Their Q1 results have been depressing, but past experience says that recession means better results for Hollywood studios this summer
The final settlement (on February 12th) of the
100-day Writer’s Guild Strike may have brought smiles to the face of the striking labour unions; but the strike itself has spelt a lean period for Hollywood goliaths. Major Hollywood studios and television networks have reported bleeding balance sheets for the quarter ended March 2008 (we took into account revenues and profits from the movie and/or TV business only). Paramount Pictures received the biggest setback, witnessing a 37.58% drop in revenues (to $11.4 billion), with losses to the tune of $63 million. Other biggies of tinsel town, including Disney, NBC Universal, 21st Century Fox and Warner Bros were destined with a similar fate (see box).
Some blame the ongoing US recession for the bad results, but hold your horses. History stands testimony to the fact that during recession time, movie spends and attendance goes up. This economic anomaly was first observed during the ‘Great depression of 1929’ and has ever since repeated itself time and again. Sample this: In 1974-75, the US economy slimmed by 0.5% and 0.2%, respectively, and the annual box-office spending shot-up by 25% and 11% (major hits during this time: Jaws and The Towering Inferno).
The final settlement (on February 12th) of the
100-day Writer’s Guild Strike may have brought smiles to the face of the striking labour unions; but the strike itself has spelt a lean period for Hollywood goliaths. Major Hollywood studios and television networks have reported bleeding balance sheets for the quarter ended March 2008 (we took into account revenues and profits from the movie and/or TV business only). Paramount Pictures received the biggest setback, witnessing a 37.58% drop in revenues (to $11.4 billion), with losses to the tune of $63 million. Other biggies of tinsel town, including Disney, NBC Universal, 21st Century Fox and Warner Bros were destined with a similar fate (see box).Some blame the ongoing US recession for the bad results, but hold your horses. History stands testimony to the fact that during recession time, movie spends and attendance goes up. This economic anomaly was first observed during the ‘Great depression of 1929’ and has ever since repeated itself time and again. Sample this: In 1974-75, the US economy slimmed by 0.5% and 0.2%, respectively, and the annual box-office spending shot-up by 25% and 11% (major hits during this time: Jaws and The Towering Inferno).
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