Do more with less. This will be the new mantra for the production, distribution and services sectors of the entertainment industry, whose businesses collectively represent $1 out of every $4 on the public payroll across the Valley. Why? Start with the bottom falling out of the dot-com market in 2000, packing a one-two punch for stocks. Toss in an actor’s strike that never came but left companies with a stockpile of product and ensuing inertia in the production arena. Then came Sept. 11, and with it, fears of flying, fears of spending, fear in general. “It’s been a bumpy two years for the industry, no question,” said Dan Blake, the new Director of the San Fernando Valley Economic Research Center at Cal State Northridge. And things were looking so good. According to the center’s recently released “Report of Findings on the San Fernando Valley Economy,” employment in the entertainment industry in the Valley tripled between the last recession in 1992 and last year, rising from 35,000 to 105,000 and generating a payroll of about $6 billion. The report, released in October, also shows that Valley-based entertainment companies’ share of employment in Los Angeles County increased from just below 38 percent in 1991 to 58 percent by 2000. “It’s a hidden industry, and if you want to think of how big it is in the Valley, it’s just about the same size as the retail trade industry,” said Blake. The Valley’s share of the state’s entertainment employment also increased from 27 percent in 1991 to 41 percent in 2000, a clear indication that, hidden or not, it has become a key piece of the Valley’s economic pie. But even before Sept. 11, the industry began making adjustments to accommodate a slowing economy, and those changes are reflected in the number of new jobs it put on the market last year. Only 1,600 private sector entertainment workers were added to the payroll in 2000, representing only a 1.5 percent increase over 1999, and total payroll figures fell by one third of one percent, according to the CSUN report. “Many of these businesses that make up the industry are faced with the challenge of cutting costs, doing more with fewer resources,” said Blake. “And they were faced with all of these things long before Sept. 11 came around.” “After two years of dreadful business in Los Angeles in many regards, there’s nothing left for many of us to fall back on,” said Rufus Burnham, owner of The Camera House in North Hollywood, a camera rental company that works primarily with the commercial industry. “There definitely needs to be a tightening of the belts, but we’ve been making extraordinary deals for a while now and everybody has to adjust and accept the adjustments that everyone else is making.” Runaway production costs were already starting to take a toll on entertainment service companies in the Valley and elsewhere, and they continue to pose a threat. But the current upheaval in the airline industry has forced many film, TV and commercial production companies to stick closer to home, at least for the time being. Steve Caplan is senior vice president, external affairs for the Association of Independent Commercial Producers (AICP). He said one of the biggest factors driving up production costs is location fees. “There have historically been significant fees charged in locations for private homes and businesses,” said Caplan. Now, we understand this is part of the cost of doing business, but in order to keep the business here it has to be competitive at every level.”
