During recessions, people still want to invest, and they start looking for businesses and investments that can still be profitable when people have less money to spend. And many people have heard how during the Great Depression of the 1930's that movies were very profitable. It is actually true, and there are reasons for it which will be explained in this article.
When the economy is in a slump, people want to escape their worries, and a movie is an affordable way to do just that. During all of the recessions in the past 50 years, the movie industry has done well. Going to a movie is the most affordable out of home entertainment option. It is easy to prove this by comparing the cost of a movie to attending a sports event or a concert. During the Great Depression, 25% of American families had no income and unemployment for factory workers was at 40%. Despite this, movie box office receipts soared. Some people would see a movie rather than eat. They did this because they were desperate to escape their problems, even if it was temporary.
The profits for a movie can be huge. These days some blockbusters pull in hundreds of millions of dollars. But they are not the whole story. There are many low budget movies, quietly making excellent returns, despite costing only a few hundred thousand to make, and staring unknown actors. The new movie technologies allow filmmakers to make high quality movies for under one hundred thousand dollars. They look good technically, and if they have a good story, they have a chance to make millions of dollars.
And these days distribution is easier, as there is no need to rely on theatres, with repeat TV broadcasts and online downloads available. This is an important consideration during a recession, as a finished movie no longer needs a huge additional budget for advertising and promotion. For consumers with limited budgets, they can download a movie for a low fee, which can be enjoyed by a whole group, making watching a movie a very low cost form of entertainment indeed.
There are people who invest in movies regularly, and they are fully aware of how movies perform well during recessions. These people are inclined to want to keep the fact that movies are recession proof unknown to the general public so that they have the most opportunities to invest in movies themselves.
