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Will Hollywood Recover Its Losses?

Entertainment equals escapism. I have been a movie buff for as long as I can remember. Seeing Gone with the Wind for the first time opened my eyes to how intensely creative filmmaking is. I got lost in the story — the romance between the effervescent Vivienne Leigh and the one-of-a-kind Clark Gable, the horror of the Civil War and the injustice of slavery and racism. The iconic film was released in 1939, long before I was born. Watching a well-produced movie, one gets lost in the scenery and is transported to another dimension.

Given that, Hollywood has been up against the ropes for a few years now, even pre-pandemic. The intervention of streaming in the early 1990s meant that you did not have to go to the theater to see newly released films. A documentary film by David Blair called "Wax" or "The Discovery of Television Among the Bees" was the first movie ever to be streamed online. The plot centered around a weapons engineer who had inherited a beehive from his grandfather — a creative mix of fiction and fact. 

Change and progress are good but often come with a price. You do not have to leave your home to see a new movie. Eventually, it will be available to stream. But for all the concerns raised about how streaming takes money away from the film industry because people won't buy movie tickets, Bloomberg News says that view is skewed. 

Writer Lucas Shaw says that some losses result from inflation. He titled his feature "Last Year Was Brutal for Hollywood. Will 2023 Be Any Better?"

Streaming profited from people being at home for the first two years of the Covid-19 pandemic. But Shaw points out that Avatar made over 1.2 billion dollars in the final two weeks of 2022. That is a great sign. However, the bigger picture still indicates that many movie fans choose to watch films from the privacy and quiet of their abodes. Traditional television networks and cable stations have lost money over the past decade. That is why cable companies promote bundling services for multiple channels, many of which you have no time or interest in.

And of course, the Writers' Guild Strike, which just ended after 148 days of wrangling between the Union and Alliance of Motion Picture and Television Producers, adversely impacted the industry. I am glad that writers' contributions will not be threatened or marginalized by AI. Many writers were justifiably concerned about their futures with the introduction of artificial intelligence in screenwriting. MIT Economist Simon Johnson called the terms of the contract a “fantastic win for writers,” who are crucial to the foundation of the entertainment industry. 

But the SAG/AFTRA Actors' Strike goes on. Union President Fran Drescher will continue talking with AMPTP this week in the hope of settling the strike that is in its eleventh week. 

What was the toll on California's economy? According to CNBC, the cost was a $3.1 billion loss between the WGA and SAG strikes. Ancillary businesses in Hollywood like caterers for production companies, restaurants near studios, professional drivers, florists and more lost business. 

Perhaps the biggest factor for Hollywood's recovery might be sustaining traditional movie theater audiences. That equals releasing more viable films that the public wants to see. It's puzzling that director Stephen Spielberg's newest feature The Fabelmans was not screened in more theaters last year before it was released online. There has been an upward trend in ticket sales but recovery is nowhere near where it was pre-Covid.

In "The Atlantic," David Sims writes a compelling argument for why he thinks Hollywood cannot survive without movie theaters — which I agree with. 

It is pricey to go out to the movies, but nothing compares to surround sound and the ambiance of a theater. And for those on a budget, companies like Regal are offering lower-priced matinees and five-dollar Value Days on Tuesdays here in the Seattle area. Recovery will take time. The industry will not hit the $11.4 billion in box office sales that it had in 2019 any time soon. Experts predict revenue will be more in the $9.5 billion range by the end of this year — by all accounts, a significant loss. Hollywood is undoubtedly starting to gear up for Christmas releases,  which typically sell well.

The opinions expressed in this article are those of the individual author.


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