Movies Are Producing Crowds But Not Profits For Big Studios

Strong movie box office sales in a recession year are raising spirits in Hollywood, but they aren't driving profits for major entertainment companies.

DVD sales, the most profitable business for major film studios, are in a steep decline that analysts fear may be permanent as digital piracy thrives and online downloads and rentals gain popularity. Also, studios are making fewer films as once-generous sources of financing have dried up.

With investors pressuring film companies for higher returns, an industry known for excess is cutting back expenses on things like marketing and actors' salaries, and a flurry of consolidation could be in store.



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