The entertainment industry is growing in a myriad of ways:
- The rising costs of supporting an extended-run Broadway show has led to a boomlet in off-Broadway and small venue theater productions, says respected industry practitioner Gene Williams, entertainment practice leader of Chubb Group of Insurance Cos. "The costs of putting on a Broadway show, from capitalization to weekly running costs, have pushed a lot of shows to off-Broadway," he says. "This has had the healthy effect of expanding the universe of quality shows."
- Casinos themselves have become high rollers. "Our business is on the upswing all over the world," says Lance J. Ewing, Las Vegas-based vice president of risk management for Caesars Entertainment Inc. "The great popularity of the 'World Series of Poker' in light of the cancellation of the National Hockey League season has added an extra boost, although poker has always been a part of gaming."
- Studios and movie and TV producers are increasingly considering comprehensive insurance coverage for single-star projects, says entertainment business insurance broker Brian Kingman, senior vice president at Aon/Albert G. Ruben. "Typically, the coverage will make the studios or producers whole if the star is not able to perform for any reason," he says. "In the case of David Letterman, Judge Judy or Oprah Winfrey, they are the show. What we do is forecast what kinds of profits are likely to come from these shows, many of them involving multi-year contracts."
- Computer-generated imagery, not just special effects, is a trend in all aspects of the film business, from big-budget movies, to smaller documentaries to so-called "industrial films" for trade shows, corporate training and sales promotion purposes. A prime example of computer-generated special effects, notes a spokesperson for Fireman's Fund, are the extensive battle simulations in "Hellboy," a box-office hit.
- Nor are important underwriters flinching from underwriting hip-hop artists and rap music concerts. Says Martin K. Ridgers, partner and director of underwriting at Entertainment Brokers International, "We would certainly look at a situation from that sector of the music business. We are more than willing consider proposals from anybody who is serious and is willing to work closely with us."
A number of entertainment-world futurists say you don't have to look too far ahead to foresee the day when Internet-delivery of movies will replace the current reel-delivery system.
Underwriters and their brokers, to be sure, won't be far behind.
April 15, 2005
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