The Times They Are A-Changing

November 2008

These words were immortalized by Bob Dylan in his hit song. When it was released in the ’60s, it referred to the unprecedented social upheaval gripping the U.S.—including the civil rights movement and the war in Vietnam. But just as great songs stand the test of time, those same lyrics can be applied to the recent worldwide financial roller coaster we have all witnessed.

While we don’t know exactly how all of this will play out over the next year or so, we do know the times they are a-changin’, banks will inevitably change the way they lend money, and who knows how long it will be before Wall Street returns to normal trading levels. And, yes, we’ve all heard the drill: unemployment is on the rise and consumer spending is down, while concern is pretty constant. At MIPCOM, it was interesting to note that when meeting business associates, clients or personal acquaintances, after, “How are you?” and “How is the family?” unfailingly the very next question was, “How are the FTSE and the Dow doing?” And many were referring to their “201Ks” hoping they would not shrink to “101Ks.”

But I’ve always been a glass-is-half-full type of person, as opposed to seeing the glass half empty, and I’ve been a firm believer that by looking at history we can learn ways of dealing with the present and avoid mistakes in the future. Hey, I maxed out my credit card once and will never get into that mess again. But I’m no financial wizard. Say “hedge fund” and I picture a flowering bush around the perimeter of a garden. “Derivative” is a copied or unoriginal word that should be avoided when writing.

So let me stick with lessons from history, which are a much greater strength of mine, to see what we can do to prepare for uncertain times ahead. We all know that dress hemlines have always come down during recessions. Interestingly, the sale of laxatives increase, because as people stress out they tend to tighten up, apparently not only their wallets.

Songs like “Bridge Over Troubled Water” and “That’s What Friends Are For” were popular in tough times, while “At The Hop” rocked in better times. Then again, dancing the Macarena was all the rage in a not-so-good year. Even Playboy magazine’s Playmate of the Year has been a barometer—in bad years the chosen girls have appeared more mature, heavier and less curvaceous than when good times rolled.

Of course, we have our favorite foods in times of crises. According to a nifty article in The New York Times that outlined social trends during recessions, people tend to buy fewer perishable items—steaks, fruits and vegetables—preferring rice, beans and pasta. I did a quick survey of a bunch of restaurants and the majority offer “recession-buster” or “cost-conscious” menus: smaller portions at lower prices or all-you-can-eat special offers. In the beleaguered London City, bangers and mash (sausages and mashed potatoes) are quite the entrée of choice in restaurants these days, and sales of soup have nearly doubled in recent weeks.

Even Michael Eisner pointed out when I interviewed him after his keynote address at MIPCOM that the three sectors that always hold up in a recession are liquor, candy and, naturally, entertainment.

Yes, we’ll be watching a lot of television in the coming months, cuddled up with our loved ones, catching up on shows we’ve missed but have been meaning to watch, sampling new series, following favorite contestants on reality shows, or gathering around to watch a family movie. Recent Nielsen data supports this prediction. Its Live Plus Seven Day research, which combines viewership figures for live broadcasts and DVR viewing within a seven-day period from initial airing, showed that during the first week of the fall season in the U.S., all networks experienced significant ratings increases.

In our interview with Robert Halmi, Jr., the president, chairman and CEO of RHI Entertainment, he was bullish about growth of the VOD market in the U.S. Thirty-seven million homes currently have the service and that number is expected to reach 65 million during the next three years. It’s obviously much less expensive for a couple with children to order up a movie on VOD than to hire a babysitter, drive to the theater and pay at least $10 per ticket. On the other hand, getting lost in a movie on the big screen is a pretty inexpensive way of escaping any worries we may have.

For sure, many of the business models for making films and television programs will have to change, as Stephen Jarchow, the chairman of the board at Regent Entertainment, points out in our One-On-One interview. And our main feature looks at how the credit crunch is affecting independent filmmakers.

As long as we can reach for some comfort food and good programming, we’ll be fine. So pass the popcorn and let’s dig in.