Is Hollywood Recession-Proof?
Ladies and gentlemen, your film issue think piece!
By Andy Klein
Is Hollywood recession-proof?
In a word: no. In another word: yes. In a phrase: It all depends on how you’re defining your terms.
You don’t have to be a wacko alarmist to believe that the current economic downturn is going to get way, way worse before it gets a teeny, weeny bit better. In fact, you probably do have to be a wacko to believe otherwise. (Could it be that the whole crisis is trumped up? A complete fraud designed by the evil People in Charge to soak the rest of us one last time before they lose their most obedient political toadies in Washington? Probably not. But there’s enough wacko in me to occasionally entertain such possibilities.)
While there are many more pressing national issues about the crisis than How It Will Affect the Film Industry, our local economy is bound up with Hollywood tightly enough that it’s a legitimate subject for concern.
There is a myth that Hollywood is not merely recession-proof but even depression-proof. That’s true if, by “proof,” you mean “able to at least stay afloat.” We are told that, in bad times, people will be willing to spend even more than usual for escapist entertainment. This notion started during the ’30s, primarily because the movie business was thriving in comparison to most other highly visible industries. No, the studios didn’t go out of business like so many other enterprises. But they did suffer.
According to some sources, U.S. box office receipts dropped from $732 million during the peak year 1930 to $482 million in 1933 – a decline of slightly more than a third; and most of this was the result of lower attendance rather than a change in ticket prices. (A caveat: Since the studios themselves were the main source of such info, the numbers may be unreliable – even more so than now, which is saying something.) This drop was despite the enthusiasm engendered by the new “talkies,” whose introduction happened almost simultaneously with the stock market crash and its ripples.
While there may be lessons from the experiences of 75 years ago, the current situation – the entire culture and technology of entertainment – is different enough that the lessons should be taken with a grain of salt. In the ’30s, the only mass media alternatives for narrative entertainment were radio and reading, both wonderful but not a replacement for the big screen experience. Radio was “free” – unless you count tolerating commercials as a cost – and certainly benefited from movie defections.
Now, of course, the panoply of available entertainment sources is almost beyond comprehension, including a lot that are “free.” Yes, you have to pay for cable, and most of the time you have to pay for Internet access. But cable isn’t a necessity and you can surf the net without cost pretty easily. As much as nothing can replace actually experiencing movies in a theatrical setting, the step down to TV is not as drastic as our grandparents’ step down to radio.
So theater attendance is likely to suffer even more than it did in the Great Depression. But the health of the industry as a whole? Viewers may have a huge number of alternatives, but all the legal ones provide additional revenue streams to the studios. (Estimates of the income lost to the illegal ones are even less reliable than the faded stats from the ’30s: It is in the interest of the MPAA and its members to cite dollar figures in the billions or tens of billions as they try to push the government into stricter piracy laws and yet even stricter enforcement.)
Another big difference from the ’30s is that the studios not only own a piece of the action from the multiple secondary markets (TV, cable, video rental, video sales, pay-per-view, video-on-demand, and the upcoming direct downloading through the Internet), they are also units within vastly diversified corporations. Unless the total cost of a night out at the movies goes down, theatrical distribution may suffer badly – which would be an aesthetic tragedy. But shed no tears for Disney, Fox, Paramount, Warner, Sony, and Universal: They’ve got their asses covered eight ways from Tuesday.
See complete coverage on Holiday Film Issue:
Published: 11/26/2008
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