They say there is no business like show business. But then there is no business in show business when show business has nothing to show. The fact is what was once considered a recession proof industry is anything but that. Ad revenues are down. Viewership is down. In fact the only thing that may be up is the cost of television and film production.
The entertainment industry is succumbing not only to the economic downturn but the changes in people’s tastes and their use of leisure time. There is slow down in DVD sales. Sources for film financing, in this economic downturn, are getting icnreasingly harder to find. There there are more channels on television, offering more choices and a diluted audience. People have alternate entertainment, be it video games, the Internet with its YouTube’s and Social Networks.
Then there is the cost of making a movie or television episodes. Prevailing theory was much like that of a major CEO. The top people will return your investment. The big time CEO’s will move a company forward and increase its bottom line. Movie and television stars deserve astronomical salaries and a percentage of the gross, because their participation makes the vehicle more atrractive to a larger audience. The vehicle has hit potential and in the overall is still more lucrative.
That was the prevailing theory in both cases. But as we can see, CEO’s ran their corporations into the ground and still wanted hefty compensation for the incompetency. Movie and television stars still believe their participation makes a production a hit. But it is not the case. Few can guarantee a large box office or large viewership. More films and TV series fail, and the high cost of their failure is draining the networks and studios.
Then the consumer must endure the cost of a ticket. Ten bucks in a lot of places. With TV it is the sponsors who must absorb the cost. But sponsors are staying away in droves, and advertising revenue is way down. Couple all this with the capital crunch and you have a pretty dismal forecast for the entertainment industry. Face it, it’s really tough when luminaries like Steven Spielberg cannot find financing for the films he wants to make through his new studio.
So now come the layoffs. NBC Universal, Viacom, Sony Pictures. Studios and networks are looking to cut costs wherever the can. There is a mandate to make cheaper films, but it is tough when stars still demand their hefty salaries. Last time there was an economic downturn the studios compensated by laying off more of their staffs than they should. Production and administration proved unwieldy, and the films, television shows, and the facilities themselves suffered from the job loss.
It is clear while they are laying off workers, studios don’t see this as the solution. It is just the way to stop the bleeding. While cutting back on production, fewer films, fewer television series, the studios and determining new ways to make product for cheaper. Which means salary cuts. As with the CEO’s in other industries, we have seen that this is not an easy thing to do.
