The job market in entertainment is continuing its decline this year, and the prospect of labor unrest may accelerate the slide.
A total of 117,000 people are working in Hollywood now, down from 146,000 in the peak year, 1999, says the Los Angeles Economic Development Corp.
Some 1,500 jobs will be lost this year and another 2,500 in 2005.
Piracy and runaway production are exacerbating the dwindling of the job market, and the possibility of work stoppages in coming months would make matters much worse.
“This is the Los Angeles area’s signature industry, and it is also at major risk,” the study said. “The industry is in the midst of ongoing labor unrest, there is the growing threat of piracy and the longstanding threat of runaway production. While most people focus on production going overseas, a bigger threat may be production going to other states.”
Report rated showbiz a C+, downgrading the industry from the B- it issued in February.
The study also noted a recent sample of major productions showed 24 were shooting in Los Angeles, six were elsewhere in California, 38 in other states and 24 in foreign locations.
Bright spots include the strength of the DVD market, which hit $16.3 billion last year as the overall sector, including videocassettes, reached $22.2 billion; the move by TV networks toward year-round programming; the increase of original programming on cable nets; increases in box office and advertising; and the prospect of legislative help next year from Gov. Arnold Schwarzenegger.
Schwarzenegger indicated earlier this year, when he announced the appointments of Clint Eastwood and Danny DeVito to the state film commission, that he would push for tax credit legislation. But LAEDC chief economist Jack Kyser admitted the governor will face a serious challenge in overcoming public skepticism about the value of such a bill.
“Opponents of that kind of legislation are often willing to portray the film industry incorrectly as a business where everyone gets a $20 million paycheck,” Kyser noted. Meanwhile, he said, foreign governments and other states have shown no sign of backing off from offering lucrative incentives to lure producers from Hollywood.
The labor unrest stems from a combination of factors. Writers Guild of America members continue to work under an expired contract after negotiations with companies stalled in early June over issues such as DVD residuals, health care contributions and jurisdiction over reality TV. The DGA is expected to launch negotiations in early fall, followed by SAG and AFTRA broadcasters and newscasters; the DGA and SAG have a June 30, 2005, contract expiration while AFTRA’s network code pact expires Nov. 15.
Authors of the study said broadcasting jobs would slide by 600 this year to 17,200 and drop 200 more in 2005. They also predicted continued growth of jobs in the “independent artists, writers and performers” category, with 600 new slots this year and 300 next year for a total of 11,100.