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# Industry forecast not great, but not bleak either
- URL: https://www.smdp.com/industry-forecast-not-great-but-not-bleak-either/
- Published: 2002-04-02T16:00:00.000Z
- Updated: 2026-10-23T00:13:04.000Z
- Author: Guest Author
- Tags: Business, Santa Monica, #archive-import

*LAWSUIT, from page 1 Loss of productions a key issue in UCLA conference*

*By CHRIS YOUNG Special to the Daily Press*

The outlook for the entertainment industry in Los Angeles is not exactly rosy, but it isn’t dire either, according to UCLA’s Anderson Forecast.

Collective bargaining in 2001, a rush to finish current projects before the potential strikes and film and television productions being shot outside California and the U.S. caused 17,000 people to lose their jobs last year.

That amounts to a 12 percent loss of entertainment industry positions in L.A., according to the Forecast, which was held its quarterly economic conference Wednesday at UCLA.

“Employment growth will be low or slightly negative, but won’t continue falling at the rate it did in 2001,” said Christopher Thornberg, senior economist for the Anderson Forecast.

In the Los Angeles area, employment growth will be slow in 2002, with jobs in business services and motion pictures stabilizing but not substantially increasing, he said. Thornberg predicted that movie production will continue to fall, but other kinds of production, like TV and music, will remain.

As more movies are being shot and edited outside California, production jobs will leave L.A., though studio headquarters and management will likely stay, Thornberg said.

Numerous panelists pointed out that 3 of the 5 nominations for best picture at the Oscars last Sunday were filmed outside the U.S., and all five were filmed outside California.

“Los Angeles needs to create a friendlier atmosphere for entertainment businesses, now that people have choices where to produce movies,” said Jean Prewitt, president of the American Film Marketing Association. “Tax incentives would help.”

> “Los Angeles needs to create a friendlier atmosphere for entertainment businesses, now that people have choices where to produce movies.” — — JEAN PREWITT American Film Marketing Association

Los Angeles Mayor Jim Hahn said the city is working to resolve issues about productions being shot elsewhere. Tax reform, shooting permits, parking, and other costs for small productions are being offered to studios to encourage them to stay.

“With the Academy Awards last Sunday, there’s been a resurgence of interest in Hollywood — a want to keep the businesses here,” Hahn said. “We want to be pro-business.”

Panelists agreed that large changes will happen in film distribution. For one, consumers want on-demand delivery of any movie and the technology to do that is on the horizon. As with Napster in the music world, movies can be pirated from the Internet, although downloads can take a long time.

Studios should include audiences in the movie-making process, said Prewitt. One studio documented a sequel film during the production process and updated audiences by e-mail and the Internet, and the film did better at the box office than anticipated by its predecessors, she said.

“We need to understand our audience. It’s not, ‘If you build it, they will come,’” said Prewitt.

The Anderson Forecast for the nation predicted the U.S. economy will recover from the current recession by business investment, not consumer spending. Historically, recoveries were powered by consumer-spending, which attracted business investment and pulled the economy out of recession.

National growth rates will be 2-3 percent for 2002 and 2003, which is not high enough to lower unemployment but will keep it from increasing, said Edward Leamer, director of the Anderson Forecast.

One main cause of the recession was the Internet rush of 1998 and 1999, according to Leamer. Businesses invested heavily in making websites and start-up companies with poor business plans received lots of capital. But no matter how cool the website, profits didn’t increase, Leamer said.

One example, Internet company Blue Mountain, offered free e-greeting cards. They couldn’t support the site through advertising, so they put in a small $10 yearly fee, said Jeff Cole, director of the UCLA Center for Communication Policy and Entertainment.

“People still wouldn’t pay it,” Cole said. “The question is, is there anything people will pay for?”

*Originally published in the Santa Monica Daily Press print edition on April 2, 2002.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/040202.pdf?ref=smdp.com)