Clouds Gather over Film Industry as Oscars are Handed Out
By James Hirsen
Last night, as the 85th Annual Academy Awards Ceremony was taking place right in the heart of Hollywood, an anxiety was growing within the entertainment business. Despite the much-ballyhooed box-office figures, the traditional movie business model is facing a grim prognosis in terms of its ability to generate future revenues.
After sinking in 2011 to the lowest movie audience tally seen since the mid-1990s (1.3 billion), the industry shifted into panic mode. Then last year’s box office numbers managed to provide Hollywood studios with some relief, thanks to a number of blockbuster hits. Audiences grew to 1.36 billion and gross revenues hit $10.8 billion. The simple truth, though, is that in business profit truly matters, and despite the penchant that film studios have for making highly visible “tentpole” pictures, the growth rate of profits has been taking a pounding. [more...]