Hollywood may not be recession-proof this time

Worried by the worsening economy, Kristen Olson decided she'd better start saving money. She tallied her expenses and was walloped by sticker shock: She and her roommates were spending $900 a year for cable TV. "I'm not watching $900 worth of cable," said the 25-year-old advertising account coordinator, who lives in North Hollywood. She's trying to persuade her roommates to drop the service."You can watch so many shows online for free; most of them are on Hulu now," Olson added, referring to the year-old video site that makes available at the click of a mouse more than 1,000 shows, including her favorites, "Ugly Betty" and "House." Such changes in consumer behavior signal trouble for media companies. For decades, entertainment executives have boasted that Hollywood is "recession-proof." No matter how dire the economy, the argument goes, consumers will always be willing to spend on entertainment to escape.Studio executives note that during the Great Depression of the 1930s, when more than a quarter of the country was out of work, people still scraped together dimes to see the latest motion picture. In subsequent economic slumps, consumers spent freely on new technology, expanded their home video libraries and, most recently, invested $1,000 or more on high-definition, big-screen TVs.This time, however, past may not be prologue. Unlike the rudimentary entertainment economy of 75 years ago, when the downtown Bijou was about the only diversion, consumers now have a near-limitless array of entertainment options to occupy their leisure time.

"While Hollywood films have traditionally fared well during economic downturns, this time around may be quite different," said Bobby Tulsiani, an analyst with Forrester Research, which recently examined consumer spending on media. Blame the Internet. With faster processors, improved technology to compress video and more than 60 million homes in the U.S. with high-speed connections, the computer seamlessly delivers full-length episodes of television shows and movies. As a result, the computer now vies with the TV and cinema as the go-to screen for entertainment. One telling sign was the first "Saturday Night Live" parody with Tina Fey impersonating Republican vice-presidential candidate Sarah Palin, which drew nearly as many viewers online as watched it on NBC. Only one-third saw the Sept. 13 skit that Saturday night live, according to San Mateo research firm Integrated Media Measurement Inc. The rest caught it online or on their digital video recorder. SOURCE:LAT.COM