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The Age of Entertainment
Dancing to a different tune
History has shown that one of the sectors which best survives an economic downturn is the entertainment industry. The reasoning is that the worse people feel, the more dire their need for escapism. Is history repeating itself.
In 1933, during the Great Depression, one in four Americans was unemployed. However, approximately 70 million people - more than half the United States population at the time - visited the movie theatre each week.
The 1930s have been labelled the "Golden Age of Hollywood", ringing in technological innovations such as sound and colour. Theatres attracted audiences with a variety of incentives, such as two-for-one features and giveaways, and the result was the rise to fame of actors such as Greta Garbo, John Wayne, Clark Gable and Katherine Hepburn, and that iconic, cane-twirling depression-era tramp portrayed by Charlie Chaplin.
In the music industry, tough times called for innovative solutions, and many jazz bands were forced to perform for free during the Depression.
The result? The number of jazz records sold in America increased five-fold between 1932 and 1939. For the first time, jazz had won over the white audience, with big-band 'swing' jazz becoming America's favourite music of the decade. It moved from its traditional domain of backstreet bars to ballrooms and theatres.
History repeated?
In the current economic climate, the entertainment industry seems similarly resilient. Although the film and television industries have taken a knock, numbers are still strong: The number of bums in Ster-Kinekor seats is reported to have increased by around 415 000 from 2008 to 2009; Paramount Pictures' response to the recession has been to reduce the production of movies by only five - from 25 to 20 - a year; and NBC Universal has cut its 2010 budget by a mere 3%, showing that the film industry is not as hard hit as many other sectors.
It is to be expected that the less mainstream entertainment sectors, such as the theatre, would be less buoyant. In response, the Johannesburg Theatre has halved the cost of tickets for the musical Footloose, while the Market Theatre has been offering two-for-one specials. Both are confident that these measures will ensure that no seat remains empty.
Other businesses are also using the recession as a marketing tool in itself. One can now attend a "Recession Party" in Durban to enjoy free and reduced-price drinks, or attend a comedy show by Brent Palmer called "Credit crunch", which is punted as "a hysterical reminder that although our economic times are tough - 'like Bloemfontein Biltong' - we need not despair".
Consumers' dedication to their entertainment spend seems set to continue. The MasterCard Worldwide Survey on Consumer Purchasing Priorities conducted between March and April 2009 found that 67% of African respondents rank spending on dining and entertainment as their top priority for the six months to come - this while almost half of South Africans state that they want to put the brakes on their discretionary spending.
New media
While the movie and, to a lesser extent, theatre businesses seem set to merely weather the economic storm, online and computer-based entertainment products are indeed experiencing significant growth. The number of people renting videogames in the US is up 30% from last year, and Netflix, an American DVD-by-mail subscription service, has increased profits by 21% in the second quarter of 2009.
Mobile music is another area that is set to expand. United Kingdom-based Juniper Research estimates that revenue from mobile music will increase to almost R120 billion worldwide by 2013 (up by R30bn from 2008), with full-track downloads accounting for almost 40% of this pie.
In South Africa, this year has seen the introduction of the Nokia Music Store, which offers music downloads on a pay-per-use basis. Interestingly, profits do not come from the sale of the music itself but from the sale of cellular phones and related hardware.
The Nokia Music Store may come as welcome news to South African Internet users. A MasterCard survey released in June 2009 revealed that 80% of South African Internet users are shopping online, with CDs, DVDs and VCDs emerging as the most sought-after items (followed closely by books and art-related products).
Clearly, entertainment spend both globally and in South Africa is considered not a luxury, but even more of a necessity in tough economic times.
If historic trends are anything to go by, it seems that the entertainment industry would do well to consider consumer incentives, introduce value-added components to their products, and venture fiercely into the online domain.
If it does so, the current recession may just auger in a second Golden Age of Entertainment.
"To truly laugh, you must be able to take your pain, and play with it!" (Charlie Chaplin)
