Katrina's Aftermath Felt Everywhere2 Sep, 2005 By: Kurt Indvik
As of the middle of this week, the devastating impact of Hurricane Katrina was still unfolding. What started out early in the week as a dramatic loss of property along the Gulf Coast became a disaster of epic proportions as levees surrounding New Orleans failed, flooding the city, and the loss of life threatened to climb into the thousands.
We attempted to find out the impact on video operations in the region, home to hundreds of stores. Damage assessments were still being made by major chains and indies alike, but the impact will likely be pronounced.
Beyond the terrible loss of life in the region, the disaster also may be one of the worst, financially, in the nation's history. The results will be felt across the country and in all manner of industries.
Certainly one impact already was being felt as gas prices started to climb in the immediate aftermath of the disaster due to the loss of production from Gulf oil operations.
Gas prices have been increasing steadily over the past months, and a recent poll by the International Council of Shopping Centers, done before Katrina, found 23 percent of households polled with total income of less than $50,000 reduced their discretionary spending, including entertainment, as a direct result of rising gasoline prices. As gas prices continue to climb, and more quickly so in the aftermath of Katrina, entertainment retailers and theatrical exhibitors have reason for greater concern.
But gas pricing wasn't the main culprit for the summer's poor showing at the box office, as you'll read in our Sept. 11 cover story by Holly J. Wagner. The public's general lack of enthusiasm for what Hollywood had to offer ranked as the No. 1 reason for the lagging attendance, according to an online survey of 1.8 million postings on consumer discussion boards, chat rooms and blogs on the topic of this summer's movies. Only 19 percent cited alternatives to the theater, primarily DVD, as their main reason for staying away from the cineplex.
Now, in the wake of Katrina, the entertainment industry will have to work that much harder to entice consumers to burn their ever-more-expensive gas to come to the movie theater, video store or other entertainment venue.