Behind the stunning job losses in Hollywood: 'The audience has moved on'

The iron fist of history seems finally to be coming for Tinseltown.

Beyond the financial blows inflicted by the pandemic and the actors’ and writers’ strikes, the vast Los Angeles-based entertainment industry known as Hollywood is facing the far greater forces of economic disruption that have already struck the rest of the United States.

Much like manufacturing, agriculture and other major segments of the U.S. economy before it, the result for Hollywood appears to be mixed: a possible return to prosperity and good times for some, ever tighter times for others.

“There is something of an existential question mark over large swaths of the traditional Hollywood economy,” said Stuart Ford, chairman and chief executive of Los Angeles-based AGC Studios, which develops, produces, finances and licenses films and television series.

The decades-long way of making money in the film and TV industry has been turned upside down by new technologies, changing public appetites and the globalization of the workforce.

“The key thing here is that you have so many of these things happening at once that it’s really hard for anybody to feel confident,” said Kevin Klowden, an economics expert at the Milken Institute who has done extensive research on California’s entertainment industry.

“There’s a very, very real question right now on the business side that’s playing out, because nobody’s quite sure of the economics.”

What is clear is that the numbers are bleak — for box office receipts, filming activity and especially employment.

Coming out of the strikes in the fall, many expected a rebound in local film and TV jobs. But employment in L.A. County’s motion pictures and sound recording industries — the main category for film and television production — has barely budged from about 100,000 through April, which is about 20% less than pre-pandemic levels. Aside from the early months of COVID-19 in 2020 and the strikes in the summer last year, employment in the sector hasn’t been this low in more than 30 years, according to the U.S. Bureau of Labor Statistics.

The effect on lost wages and purchasing power is significant for the regional economy. Employees in the motion pictures and sound recording industries earned on average $2,600 a week last year, making up in total about 5% of L.A. County’s wages in the private sector, although less than 3% of employment.

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