Hollywood’s fortunes fade as internet shines

Tinseltown is set to become Tinseldown after across the board declines were registered across the entertainment industry last year.

The gloom descended after figures showed discretionary spending had taken a tumble in America throughout 2010, with CDs, off by 19% and DVDs, down 13%.

In some of the more telling statistics even videogames, which ordinarily shrug off recessions, took a hit and there was even a net loss in the number of pay TV subscribers – the first in the industry’s history.

It wasn’t just home entertainment which suffered though with concert and theatre ticket sales also registering declines.

Hollywood is already eyeing ever more rapid technological advances with apprehension with some seeing the increasingly downbeat figures as harbingers of the same whirlwinds which have already wreaked havoc in music and newspaper industries.

Analysts see Hollywood as being caught in a pincer movement between advancing technology giving people cheaper and easier ways to get their entertainment kicks and tough economic times prompting many to forego leisure purchases.

This penny pinching approach is seeing increasing numbers of consumers ditch expensive DVD purchases and use online rental services such as Netflix and high speed broadband instead.

Craig Moffett, an analyst with Sanford C. Bernstein & Co, is one of many who is sceptical that Hollywood can adapt to the growing clout of the internet. Moffat said: "The jury is still out on whether there is a digital model that can replicate the profitability of the old linear model. Nobody has cracked the code for online profitability."

Image taken by Rupert Ganzer

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