almost welcomed them. During the Great Depression, people continued to turn to the movies for escape. VHS rentals boomed during the recession of the early 1980s, while DVDs got a boost from the downturn earlier this decade.” Plus, during economic crises the entertainment industry has always come up with new ways to stimulate business. In the crisis of the early ’80s cable TV came to the rescue. In the early ’90s, home video was the savior. In 2001, it was DVDs. Now, it’s digital media. Indeed, despite hard times, it seems that no one is cutting broadband service. Broadband is resilient, which is causing a surge of digital media revenues. According to some analysts, in troubled economies, movie tickets and premium cable channels are the first to go among media options. But in the view of an HBO spokesperson quoted in The New York Times , “Pay-television has performed very well in previous downturns.” The Orlando Sentinelwrote that Florida cable provider “Bright House’s On-Demand movies are up significantly as people try to save money by not going out to the movies.” Still, despite all that, don’t count movies out just yet. During various crises the movie business hasn’t stayed idle, either. At one time it responded with a widescreen format and now is facing an economic downturn square in the eye with 3D, or stereoscopic, technology. This year, a dozen or so 3D films are scheduled for release, with another 30 in various stages of gestation. By 2011, it is expected that 40 3D movies will be released in a single year. And, according to some reports, going stereoscopic adds only about 10 percent to a movie’s production costs. It is said, however, that it is important to view stereoscopic movies as a way to bring more people to cinemas, not as a way to charge more than the already exorbitant ticket costs. If a ticket price increase for 3D movies is unavoidable, perhaps distributors should plan to exhibit the movies both in 2D and 3D and let moviegoers decide which they would rather pay for. It has been pointed out that, whatever movies do, television does it better, therefore several TV set manufacturers, such as Phillips and Samsung, are already planning to introduce 3D TV sets. In the U.K., BSkyB is testing 3D TV. In Japan, satellite TV network BS11 of Nippon BS Broadcasting (part of NTV network) already transmits in 3D, and, in Europe, Phillips is working on a 52-inch autostereoscopic (glass-free) TV set. For the television industry it’s a natural progression: First black-and-white TV, then color, then HD, and now 3D. And regardless of how new the concept might seem, 3D was actually invented in 1840. Like with any crisis, the television industry has to adapt to audiences’ newfound moods and tastes. One of the U.S. casualties of the current economic downturn seems to be the television drama, first because of the production costs involved and second because viewers like to laugh during troubled times. As such, dramedies will fare better, while comedies are poised to rise from the ashes. And yet each new crisis brings new opportunities, at least for the film and television industries. VideoAge, for example, was born in New York City in 1981 in the midst of a recession in which the U.S. federal government raised interest rates to 18.87 percent for prime rate (interests charged to banks). Inflation was 10.35 percent, unemployment was 10.8 percent and the Dow Jones average (stock index of 30 large companies) went down 24 percent. In 1981, inflation in Argentina reached 600 percent. Notes of one million pesos could barely buy a soda bottle. That same year, Poland declared martial law and, in 1982 Argentina went to war with Britain over the Malvinas (Falkland) islands while the Iranian oil crisis crippled Mexico. At the same time, in the U.S., 134 movies were released, grossing close to $2.35 billion, versus 133 movies the previous year, which maintained the prior year’s grosses. Total cable TV ad sales reached $121 million, compared to just $72 million the year before. For its part, NATPE 1982 stayed the course with small increases in both exhibitors (262) and attendees (5,551) from 1981. We also tend to forget the 1973-75 U.S. oil crisis, when OPEC raised oil prices, causing oil and gasoline shortages and the price of a gallon of gas went up 233 percent in just one year. But going back to the various crises as seen through the pages of VideoAge , the 1990-1991 recession caused 653 U.S. banks to fail, the Dow Jones was down 21 percent and prime interest rates reached eight percent. The world was in the midst of the Gulf War and Japan’s Nikkei (stock market) Index went from 40,000 points to 13,000. Psychologically, the biggest impact to the TV sector in 1991 was the Gulf War, which affected NATPE and the Monte Carlo TV Market the most. The eerie empty aisles are still impressed on the memories of the few NATPE participants who remained on the New Orleans convention floor. Similarly, few Americans ventured to the subsequent Monte Carlo TV Market, but everything bounced back as if nothing had happened in time for MIP-TV in Cannes in the spring. Nonetheless, in the U.S. in 1990, 197 movies were released, up from 193 the previous year, while the box office increased by $251 million to close to $4.38 billion. In 1990, worldwide home video rentals and sales of U.S. programs increased to $3.48 billion from the $3.13 billion of 1989. During the 2001-2003 recession, V I D E O • A G E JA N U A R Y 2 0 0 9 (Continued from Cover) Ups And Downs 38 (Continued on Page 40) OTHER 1981 WORLD EVENTS IN THE TV INDUSTRY • VideoAge was born in New York City in September as “The Business Journal of Television.” • Universal Studios and Walt Disney Studios brought a lawsuit against Sony’s Betamax over the issue of consumers recording broadcast transmissions; the act was found to be illegal. • French president Francois Mitterrand proposed setting limits on U.S. programming in France. • Overseas TV sales brought an estimated $300 million to U.S. companies. • Coca-Cola acquired Columbia Studios. • Advertising expenditures on the three U.S. TV networks totaled $5.5 billion. • Despite economic difficulties, Brazilian TV revenues were expected to reach $2.2 billion. • The three U.S. TV networks claimed 85 percent of audiences. • Banff had its second annual TV Festival after a one-year hiatus. • In France there were only three TV networks (all public), while in West Germany there were just two TV networks (both public). • Italy was the second largest TV market for the Americans, after Canada. • In the U.S., 26 cable networks were in operation. • Buyer registration at MIP-TV was 200. • For the first time in five years, one-hour dramas outnumbered comedies. OTHER 1990 WORLD EVENTS IN THE TV INDUSTRY • E! launched its 24-hour entertainment network in the U.S. • The International Sports and Television Convention debuted in Monte Carlo (it was later renamed SPORTEL). • Cable expanded throughout Europe. • Studio output deals were all the rage with international broadcasters. • International co-pros were the talk of TV markets. • Video ratings meters were introduced in Puerto Rico. • Though U.S. networks cut back on kids’ TV, it was still big business for independent stations, cable and home video. • VideoAge published its first Russian-language insert. • Post-Communism, Mikhail Gorbachev called for independent TV stations and the end to single-party dominated broadcast monopolies. • Plans were in place for the Soviet Union’s first independent satellite television network. • Soviets moved from all-barter deals to hard currency deals when buying international product. • HBO launched Comedy Channel. • Leo Kirch Group acquired more shares of German private TV network Sat 1, controlling a total 55 percent of the company’s shares. • NHK Japan Broadcasting Corp. established its own U.S. syndication and marketed programs to U.S. buyers. • TV4 was the newest kid on the Swedish commercial TV block. • Germany was reunited. East German TV facilities were expected to dissolve and become integrated. • Distributors used MIPCOM and MIFED to talk to German buyers about changes in the territory. • Sky Television merged with collapsed rival British Satellite Broadcasting to form British Sky Broadcasting (BSkyB). • Rupert Murdoch’s BSkyB bought rights to England’s Premier Soccer League games, cutting into a pie held exclusively by ITV and the BBC.
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