HOLLYWOOD, Nov. 12 (UPI) -- U.S. movie studios lost about $1.9 billion on the films they released last year, thanks to soaring production costs, Variety.com said Monday.
Global Media Intelligence, a new division of the media research outlet, Screen Digest, looked at the 132 movies distributed by U.S. studios in 2006 and estimated a pretax operating loss of about $1.9 billion.
The report noted, "While the studios are currently in negotiations with writers, actors and directors over fees, these salaries are not the main issue; the current cost of producing, casting and advertising in the present environment simply exceeds the likely returns."
In 2004, the total of all new studio releases turned a $2.2 million profit.
"We believe there is little chance of the negative revenue trend reversing in the coming years," predicted Roger Smith, the report's author.
"New technology will not deliver anything like the revenue initially predicted, and as DVD sales continue to decline and the cost of making movies increases, the message is simple: the Hollywood studios must begin a serious attempt to rein in costs, like News Corporation's Fox has done, if they are to survive."