HOLLYWOOD — There is no Hollywood ending in sight in 2009 for the entertainment industry, which along with the rest of the nation is experiencing its worst economic slump in decades.
The fallout from declining local TV ad revenue, weakening DVD sales and diminishing sources of film financing will continue to pound Los Angeles’ signature industry, which employs more than 200,000 people and pumps an estimated $20 billion to $30 billion into the local economy.
Many people expect that will trigger further layoffs at the studios, networks, independent production outfits and other media companies on top of the thousands of job losses that have occurred in recent months. Industry executives contend that the steep downturn will force Hollywood to change the way it does business.
“You can eliminate all the limos and velvet-rope events you want,” said former studio executive Marty Kaplan, director of the Norman Lear Center and research professor at the University of Southern California Annenberg School for Communication. “But if you’re still spending $100 million on pictures that have little chance of being hits, you’re in a business that is inherently nuts.”
Compounding the angst is the threat of another industry strike, this time by the powerful Screen Actors Guild, which would halt most movie and prime-time TV production and throw tens of thousands of actors, technicians and others out of work. Estimates of how much last year’s strike by screenwriters cost the local economy vary widely, from $380 million to $2.5 billion.
One study concluded that the strike led to the loss of 37,700 jobs in California tied to the entertainment industry.
“It’s not business as usual,” said Marc Shmuger, the chairman of Universal Pictures. “We are all facing economic uncertainty, and (2009) is going to be tough. We are deep into a recession. None of us have been here before.”
