No matter where you turn these days, all you hear about is the "R" word: recession. From The Wall Street Journal to The Hollywood Reporter -- recession, recession, recession. Is it really time to panic? Maybe. Then again, maybe not. With the Commerce Department reporting this week that gross domestic product growth slowed in the fourth quarter to 0.6% growth compared with a rate of 2.2% for the year, it seems that Hollywood is now abuzz with something new to talk about. But is it warranted?
I have spent the last couple of days scouring data sources, looking for any analysis that can shed some light on the matter -- looking to the past to get a better understanding of how entertainment weathered the economic storms. I focused on motion pictures since there is information going back over 6o years. All data is from the U.S. Census Bureau Service, BoxOfficeMojo.com and WorldWideBoxOffice.com
· From 1999 through 2003, personal consumption expenditures in motion picture theatres rose from $7.9 billion, $8.6 billion, $9 billion, $9.6 billion and $9.9 billion respectively. While not huge growth, this did occur amidst the major economic downturns of 9/11 and the dot-com bubble bursting.
· Going back to the 1970s and 1980s and looking at the effects of the 1973 oil crisis and 1979 energy crisis s for signs of serious downturns in entertainment expenditure, again motion pictures data show a much rosier picture than one would expect, with domestic gross growing from $807.7 million in 1974 to $3.39 billion in 1984.
· And looking back at one of the worse economic downturns in U.S. history, from the crash in 1929 through the Great Depression and up until 1940: in 1933 there was a total of $406.5, in 1937 $508.2 million, and in 1939 $673 million.
I think the point that I am trying to make is this: as opposed to focusing on the "what-ifs," let's look at "what has happened," meaning this is what has happened in the past and here is how we can protect, benefit from, tweak, leverage, etc., this time around and into the future. While I am not dismissing that the "R" word might actually be around the corner, perhaps it would behoove the entertainment and advertising industries to employ the "O" word: opportunity.