Comments on: Even Silicon Valley And Hollywood Hit by Slowdown (Updated) http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html Sun, 22 Nov 2009 07:56:24 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22678 Anonymous Wed, 22 Oct 2008 21:38:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22678 buzzp and Evilhenrypaulson, I watched a documentary on Turner Classic Movies, as a prelude to the pre-Hayes code festival they organised.<br/>There was a lot of sex and risqué scenes in the US movies from 29 to 34, to attract audiences which were dropping.<br/>It stopped through regulation.<br/>But movies from this period looked a lot like 70s movies, actually. buzzp and Evilhenrypaulson, I watched a documentary on Turner Classic Movies, as a prelude to the pre-Hayes code festival they organised.
There was a lot of sex and risqué scenes in the US movies from 29 to 34, to attract audiences which were dropping.
It stopped through regulation.
But movies from this period looked a lot like 70s movies, actually.

]]> By: dilbert dogbert http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22460 dilbert dogbert Tue, 21 Oct 2008 02:20:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22460 Heard, yesterday, a confirmation of the Sequoia event from a source close to a partner. "Spend each dollar as if it was your last", "Cut and cut deep" "Go Into Survival Mode" was what I remember of the conversation. Heard, yesterday, a confirmation of the Sequoia event from a source close to a partner. “Spend each dollar as if it was your last”, “Cut and cut deep” “Go Into Survival Mode” was what I remember of the conversation.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22457 Anonymous Tue, 21 Oct 2008 01:50:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22457 Another difference between the 1930s and now is that we have videogames and multiplayer online games, which compete for the onscreen visual entertainment dollar, providing a much longer-lasting experience. There's also Netflix, which means old movies cannibalize the market at a much lower price point. Finally, TV didn't exist back then either, nor did Internet porn. People wanting visual distraction from their miseries have a lot more options nowadays. Another difference between the 1930s and now is that we have videogames and multiplayer online games, which compete for the onscreen visual entertainment dollar, providing a much longer-lasting experience. There’s also Netflix, which means old movies cannibalize the market at a much lower price point. Finally, TV didn’t exist back then either, nor did Internet porn. People wanting visual distraction from their miseries have a lot more options nowadays.

]]> By: Lune http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22442 Lune Mon, 20 Oct 2008 21:30:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22442 WRT to Hollywood:<br/><br/>There was a tremendous slowing down of production during the late spring/early summer months. Because there was a very real possibility of a Screen Actors' Guild (SAG) strike, many productions didn't want start filming and risk actors walking out in the middle of an expensive shoot. The only productions that went ahead were indie pics that could secure waivers from SAG in essence guaranteeing that even if there was a general strike, their specific production wouldn't be subject to it.<br/><br/>That decrease in production this summer means many mainstream studios are left with significant holes in their schedules for next year. I'm assuming some of this delaying of completed films is an attempt to plug those holes and/or take advantage of the light schedule likely to be in effect for next year.<br/><br/>While print & advertising budgets for releasing a picture can easily run in the tens of millions of dollars, studios also face financing costs on the production loans that are taken to fund the filming of high budget, mainstream flicks, so there's usually a pressure to release early so as to recoup their money ASAP before interest accruals eat into profits.<br/><br/>So in the final analysis, I'm not sure exactly what has prompted Paramount to delay their scheduled releases. The economics of determining release schedules can be quite complicated. Moreover, this being Hollywood, it could even be some internal battle over artistic differences that might be necessitating a new edit or new filming or something else completely unrelated to money. Unless more studios start to cut output, I'm not so sure Hollywood can be listed as a casualty of the credit crunch just yet. WRT to Hollywood:

There was a tremendous slowing down of production during the late spring/early summer months. Because there was a very real possibility of a Screen Actors' Guild (SAG) strike, many productions didn't want start filming and risk actors walking out in the middle of an expensive shoot. The only productions that went ahead were indie pics that could secure waivers from SAG in essence guaranteeing that even if there was a general strike, their specific production wouldn't be subject to it.

That decrease in production this summer means many mainstream studios are left with significant holes in their schedules for next year. I'm assuming some of this delaying of completed films is an attempt to plug those holes and/or take advantage of the light schedule likely to be in effect for next year.

While print & advertising budgets for releasing a picture can easily run in the tens of millions of dollars, studios also face financing costs on the production loans that are taken to fund the filming of high budget, mainstream flicks, so there's usually a pressure to release early so as to recoup their money ASAP before interest accruals eat into profits.

So in the final analysis, I'm not sure exactly what has prompted Paramount to delay their scheduled releases. The economics of determining release schedules can be quite complicated. Moreover, this being Hollywood, it could even be some internal battle over artistic differences that might be necessitating a new edit or new filming or something else completely unrelated to money. Unless more studios start to cut output, I'm not so sure Hollywood can be listed as a casualty of the credit crunch just yet.

]]> By: Marsha Keeffer http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22440 Marsha Keeffer Mon, 20 Oct 2008 21:10:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22440 I've worked in SV for 10+ years...all the major companies have simply turned off purchasing. Budgets are being slashed. This is not "operating as normal." BTW, a colleague's son is a successful director in Hollywood - 6 months ago he told me his son simply couldn't get a new project funded. Still the same today - LaLa land has dried up. I’ve worked in SV for 10+ years…all the major companies have simply turned off purchasing. Budgets are being slashed. This is not “operating as normal.” BTW, a colleague’s son is a successful director in Hollywood – 6 months ago he told me his son simply couldn’t get a new project funded. Still the same today – LaLa land has dried up.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22439 Anonymous Mon, 20 Oct 2008 21:09:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22439 "a" is correct. <br/><br/>Par is postponing those films because the appetite for them is apparently lacking:<br/><br/>Beverly Hills Chihuahua led weekend grosses for 2 weeks (& only dropped to 2nd this week) against better dramas/thrillers with big names.<br/><br/>& this week's #1, MaxPayne, is a video game adaptation popular with the teen-boy segment of the population who don't care about current events: definitely not the audience Par is courting with The Soloist or the R-rated Ed Zwick Defiance.<br/><br/>InquiringMind "a" is correct.

Par is postponing those films because the appetite for them is apparently lacking:

Beverly Hills Chihuahua led weekend grosses for 2 weeks (& only dropped to 2nd this week) against better dramas/thrillers with big names.

& this week's #1, MaxPayne, is a video game adaptation popular with the teen-boy segment of the population who don't care about current events: definitely not the audience Par is courting with The Soloist or the R-rated Ed Zwick Defiance.

InquiringMind

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22418 Anonymous Mon, 20 Oct 2008 15:45:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22418 New production by the big guys is crazy-expensive and quite risky.<br/><br/>Better, safer profits lie in:<br/><br/>1) Repackaging older films from the vaults for HD/home theater. Big difference from the pre-television 30s.<br/><br/>2) Buying up festival hits that only need promotion. At least you can see what you're buying--at a fraction of the cost/risk of a mega-production.<br/><br/>3) Extending properties with established fanbases (the comic book franchises should continue to proliferate).<br/><br/>And file sharing is the wolf scratching at the door (the music biz having already been digested).<br/><br/>Bad times. New production by the big guys is crazy-expensive and quite risky.

Better, safer profits lie in:

1) Repackaging older films from the vaults for HD/home theater. Big difference from the pre-television 30s.

2) Buying up festival hits that only need promotion. At least you can see what you’re buying–at a fraction of the cost/risk of a mega-production.

3) Extending properties with established fanbases (the comic book franchises should continue to proliferate).

And file sharing is the wolf scratching at the door (the music biz having already been digested).

Bad times.

]]> By: mndean http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22413 mndean Mon, 20 Oct 2008 15:16:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22413 I wouldn't make too many comparisons about Hollywood circa '29-33 and Hollywood now. Very different business models. Remember the big studios were owned by theater chains, and the theaters and studios had a huge technological change to attract the customer - namely sound, which cost the chains a lot of money to refit theaters with and the studios a lot to make sound films. This change started in '29, so the reason for the bankruptcies is a little more complex than just the Great Depression. I wouldn’t make too many comparisons about Hollywood circa ‘29-33 and Hollywood now. Very different business models. Remember the big studios were owned by theater chains, and the theaters and studios had a huge technological change to attract the customer – namely sound, which cost the chains a lot of money to refit theaters with and the studios a lot to make sound films. This change started in ‘29, so the reason for the bankruptcies is a little more complex than just the Great Depression.

]]> By: EvilHenryPaulson http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22401 EvilHenryPaulson Mon, 20 Oct 2008 12:48:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22401 buzzp,<br/>Don't forget that the massive consolidation which kept corporate profits healthy, did so in extracting cost savings from cast and crew. <br/><br/>I do not see many stars being able to negotiate multi-million dollar riders in addition to 10% of sales and $10mn up front. Actors in the 1930s were owned by the studios and management violently opposed labour organizing.<br/><br/>I suspect we will see some of this deflation to happen with pro sports as well buzzp,
Don’t forget that the massive consolidation which kept corporate profits healthy, did so in extracting cost savings from cast and crew.

I do not see many stars being able to negotiate multi-million dollar riders in addition to 10% of sales and $10mn up front. Actors in the 1930s were owned by the studios and management violently opposed labour organizing.

I suspect we will see some of this deflation to happen with pro sports as well

]]> By: EvilHenryPaulson http://www.nakedcapitalism.com/2008/10/even-silicon-valley-hit-by-slowdown.html#comment-22398 EvilHenryPaulson Mon, 20 Oct 2008 12:43:00 +0000 http://www.nakedcapitalism.com/2008/10/even-silicon-valley-and-hollywood-hit-by-slowdown-updated/#comment-22398 david,<br/><br/>We should see 2 things that ultimately are in our favour versus the great depression.<br/><br/>• 'better' bankruptcy laws that do more to realize you cannot get blood from a stone, and poor-houses are illegal. The sooner the debt overhang is gone, the sooner the growth feedback loop can resume<br/><br/>• There will be as Dianne Garnick has said "a tale of two tails". We will see greatly underperforming companies and greatly outperforming companies during a credit contraction. Deals happen a lot faster today than even 30 years ago, so perhaps the culling of weak companies will be quicker to happen. I don't think anti-monopoly laws will interfere much with the process given the general fear and violent interest rate movements <br/><br/><br/>A housing-led recession is the worst variety and a global one is even worse. Still people in certain countries have been living in tougher conditions for the past year than we are close to. They find a way and get through it one day at a time.<br/><br/>The sector this global recession will hit the hardest is the military and its support services. National deficits will hit extraordinary levels without considering growth in military spending. david,

We should see 2 things that ultimately are in our favour versus the great depression.

• ‘better’ bankruptcy laws that do more to realize you cannot get blood from a stone, and poor-houses are illegal. The sooner the debt overhang is gone, the sooner the growth feedback loop can resume

• There will be as Dianne Garnick has said “a tale of two tails”. We will see greatly underperforming companies and greatly outperforming companies during a credit contraction. Deals happen a lot faster today than even 30 years ago, so perhaps the culling of weak companies will be quicker to happen. I don’t think anti-monopoly laws will interfere much with the process given the general fear and violent interest rate movements

A housing-led recession is the worst variety and a global one is even worse. Still people in certain countries have been living in tougher conditions for the past year than we are close to. They find a way and get through it one day at a time.

The sector this global recession will hit the hardest is the military and its support services. National deficits will hit extraordinary levels without considering growth in military spending.

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