HARD TIMES: When it became apparent, sometime last fall, that we were headed for an extended spell of economic harrowing, the conventional wisdom was that, whatever happened to banks, auto manufacturers, airlines and luxury goods retailers, the entertainment industry would weather the storm.
The basic logic was minted during the Depression, when radio was king and movie theatres were filled every day with people looking to escape the grim world outside with bubbly musicals and screwball comedies set in high society at the top of double bills filled out with cartoons, newsreels and short subjects.
If anyone noticed that the world had changed a bit since the Roosevelt presidency, they didn’t bother saying anything. (And frankly, given the straining comparisons being made between the nascent Obama presidency and FDR, this cognitive fog is starting to look more willful than naïve.)
The “recession-proof” entertainment industry was debunked a bit by a Hollywood Reporter story this weekend that complicated the picture a bit. Some entertainment businesses are doing well – Netflix, for instance, with its move into video on demand subscriptions, and Amazon, thanks to a good holiday season. GameStop, a videogame retailer, has been doing booming business in used games, while Imax has predicted a profit that has done wonders for its stock, thanks to a switch from film to digital, the Imax version of summer blockbuster The Dark Knight, and a revamped business model that shares costs with its joint venture partners. On top of it all, it finally looks like TiVo – the proper noun, not the verb – is about to turn a profit.
Consumers are apparently hunkering down with entertainment options that either cut out costs built into manufacturing and shipping, or offer deep discounts, trends that are expected to continue. “It is possible that the recession could be accelerating the shift to digital,” an analyst from Barclay’s Capital told the Reporter.
It’s the people actually making the product – movie studios and record companies and media conglomerates heavily invested in expensive ventures like TV networks with their large capital footprints – who are suffering, it seems, an irony impossible back in the ‘30s, when the same people owned the content producers and the distribution systems. The biggest change is that audiences are now averse to being in one place at one time to enjoy one thing, and the people making money are the once letting them do that for the lowest price.