The Struggling Studio System

Scott Kirsner of CinemaTech wrote a great blog a few days ago about the struggling state of the studios.  As the migration of viewers and content to the Internet continues, studios are clamoring to figure out how to best monetize new media’s many distribution channels.  In his blog, Scott writes:

“I’m very confident about digital media’s ability to support individual creators, doing the kind of work they want to do, often on tightly-constrained budgets. (Constraints = inventiveness, right?)  I’m less confident that it will support the same gargantuan, diversified companies that raked in the big bucks in the days when there were only four TV networks, six movies released every weekend, a dozen important records issued on Tuesday.”

I agree with Scott completely.  In 2008, box office revenues hit an industry record of $9.6 billion and studios still lost money.  In their biggest year ever, studios did not profit.  With costs continuing to rise, declining margins will force the slow moving studios out of business…  That is unless they get a government bailout.