In L.A., showbiz isn't grow biz

Growth to significantly lag other industries this year

As a Los Angeles County industry, entertainment is one of the largest employers, but growth will significantly lag others this year. That's one reason a report released Wednesday gave motion picture and TV production a C-, one of the lowest grades among all major export industries.

The production industry employed 157,800 people in L.A. County last year but will drop this year to 151,800, according to a report from the Los Angeles Economic Development Corp.

The 3.8% year-over-year negative growth rate puts entertainment second from the bottom among major industries, only ahead of construction, which will see a 6.6% drop in employees.

Broken into three subcategories, independent artists, writers and performers will take the biggest hit, losing 8.4% to 9,200 this year. Motion picture and sound is next, with a 4.3% decline to 122,700, and radio, TV and cable broadcasting fares best with 1.6% growth to 20,300.

The better news from the LAEDC's midyear report is that growth in the entertainment industry is expected to return next year as the industry makes up for the labor unrest that has hampered it this year.

In 2009, the industry is expected to directly employ 159,700 people in L.A. County, 5.2% more than this year.

When all independent contractors are included, the industry employed 241,000 people last year, making it the third-biggest employer among the 19 major industries in L.A. County.

The biggest negative force this year was the 100-day writers strike that started last year but didn't end until February, sucking $2.5 billion from the county's economy.

Negative forces expected to last into next year include a lack of government-sponsored economic incentives to keep production in California and a leveling off of DVD revenue while "no major new digital revenue streams have emerged," according to the report.

An interesting sidebar to the report is that demand for real estate office space is growing in Burbank because of new technologies that allow editing and rough cutting to be done on studio lots.

Other notable tidbits from the report include:

-- Neither the U.S. nor the L.A. economy is in recession. "The decline in economic activity appears to be real but is not yet significant," the report said.

-- Implementation of certain new environmental legislation "will bring both uncertainty and higher costs of doing business to many industries."

-- California's unemployment rate will grow from 5.4% last year to 6.4% this year and 6.5% in 2009.

-- Of 21 major development projects ongoing in L.A. County, only one is related to the entertainment industry: the $1.3 billion L.A. Live retail-entertainment-hotel complex downtown.