Renewed optimism.(market outlook)

Business is starting to pick up this year for many visual effects studios and facilities. Many studio owners are more optimistic today than they were during the summer of 2003. In fact, the number of US studios and facilities that say they expect business this year to be "excellent, much better than in 2003" jumped by 18 percent to nearly half (49 percent) in the past six months. The bright spots include Web and interactive media companies, broadcast and cable studios, animation and effects studios, and postproduction facilities.

What's driving this renewed optimism? New projects remain the top new business opportunity for 93 percent of all studios and facilities--up 6 percent front a year ago. At the top of this list are corporate projects, television commercials, multimedia and DVDs, television content, and Web and interactive media projects. Many studios and facilities expect new business this year and, as a result, have been vesting in production and creative capabilities--and hiring more employees--to help them win new projects and improve productivity. 3 More studios and facilities are incorporating the Web into their businesses, while at the same time, existing Web and interactive media companies say their business has improved. Some of the reasons for this trend include improved Web technology, the continued adoption of broadband, and movement of ...