March 27, 2002

UCLA's Anderson Forecast Conference Examines the Forces Altering the Business of Hollywood

Leading entertainment executives and Hollywood industry gurus from all over Southern California addressed the changing landscape of Hollywood as the nation's entertainment headquarters at the quarterly UCLA Anderson Forecast Conference held March 27 at UCLA Anderson.

More than 300 attendees filled Anderson's Korn Convocation Hall for the conference titled, "Entertainment: L.A.'s Most Important Industry," which featured speakers Jim Hahn, mayor of Los Angeles, Jeffrey Berg, president of International Creative Management, Jean Prewitt, president of American Film Marketing Association and Cody Cluff, president of Entertainment Industry Development Corporation.

Berg, the morning keynote speaker said Hollywood will remain show business's financial and administrative center, but will continue to lose film production opportunities as the forces of globalization impact the region.

"Artists are now global artists; they don't necessarily live here anymore," Berg told the crowd during his keynote, "The Cluster We Call Hollywood."

Berg noted that the industry began changing two years ago when financing grew far more complex than ever before, and studio ownership shifted to mega-conglomerates.

"Studios today are principally sources of financing, marketing and distribution," Berg said.

Mayor Jim Hahn of Los Angeles also made a keynote appearance at the conference, emphasizing the key role that entertainment plays in the L.A. economy and his commitment to maintaining its position as the industry headquarters.

"I want to do whatever I can to create the kind of business environment that is going to nurture the entertainment industry," Hahn said. "An environment that is going to keep all of the jobs and the small businesses here because it is so important to the L.A. economy."

The conference also featured two timely panel sessions focusing on how technologies shape the business of entertainment and the effect that runaway production has on Hollywood.

Economists with the UCLA Anderson Forecast found that Los Angeles County's entertainment biz lost nearly 18,000 jobs over the past year due to the combined effects of the de facto strikes, runaway production and the recession.

Christopher Thornberg, senior economist with the Forecast, said the 12 percent drop in industry employment is similar to the plunge in aerospace jobs in the early 1990s. But he said it hasn't registered a similar shock on the regional economy because the entertainment industry is fundamentally healthy.

"Were evolving from a production center to a design center," Thornberg said. "But that's not a bad thing."

As customary, quarterly reports on the nation and California were also presented at the conference.

Edward Leamer, director of the UCLA Anderson Forecast and author of the national report, "This is Our First Business Cycle," predicted that the national economy is looking at a very sluggish period ahead with no obvious driver to power an economic recovery.

Leamer notes that past recoveries have been fueled by consumer spending on goods and real estate-- essentially "consumer cycles" driving the economy.

"This time it is virtually impossible that consumer spending will power the economy in 2002 and 2003," Leamer said. "Consumer spending hasn't collapsed and there is no valley from which to emerge."

While the nation is at considerable risk for another recessionary dip, California is preparing for a recovery after the 2001 downturn, according to Tom Lieser, senior economist and author of the state report.

In his report titled "California: How Strong an Expansion?" Lieser asserts that the critical question now facing the Golden State is the strength of the impending recovery.

"By the second half of this year, areas of current strength should be augmented by a turn in the technology sector. A pickup in computer services and personnel services will bring about a resumption growth in business services," Lieser said. "By 2003, sectors including aerospace and motion pictures will rebound and contribute to a growing California economy.

Media Relations