DVD sales represent bright spot for industry

Reflecting the ongoing negative impact of runaway production and piracy, Hollywood showbiz jobs will decline by 2,500 this year to 111,100 and another 1,500 slots in 2005, according to a Los Angeles Economic Development Corp. study released today.

“The employment outlook for the industry in 2004 will continue to be less than inspiring,” said Los Angeles Economic Development Corp. The report rated showbiz a B minus but added that the grade could be lowered if current contract negotiations with SAG and AFTRA and upcoming talks with the Writers Guild bog down.

The one bright spot in 2003 for the entertainment business was the homevideo business. Sales of DVDs hit $16.3 billion while the overall sector, including videocassettes, reached $22.2 billion. “This is where the gravy is and what makes the industry so nervous about piracy,” write the authors of the study.

The job declines are relatively small compared with the loss of 32,400 showbiz jobs between 1999’s peak of 146,000 and the 2003 figure of 113,600. Jack Kyser, chief economist for the agency, said the key reason for the decline stems from the constant drain from producers taking advantage of less expensive offshore locations, coupled with foreign government incentives.

Kyser also said prospects are dim for any legislative relief on runaway production due to the massive deficits at the federal and state level.

The report said job losses in 2004 and 2005 will be minimized by several factors — advertising for the Olympics and presidential election, continued DVD growth and increased demand for original cable programming. Authors of the study also predicted continued growth of jobs in the “independent artists, writers and performers” category, with 1,200 new slots this year and 1,400 next year for a total of 13,600.

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