The global economy has faced challenges for the last five years. The major challenge was the recent fall in the stock prices that began in the U.S. and spread to various parts of the globe. However, around the globe film companies recorded mixed effects. The film companies in the U.S and U.K. were the ones that were worst hits with a lot of revenues being lost in movies that cost the companies millions of dollars. Hollywood was particularity affected due to the extent to which the American economy depended on the stock exchange. Due to the fluctuating stock prices most investors were afraid of investing due to the fear that the stocks might continue falling.
The same scenario was observed in most film companies in the U.K. (Oxford Economics, 2008) Lack of financing for movies meant that film companies had little work and hence the reduced revenues. The films that had already been made did not debut as they were anticipated and some even recorded losses. Furthermore, due to tough economic times people spent less money in luxury commodities and films were some of the commodities considered by consumers to be luxuries. However, not all places recorded losses. Chollywood in particular recorded significant increase in revenue. Contrary to general state of affairs where Chinese made films did poorly in the globally market, the films sold significantly around the world perhaps because the DVDs were cheaper as compared to the DVDs of movies from other parts of the world and most significantly Europe (Kung Fu Magazine, 2010).
Currently, the global economy is slowly picking up and it is expected that the film industry will boom and new blockbuster releases from various film companies around the world will hit the market. As usual the consumers will rush to purchase the DVDs and the movie industry will get back on its feet once more.