2009: The Outlook

A couple months ago I wrote a blog titled The CEO Filmmaker.  In the blog I spoke about the importance of filmmakers having a better understanding of film investors’ needs.  I believe it is imperative that all filmmakers, especially those actively seeking investment, keep a close eye on what is happening in the economy and the financial markets.  Though we are not all Wall Street traders, we are all impacted by the performance of the stock market.  In 2008, the majority of investors experienced substantial losses in their net-worth.  Film, often viewed as a recession resistant investment class, was unable to escape the recession of 2008.

I firmly believe 2009 will be a far better year than 2008.  That being said, I do not believe that we are in for a massive bull market.  As unemployment remains high, wages and prices will continue to drop, fueling further deterioration in consumer spending and business investment.  Risk tolerance will remain low, presenting speculative investment classes like film with an uphill battle.

My advice to you – keep your spirits high and focus undeterred.  Sentiment has been overwhelmingly negative during the past few months, but is important to note that this economy is nowhere near another Great Depression.  Between late 1929 and 1933 inflation-adjusted G.D.P. fell by over 30 percent, industrial production tumbled 47 percent, and the unemployment rate hit 25 percent.  The Great Depression amounted to more than 10 times the G.D.P. lost compared to all other recessions of the 20th century combined.  The government was not behind the problem then… but they are now.