Recession bites – but the show must go on

Wednesday, August 26, 2009 | Posted by: Fiona Cullinan
Categories: Media sector | Tags: Alex Connock, entrepreneurs, recession, media, diary, Ten Alps, Hollywood, content, internet, free, Entrepreneur’s Diary

Alex Connock, CEO, Ten Alps: LOS ANGELES – This week, many of the people around the pool at the Beverly Hills Hotel, a bellwether of American showbusiness even before The Eagles put it on the cover of Hotel California, seem to be North London property developers. One I know said there was so little business at home that he had taken his family on a six-week tour of America. That’s the way to play it.

But for Hollywood itself, there is just gloom. The LA Times is full of downturn and the challenges of free content online. Almost everything in US entertainment has dropped – from indie cinema backing to adult video pay rates, via Las Vegas construction, TV drama commissioning and commercials production budgets. This is an equal opportunity recession.

In fact the LA Times itself, like so many newspapers, is existentially challenged by a decline in newsstand sales. The challenge of being free online but with a print-edition cost base is academic – because there are free print copies everywhere as well.

In the streets, recession and the impact of the internet are plain to see.

Just next to the Sunset Strip there are stores for rent, and Tower Records, the iconic record shop, has long gone – done in by the iTunes generation.

An LA-based commercials director friend is off to shoot in New Zealand – because NZ actors can be bought out rather than being paid residuals.

A TV producer friend living in Laurel Canyon – legendary haunt of the 70s rock generation – can buy a great house overlooking the Hollywood sign for less than a two-bed flat in Clapham.

A former star writer on PEOPLE Magazine edits a blog for a local TV station and is told ‘you’re lucky to be working at all’.

A former colleague at a TV news network has watched 20 years of budget cuts and editorial dumbing down, to the point where there may soon not even be a nightly news at all.

And yet… Everyone thinks this is an inflection point. Movies are booming overseas – Ice Age 3 was a breakout hit, for instance – creating a push in Hollywood to prioritise global over the now smaller domestic markets. The property market has turned. Vegas is cheap, but filling up.

Hollywood post-recession will be more online and more global. I’m guessing the Londoners will soon go home and the Beverly Hills Hotel will be back to showbusiness as normal. At that point, I won’t be able to afford it.

You can catch up on Alex’s previous posts from our Entrepreneur’s Diary series, in which we follow a male and a female CEO to discover what life is like behind the scenes of their business.

Image: © Mike Finkelstein