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Insight: Creative Economy Council of the Philippines’ Paolo Mercado asks, “Can your creative business survive a mass extinction event?”

MANILA, PHILIPPINES — There can be no argument that the global pandemic affected billions of lives globally. Perhaps at no time in history have so many people been so affected by one event, and it remains hovering overhead despite the rollout of vaccines. Amid the COVID-19 virus’ spreading like wildfire, segments of society have been forced to adapt, not just to succeed but, in some cases, they’ve even thrived.

Paolo Mercado, president of the Creative Economy Council of the Philippines, recently spoke at the Creative Futures virtual event on the current state of the country’s creative economy. Dubbing his talk “Can your creative business survive a mass extinction event?” Mercado pointed out that the creative economy accounted for 6.5-7% of the Philippines’ GDP, only counting the copyright-based sector and was one of the largest contributors of creativity to the economy in the region.

He noted that creative project freelancers for local work amounted to approximately 2 to 3 million while online freelancers for international work number 1.5 million. With totals of $3.2 billion in creative services, Filipinos ranked first in the ASEAN region and has long had a wealth of world-class talent. Before the pandemic struck in 2020, Filipinos on the world stage were among the creative forces behind Disney titles and characters and were poised to have a greater impact on the global stage of creativity. 

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Meanwhile, online creative freelancing was seen as the next wave of outsourcing in the Philippines. About 1.3 to 1.5 million Filipinos were contributing freelance creative work such as web design, multimedia content editing. 

It isn’t an exaggeration to say that the COVID-19 pandemic has been a real mass extinction event for many businesses and the Philippines ranked among the highest percentage of businesses that closed compared to our neighbors in Southeast Asia. Mercado lamented that Philippine creative industries suffered many losses, among them were cinemas and theaters that remain closed as well as tourism that was largely restricted. 

Even crafts and folk arts could not be sold in places like museums whose doors were closed. Something that was not pandemic-related yet still happened in 2020 also affected Filipino creatives when broadcast giant ABS-CBN was forced to shutdown when their franchise was not renewed, thus affecting the total media landscape.

Mercado noticed, however, that the ones who seemed to suffer less were those involved in digital. While pointing out a disruption in demand because people were not buying or a disruption in supply as people wanted to buy but producers could not produce the goods, he also said that the least affected people were those involved with digital creative services for both domestic and international clients. These include digital marketing, web and graphic design, software, animation, and game development. Also, those involved with digital content including websites, audio-visual streaming, social media, games, and e-commerce.

Due to the different nature of the creative sectors affected, Mercado stated that there have been different strategies that people have used to adjust accordingly. There are three clusters: with the first cluster, the disruption is not as severe and there are opportunities to pursue growth beyond 2019 levels by adapting quickly. The second cluster saw business’ ability to supply the market was somehow disrupted and they’ve thought of ways to deliver their content and creativity in a different, out-of-the-box way to meet their market. The final sector had their supply disruption and demand disruption was badly affected.

At this point, Mercado cited examples of these businesses. Although Kumu started before the pandemic hit, Mercado noted that hey got things right with a value proposition that people were looking for at the time by positioning itself as a social entertainment network with a focus on Filipinos globally. It’s very Filipino and has a very tight commitment to feel good, good vibes content. There are hardly any trolls nor negativity on Kumu, which is what people needed during the lockdown.

Another example Mercado pointed to was Straightarrow. This company based in Ortigas positions itself as a creative process outsourcing company. They’ve been doing digital marketing, creative design, and creative technology for clients abroad. They had the infrastructure to adjust very quickly to work from home setups and deliver for their clients. Since e-commerce and digital business-to-business transactions were continuing, if not growing, they were poised to meet the demand.

Mercado also praised Toon City Animation, a company that has provided animation for Disney and Cartoon Network. They initially had a difficult time adjusting to pandemic restrictions because of their large video files that had to be passed from one worker to another. The transfer of files took a long time, resulting in a loss of productivity, frustration, and loss of contracts even if animation content consumption increased during the pandemic.

Toon City Animation management then found a new model of operating, finding smaller hubs with good bandwidth where people could operate within the safety protocols of the pandemic while dealing with their larger files. This highlights the importance of digital infrastructures for creative industries like this to be able to serve global markets.

Prior to the pandemic, Art Fair Philippines or Art in the Park has been successful as the biggest and highest value art fair in the country. They ran the 2020 edition in February, right before the pandemic hit. Due to restrictions on crowds and mass gatherings, they had to run the 2021 edition of the fair, which was from May 6-15, online. Mercado shared that this was an attempt at doing something that previously required physical presence for people to appreciate and to buy art, the organizers took the effort to migrate this online and promote it to an online audience. 

As mentioned earlier, Initially challenged by the loss of their broadcasting franchise, ABS-CBN was quick to pivot by, first, going digital for the highest demand content, namely the news. They went on YouTube, delivered this even when the revenue was not that high on a free digital platform. Second, they partnered with a former competitor in TV5 to be able to deliver their broadcast content. In spite of the crisis, Mercado said that ABS-CBN’s ability to pivot quickly in order to survive was necessary in order for their content to remain relevant with Filipino audiences.

In terms of theater, Mercado reiterated that it was heavily hit by the pandemic because it’s important for theater to be live and in person to experience the magic of the artform. Some theater groups, he pointed out, have however attempted to keep it important. In May 2020, ABS-CBN streamed the hit musical “Ang Huling El Bimbo” for only 48 hours. They also used it to raise funds for the Pantawid ng Pag-Ibig fund. Repertory Philippines provided a paid streaming service for people to be able to watch their production of The Quest for the Adarna.” Tanghalang Ateneo produced “Oedipus Rex” completely on Zoom as the actors delivered the drama and power of the classic Greek tragedy through a new medium.

Mercado’s final example of a success story for the creative industries of the moment has been the anime adaptation of Budjette Tan and Kajo Baldisimo’s Trese. Beginning in comics form in 2005, Trese developed a cult following before it was picked up by Netflix. Mercado said that the show began streaming as people were hungry for streaming content and it just so happened to be a compelling Filipino story. He also praised the viral billboard marketing campaign from local agency GIGIL that helped place Trese in the Top 10 of Netflix’s streaming shows in 19 countries.

As he concluded his overview, Mercado lamented that we still continue to face difficult times and it is challenging many businesses. Still, there are businesses that are pushing to adapt and survive. He closed his talk by quoting something often wrongly attributed to Charles Darwin, stating, “It is not the strongest of the species that survives, nor the most intelligent, it is the one most adaptable to change.”

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