for senior executives, ranging between 10.0% and 15.0%. As state governments eased COVID-19 restrictions, the company has reopened its locations. Nevertheless, the company's revenue increased in 2020 due to higher funds raised.
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Smithsonian Institution (US sector-specific segment) - financial performance*
Year** Revenue
($m) Growth
(% change) Assets
($m) Growth
(% change) 2015-16 1,541.0 N/C 4,713.0 N/C 2016-17 1,514.0 -1.8 4,890.0 3.8 2017-18 1,564.0 3.3 5,177.0 5.9 2018-19 1,376.0 -12.0 5,421.0 4.7 2019-20 1,389.0 0.9 6,053.0 11.7 2020-21 1,551.0 11.7 6,675.8 10.3
Source: Annual report and IBISWorld Note: *Estimates; **Year-end September
National Park Service
Market Share: 0.2%
Created by Congress in 1916, the National Park Service (NPS) is part of the US Department of the Interior. To date, the NPS manages 415 natural and historical areas across every state, covering a combined area of 84.0 million acres. The organization employs nearly 20,000 temporary, permanent and seasonal employees, and also receives assistance from more than 200,000 volunteers each year. The NPS is segmented into six regional organizations, including the Northeast, Southeast, Midwest, Intermountain, Pacific West and Alaska, and classifies its parks into 20 separate designations, from national parks to national battlefields.
The NPS accounts for the largest share of the market in the National and State Parks industry (IBISWorld report 71219) and holds the second-largest market share in the Historic Sites industry (71212). Within the Historic Sites industry, the Colonial Williamsburg Foundation holds the largest market share with 21.0%, while the NPS holds only 13.7%; however, the Colonial Williamsburg Foundation holds no market share in the much larger National and State Parks industry, where NPS holds 66.4% market share.
Financial performance
The NPS's industry-relevant revenue consists of self-generated, on-site sales of lodging and accommodation services, concession and recreational activity fees, admission and membership fees and private donations and grants. The organization's performance is largely tied to disposable income levels, consumer leisure time and domestic travel, along with the rate of international visitors to the United States. Over much of the past five years, the NPS experienced slight revenue volatility due to varying visitation rates and changes to admission fees. While domestic visitors are important to the organization's performance, international tourists tend to spend greater sums per visit, opting for guided tours and on-site lodging more often than domestic visitors. Slight fluctuations in international visitation rates contributed to revenue volatility during the period, along with steep competition from other forms of leisure and the affordability of alternative vacation options. Still, for much of the period, the NPS performed well, with admission price increases not showing signs of deterring visitors.
However, in 2020, the NPS's industry-relevant revenue is expected to decline significantly due to the COVID-19 (coronavirus) pandemic and economic downturn. Amid the start of the pandemic, the NPS stopped offering on-site lodging and even closed some locations due to perceived issues with maintaining social distancing policies. However, by the summer months of 2020, most locations reopened, with many consumers considering national parks a good alternative to other leisure and vacation activities due to their being largely outdoors. Still, with many domestic and international consumers unwilling to travel long distances or by plane amid the pandemic, visitation rates are expected to plummet. The number of visitors for the 10 most popular national parks is expected to decline 21.0% in 2020 alone, with overnight visitation rates declining an estimated 54.5%. As a result, the NPS is expected to become more reliant on private donations and membership services to keep self-generated revenue afloat in 2020. Still, the drastic industry-relevant revenue decline in 2020 is expected to skew the organization's annualized growth during the period. As a result, over the five years to 2021, the NPS's industry-relevant revenue is expected to increase an annualized 0.7% to $566.5 million.
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National Park Service (US sector-specific segment) - financial performance*
Year Revenue
($m) Growth
(% change) Locations
(Units) Growth
(% change) 2016 548.4 N/C 488 N/C 2017 590.7 7.7 492 0.8 2018 595.5 0.8 501 1.8 2019 609.3 2.3 506 1.0 2020 560.4 -8.0 505 -0.2 2021 566.5 1.1 509 0.8
Source: Annual report and IBISWorld Note: *Estimates
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Operating Conditions Capital Intensity
The level of capital intensity is Medium
The Arts, Entertainment and Recreation sector has a moderate level of capital intensity. For every $1.00 spent on wages, IBISWorld estimates that $0.18 is spent on capital purchases. The sector's level of capital intensity has slightly declined over the five years to 2021, while wages' share of revenue has slightly expanded, accounting for 35.1% of revenue in 2021, up from 32.7% in 2016.
Capita intensity varies significantly from subsegment to subsegment, with industries such as the Performers and Creative Artists industry (IBISWorld report 71151) requiring extremely little capital, and operators such as the Amusement Parks industry (71311) requiring significant capital.
The three most capital-intensive industries in this sector are the Lotteries and Native American Casinos industry (71329), in which for every $1.00 spent on wages, $0.79 is spent on capital; the Museums industry (71211), $0.35 for every $1.00; and the Marinas industry (71393), $0.38 for every $1.00. The three least capital-intensive industries in this sector are the Musical Groups and Artists industry (71113), in which for every $1.00 spent on wages, $0.03 is spent on capital; the Celebrity and Sports Agents industry (71141), $0.03 for every $1.00; and the Sports Franchises industry (71121a), $0.04 for every $1.00.
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Technology & Systems
Potential Disruptive Innovation: Factors Driving Threat of Change
Level Factor Disruptive Effect
Description
Unknown Rate of Innovation
Unknown A ranked measure for the number of patents assigned to an industry. A faster rate of new patent additions to the industry increases the likelihood of a disruptive innovation occurring.
Unknown Innovation Concentration
Unknown A measure for the mix of patent classes assigned to the industry. A greater concentration of patents in one area increases the likelihood of technological disruption of incumbent operators.
Medium Ease of Entry Potential A qualitative measure of barriers to entry. Fewer barriers to entry increases the likelihood that new entrants can disrupt incumbents by putting new technologies to use.
High Rate of Entry Likely Annualized growth in the number of enterprises in the industry, ranked against all other industries. A greater intensity of companies entering an industry increases the pool of potential disruptors.
Very Low Market Concentration
Very Unlikely
A ranked measure of the largest core market for the industry. Concentrated core markets present a low-end market or new market entry point for disruptive technologies to capture market share.
The industry structure creates a moderate level of entry barriers, which is coinciding with a high rate of new competitors entering the industry. This high rate of entry creates a significant pool of potentially disruptive entities and the industry structure does not significantly affect their growth potential.
Major market segments for industry operators are relatively diversified. The spread of market segments suggests that there are limited entry points other than those already served my incumbent operators.
Due to the diversity and hands-on experiences provided by sector players, the Arts, Entertainment and Recreation sector is less likely to be disrupted by technological changes.
Although the growth of video games has somewhat depressed demand for sector services among younger generations in recent years, incumbent operators have heavily promoted their presence on social networks and high-traffic websites, thus triggering demand from this tech-savvy customer segment. Moreover, customers are now able to purchase entry tickets and reserve seats online, thus saving significant waiting time.
The level of technology change is Medium
Technological change in the Arts, Entertainment and Recreation sector is considered moderate and rising.
Technology plays a significant role in this sector since performing artists use music technology to create and produce songs, promoters use the internet and social media to market events and amusement parks rely on frequent ride advancements to sustain consumer interest. Over the five years to 2021, technological change has been moderate, with changes coming in the form of enhanced equipment and capabilities. For example, advancements and additions to virtual reality and augmented reality have played large roles in improving the quality of rides and experiences in theme parks; recording artists have reaped the benefits of new recording technology, such as networked audio over IP and cloud computing; and digital slot machines are increasingly being connected to social media so gamblers can share their experience. While there are many ways in which technology has affected this sector, it is still only moderately changing.
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Over the coming years, IBISWorld expects that technology will continue to change and play a larger role in this sector.
Revenue Volatility
The level of volatility is Very High
Prior to the COVID-19 pandemic, revenue volatility is low for the Arts, Entertainment and Recreation sector, with most every subsegment experiencing similar levels of volatility.
Exceptions include a handful of industries that have experienced moderate volatility, including the Non-hotel Casinos industry (IBISWorld report 71321), the Historic Sites industry (71212), the Ski and Snowboard Resorts industry (71392) and the Amusement Parks industry (71311). Sector volatility remained low for most of the five years to 2021, as favorable macroeconomic factors enabled more consumers to regularly partake in sector experiences. Since the services offered by this sector are considered discretionary, demand generally fluctuates in line with disposable income and time trends. Sector demand was relatively stable due to steady gains in per capita disposable income before taking a hit in 2020. As most establishments were temporarily shuttered amid the COVID-19 outbreak, sector revenue will likely decline sharply. Over the five years to 2021, revenue grew as rapidly as 24.6% in 2021 and is expected to decline as much as 36.4% in 2020.
Regulation & Policy
The level of regulation is Medium and the trend is Increasing
While some subsegments of the Arts, Entertainment and Recreation sector have relatively low levels of regulation, such as the Concert and Event Promotion industry (IBISWorld report 71133), most others contend with relatively heavy regulation.
As a result, the sector as a whole is considered moderately to highly regulated. Some industries experiencing the heaviest regulation include Lotteries and Native American Casinos industry (71329), Ski and Snowboard Resorts industry (71392), the National and State Parks industry (71219). Some notable regulations in these three subsectors are as follows.
SKI AND SNOWBOARD RESORTS
Ski Resorts are subject to a wide variety of federal, state, regional and local laws and regulations relating to land use, environmental health and safety, water resources, air and water emissions, sewage disposal and the use, storage, discharge, emission and disposal of hazardous materials and hazardous and nonhazardous wastes, remediation of contaminated sites and protection of natural resources such as wetlands and other environmental matters.
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Special Use Permits are granted by the US Forest Service to companies to use federal land as the site for ski lifts and trails. The Forest Service has the right to review and approve the location, design and construction of improvements in the permit area and many operational matters. These permits also limit the company's operations on the land.
LOTTERIES AND NATIVE AMERICAN CASINOS
One-half of states currently permit commercial casinos in some form, while 28 states currently permit Tribal Casinos, five states permit card rooms, seven states permit electronic gaming devices and 14 states have racetrack casinos.
In many of these states, casinos are regulated by state casino and gaming commissions, which include comprehensive internal auditing and inspection procedures to stop any possibility of money laundering or skimming and compulsory checks on persons applying for employment at a casino and licenses have to be obtained prior to operating a casino.
Native American casinos operate under federal government legislation and also state compacts with individual tribes. This gaming is legislated at the federal level by the Indian Gaming Regulation Act of 1988. While state gaming laws apply, only the federal government has the power under the act to prosecute Native American tribes for state gaming violations, which is handled by the National Indian Gaming Commission. There are three classes of Native American gambling. Most lotteries, including video lotteries, are licensed by state lottery commissions and operated by these organizations or agents. In all 50 states, the minimum age to gamble is between 18 and 21.
NATIONAL AND STATE PARKS
Regulations for national and state parks span a wide range and pertain to the entry of visitors into or the use of, certain areas; the protection and conservation of fauna, flora and natural resources, including timber; the regulation and licensing of activities undertaken in the park or nature center, including tour guiding and adventure tourism (e.g. rappelling, whitewater rafting and rock climbing); and the rendering of concessions, the rental of sports equipment (e.g. kayaks, paddles) and accommodation activities.
There are also regulations regarding proper waste management and scientific or other research activities for which approvals are usually required. Some of the more specific regulations contend with the use of metal detectors and whether pets are permitted on-premise, which is determined at the state level of government.
COVID-19
Due to the COVID-19 outbreak, nearly all state governments have imposed closure of nonessential businesses order, forcing most establishments in this sector to temporarily close.
However, as the pandemic has slowed down, some state governments started to ease the COVID-19 restrictions, enabling some sector establishments to reopen at a limited capacity. Nevertheless, the reopening phase varies between states.
Industry Assistance
The level of industry assistance is Medium and the trend is Increasing
The Arts, Entertainment and Recreation sector includes a wide range of industries, receiving varying rates of assistance.
While industries such as the Museums industry (IBISWorld report 71211) receive significant assistance in the form of government funding, others, such as the Racing and Individual Sports industry (71121b) only receive assistance insofar as industry associations. Industry associations are common in this sector, with most subsegments receiving assistance from an association. This includes the Association of Performing Arts Professionals, the Association of Talent Agents, the American Alliance of Museums, The International Association of Amusement Parks and Attractions and the American Gaming Association.
The Coronavirus Aid, Relief and Economic Security (CARES) Act
The Coronavirus Aid, Relief and Economic Security (CARES) Act signed by President Trump on March 27, 2020 is expected to help lessen the pressure that businesses are enduring. Specifically, through this act, the US Small Businesses Administration's Paycheck Protection Program has awarded $3.7 billion in loans to small businesses in the Arts,
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Entertainment and Recreation sector, preventing them from laying off workers due to the pandemic. Moreover, the Act also allocates $10.0 billion through emergency grants under Economic Injury Disaster Loan (EIDL) and $17.0 billion for loan relief under SBA Debt Relief. As for businesses of other sizes, the act offers a refundable tax credit that covers 50.0% of payroll up to $10,000 per employee. For mid-sized businesses that are ineligible for the PPP program, the act provides them with indirect loans that do not have an annualized interest rate higher than 2.0% and are not due in at least the next six months under the Mid-Sized Business Lending Program. Conversely, for large-sized businesses' loans, interest rates will likely be determined by the Treasury Secretary. For businesses that have fewer than 15,000 employees, they can obtain additional liquidity through the Main Street Lending Program, under which the Federal Reserve will purchase up to 95.0% of eligible businesses' loans from qualified lenders.
Overall, these programs aim to help industry players to retain their workforce and cover emergency expenses to stay afloat amid the pandemic. However, as the initial fund quickly drained, in late April 2020, President Trump signed the US Paycheck Protection Program and Health Care Enhancement Act (PPP Enhancement Act), appropriating an extra $321.0 billion and $50.0 billion to the PPP program and EIDL program, respectively.
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Key Statistics Industry Data
Year Revenue
($m) IVA
($m) Establishments
(Units) Enterprises
(Units) Employment
(Units) Exports
($m) Imports
($m) Wages
($m)
Domestic Demand
($m)
Per Capita Disposable Income ($)
2012 267,518 121,748 1,361,621 1,351,508 3,293,829 N/A N/A 87,773 N/A 39,782 2013 274,531 127,236 1,383,646 1,373,649 3,368,694 N/A N/A 88,527 N/A 39,002 2014 284,977 131,931 1,441,268 1,430,780 3,481,550 N/A N/A 92,604 N/A 40,308 2015 299,031 141,504 1,475,343 1,464,607 3,572,555 N/A N/A 97,247 N/A 41,684 2016 309,935 143,799 1,521,051 1,510,088 3,695,278 N/A N/A 101,337 N/A 42,208 2017 325,135 150,172 1,579,548 1,566,259 3,805,080 N/A N/A 103,027 N/A 43,233 2018 335,528 154,388 1,660,847 1,643,619 3,949,287 N/A N/A 105,736 N/A 44,552 2019 347,462 160,250 1,707,346 1,690,605 4,060,518 N/A N/A 110,911 N/A 45,302 2020 221,121 107,019 1,492,735 1,491,475 3,097,220 N/A N/A 81,795 N/A 47,768 2021 275,533 131,920 1,650,990 1,635,780 3,615,989 N/A N/A 96,781 N/A 49,531 2022 307,611 145,408 1,749,507 1,727,106 3,920,667 N/A N/A 105,558 N/A 48,558 2023 323,541 152,307 1,814,074 1,788,939 4,087,635 N/A N/A 110,248 N/A 50,300 2024 330,746 155,723 1,860,525 1,834,914 4,181,036 N/A N/A 112,754 N/A 52,110 2025 336,896 158,793 1,903,383 1,877,523 4,264,389 N/A N/A 114,972 N/A 54,044 2026 343,147 161,856 1,942,557 1,916,273 4,345,017 N/A N/A 117,137 N/A 56,056
Annual Change
Year Revenue
(%) IVA (%)
Establishments (%)
Enterprises (%)
Employment (%)
Exports (%)
Imports (%)
Wages (%)
Domestic Demand
(%)
Per Capita Disposable Income (%)
2012 2.40 4.17 3.82 3.80 3.21 N/A N/A 2.31 N/A 2.58 2013 2.62 4.50 1.61 1.63 2.27 N/A N/A 0.85 N/A -1.97 2014 3.80 3.69 4.16 4.15 3.35 N/A N/A 4.60 N/A 3.34 2015 4.93 7.25 2.36 2.36 2.61 N/A N/A 5.01 N/A 3.41 2016 3.64 1.62 3.09 3.10 3.43 N/A N/A 4.20 N/A 1.25 2017 4.90 4.43 3.84 3.71 2.97 N/A N/A 1.66 N/A 2.43 2018 3.19 2.80 5.14 4.93 3.78 N/A N/A 2.62 N/A 3.04 2019 3.55 3.79 2.79 2.85 2.81 N/A N/A 4.89 N/A 1.68 2020 -36.4 -33.2 -12.6 -11.8 -23.7 N/A N/A -26.3 N/A 5.44 2021 24.6 23.3 10.6 9.67 16.7 N/A N/A 18.3 N/A 3.68 2022 11.6 10.2 5.96 5.58 8.42 N/A N/A 9.06 N/A -1.97 2023 5.17 4.74 3.69 3.58 4.25 N/A N/A 4.44 N/A 3.58 2024 2.22 2.24 2.56 2.56 2.28 N/A N/A 2.27 N/A 3.59 2025 1.85 1.97 2.30 2.32 1.99 N/A N/A 1.96 N/A 3.71 2026 1.85 1.92 2.05 2.06 1.89 N/A N/A 1.88 N/A 3.72
Key Ratios
Year IVA/Revenue
(%)
Imports/ Demand
(%)
Exports/ Revenue
(%)
Revenue per Employee
($'000)
Wages/ Revenue
(%)
Employees per estab. (Units) Average Wage ($)
2012 45.5 N/A N/A 81.2 32.8 2.42 26,648 2013 46.3 N/A N/A 81.5 32.2 2.43 26,279 2014 46.3 N/A N/A 81.9 32.5 2.42 26,599 2015 47.3 N/A N/A 83.7 32.5 2.42 27,221 2016 46.4 N/A N/A 83.9 32.7 2.43 27,423 2017 46.2 N/A N/A 85.5 31.7 2.41 27,076 2018 46.0 N/A N/A 85.0 31.5 2.38 26,774 2019 46.1 N/A N/A 85.6 31.9 2.38 27,314 2020 48.4 N/A N/A 71.4 37.0 2.07 26,409 2021 47.9 N/A N/A 76.2 35.1 2.19 26,765 2022 47.3 N/A N/A 78.5 34.3 2.24 26,924 2023 47.1 N/A N/A 79.2 34.1 2.25 26,971 2024 47.1 N/A N/A 79.1 34.1 2.25 26,968 2025 47.1 N/A N/A 79.0 34.1 2.24 26,961 2026 47.2 N/A N/A 79.0 34.1 2.24 26,959
Figures are inflation adjusted to 2021
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Additional Resources Additional Resources
American Federation of Musicians http://www.afm.org
Themed Entertainment Association http://www.teaconnect.org
American Gaming Association http://www.americangaming.org
American Alliance of Museums http://www.aam-us.org
US Census Bureau http://www.census.gov
Industry Jargon ARENA A multipurpose indoor facility with average seating capacity between 5,000 and 20,000.
CLUB An indoor venue built primarily for music events, but that may also include comedy clubs. Capacity is generally less than 1,000 seats and often without full fixed seating.
STADIUM A multipurpose, often open-air facility that has an estimated 30,000 seats or more.
Glossary BARRIERS TO ENTRY High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.
CAPITAL INTENSITY Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor. IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.
CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.
DOMESTIC DEMAND Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry.
ENTERPRISE A division that is separately managed and keeps management accounts. Each enterprise consists of one or more establishments that are under common ownership or control.
ESTABLISHMENT The smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed. Multiple establishments under common control make up an enterprise.
EXPORTS Total value of industry goods and services sold by US companies to customers abroad.
IMPORTS Total value of industry goods and services brought in from foreign countries to be sold in the United States.
INDUSTRY CONCENTRATION
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An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%.
INDUSTRY REVENUE The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA) The market value of goods and services produced by the industry minus the cost of goods and services used in production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation.
INTERNATIONAL TRADE The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand: low is less than 5%, medium is 5% to 35%, and high is more than 35%.
LIFE CYCLE All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry's products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self- employed individuals.
PROFIT IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding interest and tax.
REGIONS West | CA, NV, OR, WA, HI, AK Great Lakes | OH, IN, IL, WI, MI Mid-Atlantic | NY, NJ, PA, DE, MD New England | ME, NH, VT, MA, CT, RI Plains | MN, IA, MO, KS, NE, SD, ND Rocky Mountains | CO, UT, WY, ID, MT Southeast | VA, WV, KY, TN, AR, LA, MS, AL, GA, FL, SC, NC Southwest | OK, TX, NM, AZ
VOLATILITY The level of volatility is determined by averaging the absolute change in revenue in each of the past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%.
WAGES The gross total wages and salaries of all employees in the industry.
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- Contents
- COVID-19 (Coronavirus) Impact Update
- About IBISWorld
- About This Industry
- Industry Definition
- Major Players
- Main Activities
- The primary activities of this industry are:
- The major products and services in this industry are:
- Supply Chain
- SIMILAR INDUSTRIES
- RELATED INTERNATIONAL INDUSTRIES
- Industry at a Glance
- Executive Summary
- Industry Performance
- Key External Drivers
- Per capita disposable income
- Inbound trips by non-US residents
- Number of adults aged 20 to 64
- Domestic trips by US residents
- Consumer confidence index
- Time spent on leisure and sports
- Current Performance
- Industry Outlook
- Outlook
- Industry Life Cycle
- Products & Markets
- Supply Chain
- Products & Services
- Demand Determinants
- Major Markets
- Business Locations
- Competitive Landscape
- Market Share Concentration
- Key Success Factors
- Cost Structure Benchmarks
- Basis of Competition
- Barriers to Entry
- Industry Globalization
- Major Companies
- Major Players
- New York State Lottery
- Market Share: 3.6%
- The Walt Disney Company
- Market Share: 1.9%
- Live Nation Entertainment Inc.
- Market Share: 1.2%
- Fitness International LLC
- Market Share: 0.7%
- Smithsonian Institution
- Market Share: 0.6%
- National Park Service
- Market Share: 0.2%
- Operating Conditions
- Capital Intensity
- Technology & Systems
- Revenue Volatility
- Regulation & Policy
- Industry Assistance
- Key Statistics
- Industry Data
- Annual Change
- Key Ratios
- Additional Resources
- Additional Resources
- Industry Jargon
- Glossary