Hollywood may be resistant to recession, but a volatile economy has Paramount Pictures paring back film releases to 20-films in 2009, down from 25-films in 2008 and 28-films in 2007. With shares in its parent company - Viacom Inc. closing down nearly 8.9%, Paramount has been seen cutting costs to the tune of $50-million.
While, industry executives and analysts believe the entertainment sector is resilient enough to survive tough economic times, Brad Gray, Chief Executive of Paramount Pictures Chief Executive Brad Gray in an interview on Wednesday stated no industry was immune to the market turmoil witnessed in the past few weeks. He felt that even though theirs was a 100-year old firm, yet, it had to be guided carefully through a harsh economic climate.
Only recently, Paramount split with Steven Spielberg’s DreamWorks SKG, which saw 125-Paramount staff and 100 of the 150-DreamWorks staff transferred to DreamWorks new venture with Reliance ADA Group from India. Of the remaining 50-DreamWorks staffers, about 25 will remain with Paramount, while the other 25 will be let go.
Michael Nathanson, a Bernstein Research media analyst believes other studios will follow suit. With less capital to go around, stocks of other media companies, such as, Time Warner Inc, General Electric Co, the parent of Universal, and News Corp, parent of 20th Century Fox fell sharply in the midst of a sharp stock market sell-off.
Paramount will continue to release 12 homegrown pictures, including MTV Films and Nickelodeon Movies, and close to four additional ones from its Paramount Vantage unit. It will also continue to distribute two to four DreamWorks Animation and Marvel Studios produced films each year.
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