Economic Downturn... A Design and Build Barometer

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I hear the following expressed by people in the entertainment industry all the time: "Everything will be fine, because entertainment is recession proof. During the depression theater thrived in New York...". I hear that a bunch more lately. It's comforting... I've said it myself, and have ALMOST allowed myself to believe it. But this isn't 1929. And 'entertainment' is an industry that spans all levels of content, from theater, to broadcast, to gaming, concerts, branding experiences, theme parks, et al. I've been keeping steady contact with friends all over the business lately. Over several lunches, dinners, cocktails, and friendly skype sessions, I've been getting a view of how the business seems to be doing...

To sum up: Corporate and Brand events have had a substantial slow down. Theatrical production is being subject to aggressive belt tightening in upcoming productions, and sober evaluation of currently running shows. January saw a virtual blood bath on Broadway, with numerous shows closing. Concert touring seems to be holding steady at the moment, as is broadcast special events. Many architectural and installation projects are continuing, perhaps because their gestation period is such that they were all begun three or more years ago.

But where's it going to go ? Interesting question. I was talking with a major producer of theatrical tours the other day. He said that local presenters are pushing hard to pay less on guarantees. To the point where he has been induced to try to discover what local presenters WILL pay, and then produce to that number. In real terms it means broadway type tours are shrinking from 6 trucks to 2 trucks. It means a return to old school approaches which eschew the use of automated scenery, or giant lighting rigs, and focus back on story and actors. Narrative is trumping spectacle. I think that artistically this is fantastic for theater, particularly musical theater, which has hatched dud after dud, usually based on children's films, or has-been recording artists... We're going to see more plays on Broadway I bet. We're also going to see truly innovative DIY work starting to peak in, as theater begins to return to the artists.

The negative aspect is that jobs are dissapearing, and rates are going down. The stage hands who rely on their expertise in using high end automated scenery, or expensive effects, are finding less work. And the work that exists is on very limited budgets. We're working on a Broadway show now that has huge deployment of media as scenery. If we were doing a show like this 2 years ago, or if it was a concert tour using this much media, the production fees would be in the 6 digit range. With things as they are now, we'll be doing the show because of the first rate creative team (I love working with talented and inspiring people), but we're going to end up producing the show for the proverbial five bucks and a bus ticket.

I had dinner last week with a good friend who owns a company that vends high end lighting and video gear primarily to corporate and special event clients. He confirmed my impression that corporate and brand experience were dead. With gear sitting idle, he and his partners are working to explore new markets, to put off new gear purchases and get every ounce out of what they have, as well as tightening the personnel belt around the shop. He told me also about producer expectations, needs really, of lower rates. His company is about to do a Broadway show that utilizes a good deal of projection. The producer's line item for the weekly rental for that gear would have caused a reaction of laughter in 2006. Now the gear is going out at that price, and gratefully...

Meanwhile, the concert industry is chugging along. Live music does seem to be holding steady as a recreational refuge. So plenty of tours are rolling. Budgets are tight though, and the will to spend multi millions on show production values seems to exist only in the very top end acts like AC/DC and Madonna. We're designing a new tour for Nickelback right now, and though we did see a healthy budget increase, it's not the stupendous jaw gaping spectacle we were all predicting even as recently as last summer. Nickelback has always been dedicated to keeping the ticket price within reach of the working man, and the design team knows it. So we're packing in all we can for a reasonable production budget.

One of the canary in the coal mine moments occured to me when I saw a friend's Facebook page commenting on how they were looking for a job. This guy is a super high end lighting programmer. In what we regarded as normal times, high end video and lighting programmers booked out years in advance, and commanded staggering rates... Up to $1750 a day ! So seeing one of the major guys actually asking around for work was a bit un-nerving for sure...

I'm waiting to see the results of 2009. But I'm keeping a wary eye on 2010. In entertainment, most major endeavours seem to start about 2 years out. With the paralyzing lack of liquidity, and the generally conservative approach to spending is going to crop up in a lack of projects starting in the pipeline now. That means in 2010 things may be slowing down for entertainment, just as the rest of the world is maybe beginning to resurface. Although producers will ramp up with any economic recovery, there may be a hiccup there as that adjustment occurs.

We're definitely operating as taught as possible... Many of the extras we didn't think about, like shipping, or that extra latte, are being examined with a careful eye. But MODE seems to be lining up gigs to keep our core people busy this year. Here's hoping it continues that way.

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