The entertainment sector continues to show stable or increasing profits during recessionary periods. The Great Depression of the 1930’s is also known as The Golden Age of Hollywood. Why do so many people choose to increase their spending on entertainment during a recession?
According to Michael Brush, the entertainment sector is seen as a bright spot amid the economic downturn. Spending in the entertainment sector, specifically cinema ticket sales and gaming, tends to increase in difficult financial times. People want to escape the reality of the situation and focus on something other than the current dire situation. The decrease in income leads to replacement of ‘expensive’ pastimes by more affordable distractions. Trips to the cinema are a relatively cheap form of entertainment and this has led to a large increase in sales. Retail spending decreased by 10% in 2009, yet 10% more was spent in cinemas.
Movie releases are generating more profit now than ever. Cinema ticket sale records are constantly being broken. Avatar (2009) became the highest grossing film in the world with $2,781,505,847 worldwide box office total. Many movies are breaking records set pre recession. Toy Story 3 generated over a billion dollars in 2010 and is ranked as the fifth highest grossing film of all time by IMDb.
The entertainment sector will continue to grow in this time of recession as people flood to the cinemas. Six of the Top Ten Highest Grossing Films of all time were produced in or after 2007 showing the little effect the recession is having on this sector. With predicted high earners such as the final instalments of the Harry Potter & Twilight series’, and Batman: The Dark Knight Rises set for release in the next two years, this trend can only continue.
References:
http://www.imdb.com/boxoffice/alltimegross?region=world-wide
http://articles.moneycentral.msn.com/Investing/CompanyFocus/potter-and-spock-vs-the-recession.aspx
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