The Economic Crisis Comes to Hollywood

It was never going to just be the publishing industry and the auto industry and the banking industry.  Eventually, it had to come to the entertainment world.  What do I mean by “It”?  I mean the deflationary forces brought about by the internet combined with the pressures of a four year period of elevated unemployment levels.

Everybody gets a taste of this secular/cyclical beast sooner or later.

Now it’s Hollywood’s turn.  This op-ed at the New York Times detailing the invisible struggle going on in the film and TV biz is pretty intense…

Beyond the hype that culminates in the Academy Awards ceremony on Sunday, Hollywood is contracting, battered by the same economic forces reshaping the rest of the country. Moviegoing attendance hit a 16-year low last year. The industry is beset by rapidly changing business models: the free fall in DVD sales unmitigated by digital streaming, the independent film market that is a shadow of its former self. It all adds up to less. In Los Angeles, the number of television dramas produced last year dropped by 11.5 percent; reality shows were down 1.8 percent and sitcoms, 12.8 percent. On the feature side, the number of movies filmed here declined by an enormous 26.4 percent in the final quarter of last year.

What is less visible is the human toll of all that downsizing — the working actors, directors, writers and others like my foreclosed neighbors, trying to maintain their guild memberships, their health insurance, their mortgages. In the industry’s perverse social code, where appearances are everything, such private struggles are kept well hidden not only from public view but also within the industry itself. Failure is an affront to the accepted logic that, no matter what, Hollywood remains a lodestar of self-invention.

“People have no idea what’s going on in Hollywood now,” a prominent industry blogger told me recently when we met at what had been a favorite industry watering hole, empty that night. “There’s so little work, everyone is living off the money they made in the ’90s,” she added. “But they’re acting like nothing’s changed.”

Unfortunately, Hollywood is up against more than just a poor housing market – they are up against the segmentation that makes it nearly impossible to score an across-the-board hit movie or TV show.  They’re up against the fact that the 18-34 demo doesn’t watch commercials and we often have the TV on in the background while we surf the web on our tablets.

That’s not going to change even if the economy improves.

Source:

Tinseltown, Ghost Town (NYT)