Some Oscar Night Reading

This week’s Economist features a brief article on the state of Hollywood. Though not a lot will be revelatory to those of us in the space, it does remind us of some interesting trends that many of could hardly imagine just a few years ago.

One example, rumors of television’s demise were premature.

TV is relatively stable and currently lucrative. TV networks earn money from advertising and from the fees that cable and satellite operators pay to carry their programmes. These fees amount to some $32 billion a year in America, and are growing by about 7% annually. People love watching TV, and, per hour, it is one of the cheapest forms of entertainment.

In contrast, film revenues are volatile. Attendance swings like the moods of Claire Danes’s bipolar character, Carrie Mathison, in the TV show “Homeland”. In 2011 American cinemas sold 1.28 billion tickets, the smallest number since 1995.

As studios continue to experiment with new distribution models, and companies like Netflix are getting into the content creation business, both the motion picture and television industries might be in for a period of growth.

 

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