Industry News :: L.A.: Job Growth Expected to Slow

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February 8th, 2006

By Jesse Hiestand

Job growth in Southern California's entertainment economy is expected to slow during the next two years as the industry comes to terms with emerging distribution and production trends, according to a report set for release Wednesday.

In its 2006-07 business forecast, the Los Angeles County Economic Development Corp. sees the mixed results of 2005 continuing for at least the next year.

"The level of challenges that the industry is facing right now is just huge," chief economist Jack Kyser said. "We are in a transition period, (and) technology is definitely impacting the industry. But at the end of the day, people still want good content, they just want it in different ways and on their own terms."
Video-on-demand and mobile entertainment are two of the new opportunities, but they also threaten traditional business models and network broadcast television in particular, Kyser said.

Last year's box office slump and signs of cooling in the DVD sell-through market came as some directors and producers started to experiment with day-and-date film releases, alarming theater owners with the prospect of a film being released simultaneously on DVD, television and the big screen.

A cyclical trend toward reducing film slates and constant pressure from other states to attract production with incentives also have put pressure on the local job market, Kyser said.

There also is concern that Hollywood's unions will be more aggressive in seeking a greater share of profits, whether through DVD revenue or mobile video downloads, in contract talks that are staggered throughout the next two years.

SAG is in talks with cable operators over its basic cable and cable animation agreement. The union's commercials contract with advertisers separately expires in October; the renegotiation of this contract in 2000 sparked a six-month strike, the longest in SAG's history.

Kyser said it was a setback that California lawmakers failed to enact a production incentive last year, but he is hopeful that it will find sufficient support this year.

The greater Los Angeles area has benefited from increased television production, said Kyser, who also found it encouraging that there has been more emphasis on scripted shows, as opposed to lower-budget reality TV.

As last year, 134,350 people were working in the area's motion picture and sound industries, according to the California Employment Development Department and LAEDC forecasts. That was up 4.3% over 2004, but the rate of growth is forecast to slow to 3.9% this year and 3.2% in 2007.

An estimated 11,125 people worked as independent artists, writers and performers last year, up 4% over 2004. That is expected to grow 4.3% this year before falling to a 3.4% growth rate in 2007.

Employment among cable and radio and TV broadcasters stood at 19,283 last year, a 3.4% hike over the previous year. That rate of growth is forecast to fall to 1.6% this year and 1% in 2007.