Happy ending still far off for film industry

HOLLYWOOD - There is no Hollywood ending in sight in 2009 for the entertainment industry, which 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 expect 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 USC 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 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.

“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.”

Studios also are scaling back the number of movies they are making, and some say they are cutting back on traditional Hollywood perks such as lavish premieres, first-class and “entourage” travel, limo services and hair and makeup sessions.