June/July 2012
Volume 32 No. 4

May 2012
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My Two Cents

The following My2¢ was “exhumed” from a dusty copy of VideoAge’s 1993 June Issue, which then was our L.A. Screenings edition. At that time, the Screenings started May 24 and ended June 10, and only the Latins (excluding Brazil and Mexico) screened together.
While 19 years ago the Screenings took 18 days, today they take 10 days, including the portion reserved for indies. Then,
VideoAge registered fewer than 500 buyers, versus 1,500 today. So the Screenings have evolved, but has anything actually changed? Let’s find out!

This is a review of the yet-to-be released book Great Fortunes: What Film & TV Firms Are Making Today (Real Books Publishing Co., 20 pages) by Jim Brean, an out-of-work consultant.
The author’s premise is that today’s mantra seems to be “These are tough times!” While it’s clear that the writer fully understands the industry, he nevertheless challenges the notion that business is getting tough.

Using data from the Veronis, Suhler and Assoc. reports, Brean compares today’s business environment with the relatively easy-going times of 1989. Revenue of U.S. public filmed entertainment companies was $12 billion in 1989. Five years later, it was estimated at $17 billion; the return on assets for these companies was 4.5 percent. It is not unusual to see companies today with annual growth rates of 15 to 20 percent.

Quoting various studios, Brean reports that advertising TV expenditures in the world’s nine key countries was $50 billion in 1989, compared to an estimated $70 billion in 1993. Television’s share of advertising expenditures is to reach 34 percent this year, versus 33 percent in 1989. The book goes on and on charting the tremendous growth of television and its bright future.

However, Brean could have made the point without boring the reader with a sea of numbers. Suffice it to say that in 1989 just 692 companies attended MIP-TV, compared to 803 this year. During the past four years, at least 20 new TV broadcast networks and 40 cable/satellite TV services have started operating in various parts of the world. Since 1989, the number of transmitted TV hours has increased some 60 percent.

Then, abruptly, Brean pops the question: “Why are these people complaining?” In simple prose, which remains candid throughout the book (if a bit monotonous at times) Brean posits that they are complaining about pressure, not the business itself.

According to Brean, this pressure is applied mainly in four ways. Shareholders: “These guys want to see more bang for their buck,” he writes (i.e. more dividends); therefore, managers have to worry more about saving it, than making it. Management: Ever since companies were taken over by bean-counters, the nit-picking is a constant factor. At this point Brean quotes Robert J. Samuelson, who wrote in Newsweek: “The style of running big companies changed for the worse. The belief that all problems could be solved by analysis favored the rise of executives who were adept with numbers and making slick presentations. Huge staffs of analysts served these executives, who created conglomerates on the theory that a good manager could manage anything.”

Brean also cites all those “hip” Wall Street refugees who are driving the former hippies (i.e. current TV executives) crazy. “Just think,” writes Brean, “the only thing that has changed in one generation is a ‘p-i-e’: from hippie to hip!” He concludes, “Finally, they complain because of something that has been felt only recently: Competition. Unfortunately, this is seen as pressure rather than a challenge.”

So what’s your take? Has anything changed in 19 years?

Dom Serafini