Showbiz sees bright spot in ad market

Spending on rebound but jobs struggle not over

Here’s the good news: Forecasters expect showbiz companies to step up hiring in the first quarter, and the latest employment stats show that job losses are down, with unemployment rate dipping slightly to 10%.

The bad news: We’re not done with layoffs and upheaval yet.

Entertainment companies will continue to adjust to technological change and fallout from the worst recession in decades during the coming year, predicts veteran economist Jack Kyser. Ownership changes at NBC Universal and perhaps MGM will only add to the uncertainty caused by layoffs and reorganizations at various entertainment companies over the past year.

“It’s been a rough go for people in the entertainment industry,” says Kyser, founding economist of the Kyser Center for Economic Research at the L.A. Economic Development Corp. “We’re starting to feel better and see more green shoots.”

Among the encouraging signs: The ad market has started to rebound.

According to a study by Advertiser Perceptions last month, optimism about ad spending has reached the highest level since fall 2007, before the credit crunch hit. The survey indicated conditions are improving for all media — even beleaguered newspapers and magazines — and especially for online and mobile media, for which conditions are bullish. Cable TV was also up since the org’s spring survey.

An improved ad market is key to the health of entertainment congloms, which have been hit hard by plummeting advertising coin and DVD purchases in the recession. A booming box office can only go so far against such deficits. The decline has been especially hard on ad-supported sectors such as publishing and broadcast TV.

Given the lingering uncertainty, companies — some of which are still finalizing their 2010 budgets — are skittish about forecasting their hiring plans. Comcast, for example, expects to increase its hiring in 2010, but it’s unclear how its proposed acquisition of NBC Universal from GE will affect the overall picture; there surely will be some layoffs. Disney is in the midst of its own transformation, begun with the ouster of Walt Disney topper Dick Cook in September.

“People forget that the entertainment industry is changing rapidly due to technology,” Kyser notes.

However, he expects production to increase in 2010 as companies prepare for guild contract negotiations and take advantage of L.A. County incentives. Stimulus coin should boost the overall economy, he adds.

Tina Price can attest to the fact that entertainment companies are indeed hiring. The founder of Creative Talent Network organized her first job expo for animators last month in Burbank. The Nov. 19-21 event drew 20 recruiters from companies including Disney, DreamWorks Animation and Sony, and more than 2,000 attendees. According to Price, a former animator who worked at the Mouse House for 25 years, several have already landed jobs.

“I was totally pleased and proud,” she says.

Where animators once stayed at studios for their entire careers, now they are hired on a per-project basis, she notes, making networking more vital than ever.

“My take on it is we are in the middle of transition globally and locally,” Price says. “I’m not sure where it’s going to land, but I’m very, very optimistic. There are more opportunities for talent than ever.”

According to PricewaterhouseCoopers, 42% of CEOs for private companies plan to add to their workforce in the next 12 months.

That’s a healthy jump from the prior quarter’s 34% by private companies and slightly less than last year’s 48%.

The heaviest media layoffs began in January, after fourth-quarter earnings results came in below expectations.

Disney-ABC TV laid off 400 staffers that month, for instance, and Warners called for a 10% cost reduction studiowide.

According to PWC, 10% of the CEOs surveyed plan to reduce staff in 2010, slightly more than the amount predicted a year ago. Indeed, recent layoffs by A&E TV (in the wake of its Lifetime merger), Current TV, Time Inc. and the New York Times indicate the hard times are far from over for many in the media biz.

A number of forecasters expect hiring to lag significantly behind the recovery.

Some companies are filling positions with younger workers through internships, even as they continue to lay off experienced staffers.

Kyser predicts more losses and a rising unemployment rate before it gets better.

“We are going to continue to struggle into the first quarter of 2010,” he says.

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