Hollywood feels the HEAT of GLOBAL CREDIT CRUNCH

A myth about Hollywood has been that it is a capable industry that can keep itself unaffected from any financial crunch. However the reality is harsher. In 2008, Hollywood motion picture studios have been pinched by the global financial recession which mostly occurred in U.S due to the extreme stagnation of economy in the realty sector. As economy kept on deteriorating movie studios have felt the pain the even more.

Over the past few houses the major Hollywood studios have started revising their production project plans and restructuring their advertising ways to meet the crisis. Employee lay-offs have also been a part of the measures taken up. As economy is on decline parent companies have felt the heat and thus have gone in to develop risk minimizing plans. As consumers have restricted their expenses and advertising revenues have worsened, parent companies have no other option than this. There has even been heavy job bashing in the industry as Time Warner owned Warner Bros. Pictures smashed 1000 jobs as the 100-day strike observed by Hollywood writers was on. It was estimated that the strike, called by the Writers Guild of America , which suspended work for about 2 weeks , amounted to a loss of about USD 2 billion.

Following Warner Bros. Pictures, NBC-Universal owned Universal Pictures declared a lay-off of about 500 employees or 3 % of its total employee strength while Paramount Pictures, owned by Viacom laid off 850 personnel or 7% of its total staff count.
One major decision that came from Disney was its decision to withdraw its production plans for the third installment of the fantasy series “Chronicles Of Narnia”. Due to the stringent economy high-investment plans are being looked at as high risk-issues. Studios are now operating on a more conservative tone.

The only big good news for Hollywood being the revenue generation has not yet seen any fall compared to 2007. A few blockbusters have fortunately been able to attract huge audiences to the theatres and provided some relief from the depressing economy. “Batman – the Dark Knight “produced by Warner Bros added a cool USD 530 million last summer and topped the box-office charts. Such a figure was last seen back in 1997 when “Titanic” was released. The holiday season towards the end of 2008 even added to the occasion when "Marley & Me," "Bedtime Stories" and "The Curious Case of Benjamin Button," recorded the highest gross revenue ever generated on Christmas Day in the history of Hollywood.