Easy Money Fuels Film Glut?

By Robert Marich
Sept. 3, 2008 – Some $13 to 18 billion in Wall Street investment recently poured into the film business, which is crowding out independent films, according to a Wall Street Journal article.
            Under the headline “Glut of Films Hits Hollywood,” the article by Lauren A. Schuker and Peter Sanders highlights that some indie films that skip theatrical distribution now – going straight to video mostly – which in years past would have made it to theaters.
            The article says, “Hollywood executives fear the glut created by the recent spate of overproduction is going to be felt for at least a couple more years. Some people say the worst of the oversupply problem is still about a year away.”
            The article addresses a tricky issue because indie films have never had an easy path to the silver screen and they'd didn't get much of the Wall Street windfall (major studios did).
The multi-billion dollar Wall Street investment is significant because it came from purely financial investors seeking profit and not film industry insiders with a strategic motive. Hollywood is famous for one-sided deals that favor itself, so in past decade financiers stayed away.
            “The flood of indie films has driven up marketing costs, as each film spends more to compete,” notes the WSJ article. “Last year, top-flight casts didn't prevent movies such as In the Valley of Elah  and Things We Lost in the Fire from getting drubbed at the domestic box office.

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