I think that the entertainment biz, especially the music biz, is generally recession-proof. when times are good, people spend money on such things. when times are bad, they cut out vacations instead of movies.
Peter Kaufman
· 1 year ago
True. What's different now compared to other economic downturns is that there is no viable access to the credit markets. The entertainment business (like the textile business) needs to be able to bank its commercial paper; to obtain money from lenders based on the secured contractual commitment from another party (e.g., a studio) to pay on delivery of a picture. Without that, there could be a freeze of most of these transactions. The good news appears to be that the Fed's tactics (and those of other governments around the world) appears to be working albeit slower than we would like so these funds should be available soon (whatever soon means).
Jennifer Morrison
· 1 year ago
Great points, and it does seem that the silver lining to this economic cloud is the investment opportunities for entities and individuals looking for (dare I say) less risk. After all, depending on the structure of the deal, the elements of the project, and the stage at which the money comes, an investment in a film is comparable to an asset-backed security in that the film itself is valuable intellectual property. Plus, even if the film is aborted due to certain circumstances, the investment is insured.
Peter Kaufman
· 1 year ago
Yes, but only if the movie is produced. Otherwise, you have a really expensive screenplay with minimal resale value.
Daniel_Honigman
· 1 year ago
If anything, Web 2.0 startups will have to be, you know, good.
Let's stay optimistic, folks!
Peter Kaufman
· 1 year ago
Dan,
I tend to agree with you but not necessarily for the most obvious reasons. Many VC's take a shotgun approach to investing. In the current economic environment, I think that VC's will be more cautious and conservative. I also expect them to be more aggressive in negotiations. So yes, the Web 2.0 startups as well as others will - by necessity - have to be good.
All Comments
Let's stay optimistic, folks!
I tend to agree with you but not necessarily for the most obvious reasons. Many VC's take a shotgun approach to investing. In the current economic environment, I think that VC's will be more cautious and conservative. I also expect them to be more aggressive in negotiations. So yes, the Web 2.0 startups as well as others will - by necessity - have to be good.