Friday, May 2, 2014

The news is that Viacom, which owns Paramount Pictures, is losing money on the film biz. But don't worry, Viacom as a whole is making money off cable.

A "business death spiral" is one in which rising costs, shrinking market, and higher prices conspire to kill off a business.

Paramount Pictures continues to lose money (even when most of the income for its motion pictures comes from licensing rather than box office or home video sales), and it slashed the number of pictures it makes per year by half. Its cost-cutting seems to have come merely from the reductiion in the number of films made, not by actual cost-cutting.

Paramount is very nearly in a death spiral.

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