Hollywood heading for 'slowdown'

Hollywood is still seen as the centre of the movie business

Economic growth in Hollywood is likely to slow in 2006 because DVD sales are sliding and productions are being made in cheaper areas, a report suggests.

The Los Angeles County Economic Corporation (LAEDC) report predicted a slowdown in available jobs.

While people still saw Hollywood as glamorous it was an industry "going through some major inflections", said the body's Jack Kyser.

More than 249,000 people are employed in entertainment in Los Angeles.

DVD sales have been a lucrative sector for the movie business in recent years but the report says sales have slowed from $15.2bn (£8.8bn) in 2004 to $10.2bn (£5.9bn) so far this year.

Drama success

Movie ticket sales have been in a slump for most of the year, with the blame falling on high prices and a poor selection of releases.

Film and TV producers have also been moving productions to other US states and Canada where tax incentives are offered.

The problem of piracy is also a challenge facing the industry with the emergence of new technologies.

But the report also suggested that the success of TV series such as Desperate Housewives and Lost will be good for the industry because they employ a large number of writers, actors and directors, unlike unscripted reality TV.

The LAEDC is a non-profit group created to help attract, retain and boost business and jobs in Los Angeles County.