"There won't be a film industry by 2020" - discuss

[Jack Kelly]

Will filmmakers still be able to find work in 2020? Commodity prices have been rising extremely quickly in the past 12 months. The price of crude oil has doubled (it's currently at $127 per barrel) over the past 12 months and similar trends can be seen in the prices of steel, fertiliser, most food commodities etc etc.

Goldman Sachs forecasts that oil prices will average $141 over the 2nd half of 2008 (link)

Russian oil output peaked late last year (and Russia is the world's 2nd largest oil producer after Saudi Arabia).

Saudi Arabia, traditionally seen as a "swing producer" (i.e. lots of spare capacity) only managed to up its output by a measly 300,000 barrels per day after huge amounts of pressure from the US (to put that number into perspective, global production is current about 85 million barrels per day).

Of the world's largest 21 oil fields, at least 9 are in decline.

Global oil production plateaued in 2005 whilst global demand has risen very rapidly.

http://en.wikipedia.org/wiki/Peak_oil#Production

Oil could hit $300 in the next 5 years (link)

In other words, there is lots of evidence to suggest that oil prices are going to climb and climb into the foreseeable future.

IIRC, a very crude rule of thumb says that industrialised economies loose something like 0.5% of their GDP for every $10 added to the oil price. In other words, a global recession is virtually inevitable if commodities in general and oil in particular continue their meteoric price rise.

If the economy does start to unwind then surely one of the first industries to go will be the so-called "discretionary industries" (i.e. ones that aren't deemed essential for day-to-day life). And that means us, folks.

So here's my fear: we could easily see oil prices way in excess of $300 per barrel by 2020. That will put some serious drag on our economies. Which will, in turn, mean that no one will want to pay us to make films.

[Chris Luker]

There is always room for education and entertainment. People need to be entertained in hard times. And education is the way out of hard times.

My day job is making educational video games... so theoretically, I'm recession proof!

[Glenn Chan]

I haven't looked at the statistics, but I'd be willing to bet a lot of people still watch films during a recession. One could probably dig up stats for the Great Depression.

Attendance might drop but the market will still be there.

2- A lot of economic forecasts are wrong (probably close to half the time?). Some aspects of the future are just very hard to predict.

[Jack Kelly]

True, folks might want to cuddle up on the sofa to watch a few films when they get a chance. But I would guess that it'll get harder and harder to get financing for feature productions.

And I would imagine that corporate work will become harder to come by as corporations cut costs. Let's face it, most clients don't need a video; they just want to do a video because it's more interesting than making yet another PDF. Most corporate video production is definitely "discretionary expenditure".

[Shawn McCalip]

I think there will definitely be a film industry in 2020. However, I think it will be a little bit different than what it is right now. I think there will always be consistent production from the bigger studios, but what I'm betting on are the small production houses and independent filmmakers getting an easier chance at bringing their projects to the market.

With costs for decent cameras, basic equipment, and software being what they are now, I don't see why someone with a vision and the elbow grease can't start producing their own content with a minimal expense of under $10k. Yes, that's still a lot of money (to me, anyway) but it's attainable, depending on what you're going for.

As far as the economy, I know of many people that have started spending more on things like DVDs and video games to watch and play at home because gasoline costs $4/gallon. Lots of folks aren't going to load up the ol' Suburban and go on a long family vacation, so they're going to entertain themselves at home.

I also think Chris has a very good point. Unless there's a nuclear holocaust or something, there will always be a demand for entertainment and educational video. If less and less people have the means to travel, they might want to live vicariously through their DVD collections.

And Jack, you have a point about video being a discretionary expenditure. However, it's up to us to sell these businesses on the fact they DO need the services and products we provide. Sure, you could save a chunk of money right now and just go with the PDF, but what about the employees who learn better with visual aids? What of morale and retention and yadda-yadda-yadda.

Long story short, I think the film industry will be alive and well. After all, when Hollywood is finished remaking all the films from the 70's and 80's, they'll have to start remaking the remakes from the 90's and 2000's!

[Pietro Impagliazzo]

How about a world without oil?

I'm not an expert, I'm a rookie when it comes to world economy.

But that's the first thought that crosses my mind.

Ditch oil, use Hydrogen like Iceland is doing.

[Shawn McCalip]

Originally Posted by Pietro Impagliazzo

How about a world without oil?

I think we're doing a great job moving toward a world that is exactly that!

Ditch oil, use Hydrogen like Iceland is doing.

Hydrogen sounds really cool, but here in the States, we don't have the infrastructure to support vehicles like that as of yet. Also, it seems like the US, along with most of the rest of the world, isn't quite ready to give up on oil until it gets ridiculously expensive.

[Richard Alvarez]

"Film" - and by that I assume you mean 'moving images' captured either on film or tape or disc or card or memory gel or whatever - is a tool for communication.

(And I view entertainment as a form of communication)

The market for communication grows exponentially with the number of people.

The number of people will continue to grow for the forseeable future.

So, in my book - "No" the oil crunch will not elliminate 'the film industry' in twelve years. It will affect the economy. It will cause new innovations. The industry will have new technologies for acquisition and distribution in a decade. But it will not dissapear.

[Jack Kelly]

Great discussion, thank you. You've all cheered me up!

Originally Posted by Shawn McCalip

As far as the economy, I know of many people that have started spending more on things like DVDs and video games to watch and play at home because gasoline costs $4/gallon. Lots of folks aren't going to load up the ol' Suburban and go on a long family vacation, so they're going to entertain themselves at home.

...If less and less people have the means to travel, they might want to live vicariously through their DVD collections.

Very good points. I hadn't really thought about the point that you make: that a slowing economy will actually increase demand for some "film products" (like DVDs and, soon, video-over-the-internet).

Originally Posted by Pietro Impagliazzo

Ditch oil, use Hydrogen like Iceland is doing.

Hydrogen is an energy carrier rather than an energy source. In other words, you have to make the hydrogen somehow; you can't just pump it out of the ground like you can with oil. At the moment, one way of making hydrogen is by converting natural gas. However, supply of nat gas will certainly peak within our lifetimes so that's not an ideal solution. Alternatively, you can make hydrogen using hydrolysis to split water using electricity. (Where do you get the electricity from though? Coal-fired power? Ick) However, once you've hydrolysed the water, compressed the hydrogen, stored the hydrogen, transported the hydrogen and finally oxidised the hydrogen in either an internal combustion engine or a fuel cell you've wasted a lot of energy. It's generally far more efficient to use electricity to charge batteries in an electric car rather than to use electricity to create hydrogen from water. Also, hydrogen is a minuscule molecule so it leaks out of every type of container and pipe. Not good.

If I was a betting man, I would certainly bet against hydrogen playing a major role in our "post-oil" energy infrastructure.

And, as Shawn says, one of the biggest hurdles for moving away from an economy powered by oil is building a whole new energy infrastructure. That sort of thing costs trillions of dollars and takes decades. Plus it's a real PITA that steel has quadrupled in price in the last 2 years and that borrowing large sums of money has become almost impossible.

[Dufu Syte]

If economic conditions worsen, people will be more inclined towards entertainment to forget their troubles. Wasn't the Great Depression the Golden Years of Hollywood?

If people are poor, then the price of entertainment will need to fall. By 2020 there may be cheaper distribution methods, such as digital downloads to your home or viewing device.

The "film" industry will be dead only in the sense that no one will use optical "film" (celluloid) to create nor display movies; it will be all digital.

[Jack Kelly]

Does anyone have any solid statistics describing what forms of entertainment people spent their money on in previous recessions?

[Richard Alvarez]

Don't wanna sidetrack into energy-only discussions, but the energy necessary for hydrogen to be taken from seawater can be generated by tidal/wind/solar energy typically associated with seaside locations. So potentially the model for positively net efficient "Refining"/extraction exists. Infrasturcture for distirbution and supply already exists in the form of retail locations already in place. Only new 'storage/pumping' units need be installed. A pittance for major oil companies to incur.

What is lacking is the motivation.

Also, as for 'film/celluloid' ceasing to exist. It is still the most efficient method for achiving images known to man. Nothing we know of for sure lasts as long. Movies being shot entirely through digital processes, are being archived on FILM so that the actual images still exist in an optical form. Much the same way that it is recommended you 'print out' your digital home photos so you have a 'hard copy' should the disc be lost or erased. So I don't see celluloid as an archival medium dissapearing in our lifetimes. (It's been around over a hundred years so far.)


Cheaper manufacturing/distribution methods for media acquisition/distribution usually translate to higer profits for the distributor, not lower costs for the consumer. Compare the net profrits for an old 'vinyl' album to a CD in music - and you see the retail cost never went down even though the manufacturing cost diminished exponetially. This, of course, is part of what led to pirating. But thats another thread.

[Brian Standing]

Perhaps a more immediate question might be:

Will there be a broadcast television industry after 2009?

I really think the digital broadcast standards that kick in the U.S. in '09 will be the straw that breaks the camel's back.

Between YouTube, Netflix and PlayStation, I don't know anyone under the age of 30 who watches T.V. anymore. How many more people simply won't bother to make the switch to digital broadcast? How much longer will advertisers continue to support a declining market?

ABC, CBS, NBC and even PBS could all become just another DVD distributor....

[Jack Kelly]

Originally Posted by Richard Alvarez

but the energy necessary for hydrogen to be taken from seawater can be generated by tidal/wind/solar energy typically associated with seaside locations. So potentially the model for positively net efficient "Refining"/extraction exists.

Sure, I don't doubt that it would be possible to produce hydrogen on a commercial scale. However, I'm still fairly sure that it's more efficient to use tidal/wind/solar to produce electricity, send that through the existing AC grid and charge batteries in cars rather than to produce hydrogen. And efficiency really counts when you need all the energy you can get, and for the least cost.

Here's an article which addresses a different problem of a "hydrogen economy" - i.e. that fuel cells aren't delivering on their promise:

http://climateprogress.org/2008/03/0...re-still-dead/

Originally Posted by Brian Standing

Will there be a broadcast television industry after 2009?

Yeah, very good question.

Originally Posted by Brian Standing

I don't know anyone under the age of 30 who watches T.V. anymore

Well, here in the UK, I certainly know a fair few people who still watch TV (both over and under 30). But many of those who watch TV don't watch ads any more because they watch using some form of digital video recorder. And the advertisers are catching on to this trend.

[Shawn McCalip]

I think film will be around for a very long time to come. Personally, I love this age we're in of digital EVERYTHING, but there are many "purists" out there who swear by film and see anything digital as a toy or simply "not good enough" for their artistic endeavors. I simply say good luck to them! I'll gladly spend the $30 for an XDCAM disc over a few hundred bucks for canisters of film that need to be coddled and refrigerated. Anyway, I'm sure film will stick around. After all, you can visit B&H's website right now and see still cameras for sale (expensive too!) that look like they were ripped straight out of the late 1870's.

Originally Posted by Brian Standing

Will there be a broadcast television industry after 2009?

I really think the digital broadcast standards that kick in the U.S. in '09 will be the straw that breaks the camel's back.

Between YouTube, Netflix and PlayStation, I don't know anyone under the age of 30 who watches T.V. anymore. How many more people simply won't bother to make the switch to digital broadcast? How much longer will advertisers continue to support a declining market?

Yes, there will be broadcasting after 2009. The small TV station I worked for last year here in Alaska had already installed and activated digital transmitters in Fairbanks and in Juneau. They're currently working on getting the equipment set up for Anchorage. The network ABC has already made announcements to their staff and to freelance videographers that they will begin using the new Sony PDW 700 XDCAM HD cameras this fall. I'm pretty sure NBC made a similar announcement as well. These aren't cheap cameras, and the networks are hoping that making the investment in these new cameras will yield the same great longevity that they've enjoyed with Beta.

Even though the writers strike had an effect on the industry, the big networks are still going to have their big upfront sales presentations this summer. People/businesses are still spending good money advertising on TV, and it does work! I always enjoy hearing clients tell me how customers walk in to their store because they saw the commercial I made.

Also, TONS of people under 30 watch TV- and they watch quite a lot of it. However, us young folk don't have the same watching habits. thanks to new things like DVRs and Tivo, people can watch whatever they want- when they want. Other innovations like iTunes and Apple TV make it so that people can watch Youtube videos or video podcasts on their big screen TV. Advertisers are doing everything they can to get to the under 30 crowd, because the math still shows that those of us under 30 still spend a lot more than older (30+) people.