Howard Rosen is CEO/executive producer of Roadhouse Productions in Toronto, where he oversees the development, production, financing and servicing of feature/cable films, television series, multi-camera live events, commercials and broadband interactive projects.

Seems like every discussion I’ve been having these days resonates with the strains of the Marvin Gaye classic, What’s Goin’ On?

Great song! And a good question! At first glance, it seems fairly obvious: major economic downturn pushed over the brink by the attacks of Sept 11. We were all caught in the force, slammed against the wall and left in a numb state of shock.

Our industry has weathered downturns before and most of us made it through relatively unscathed, but, this time, there is a fundamentally new element to compound the crisis – the psychological impact. Who wants to talk about entertainment when everything seems to be overshadowed by the hyper-reality?

For old-timers like myself, we remember an earlier, artificially created industry ‘downturn’ that took place around 1981/82, when the federal government put a screeching halt to the industry by wiping out the one-year 100% Capital Cost Allowance for investors (dentists and urologists to be more specific). For those who are just now starting to turn grey, you may remember 1989/91, when the industry was hit again, this time by a less favorable exchange rate, as well as rather large cost increases for equipment and personnel due to a momentary surge in demand.

This time around, we are witness to a convergence of issues sure to beat the stuffing out of even the most optimistic of producers: the economy has taken a dive because of widespread corporate hemorrhaging and labor uncertainty.

The unquantifiable problem is the lasting effect of this psychological element. Spending decisions are being based on non-tangible fear issues. ‘What’s going to happen? Will anyone watch anything but CNN? Better hold back till we know!’

Similarly, how do you deal with talent who won’t fly or work away from home? In the past couple of weeks, I had a 65-episode TV series turn and not come here as expected because of concern about leaving family in New York. And that’s even after I showed major cost savings before any tax credit calculation. And by the way, these guys were Canadian!

To look at this from a rational business perspective is almost impossible, as this is not a rational time. The psychological state of decision-makers makes it difficult to predict where this will go. Issues are no longer simply ‘We’ll do it if we save 15%’ or ‘Let’s take a chance on that idea,’ but now include ‘Does this fit the mood of the country?’ and ‘Are we being too critical?’

Many business ideas that made sense before Sept. 11 may not make sense now or in the future.

For the entertainment business to stay afloat, it will need a new mode of operating. We can already see this happening. Sony, Fox, USA have started to make dramatic changes in how and what they do. We should not look at this as a short-term rescue plan, but as a longer-term recovery operation. New business opportunities will have to arise out of existing media expertise and involve the development of new uses and new clients. What those uses may be is the trick, and will ultimately show the mettle of the industry.

Before we gather our emotional and business resources for the challenge ahead, we should take a few minutes to sit back and listen to another song – the Lennon & McCartney classic (preferably sung by Joe Cocker), With a Little Help From My Friends. It doesn’t call on God or patriotism to pull us out of this mess.