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http://www.scpr.org/blogs/economy/2013/08/28/14609/just-how-fast-is-film-production-running-away/?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=Feed%3A+KpccLatestNews+%28KPCC%3A+Latest+News%29

 

Is the Los Angeles film and television industry really in a state of emergency? Brian Watt | August 28th, 2013, 1:53pm
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LUCY NICHOLSON/AFP/Getty Images

LOS ANGELES: Preparations to film on the set of Paramount Pictures' television drama series 'The Division' in downtown Los Angeles, CA 30 April 2001.

"State of emergency" is usually a term reserved for catastrophes like earthquakes and floods, but earlier this week, that was how Los Angeles Mayor Eric Garcetti characterized the city's need to stop the flight of film and television production to other states and countries. 

The lure of lower production costs and special incentives has already won over an increasing number of film and television executives looking to tighten budgets and boost profits. 

"We are going to fight a lot of fights," Garcetti told Variety. "I know we are not going to win every single one of them. But if we don’t put a lot of strength toward winning a couple of battles in this war, we are just going to continue to be left behind on the battlefield."

Data from the California Employment Development Department suggest that employment in the motion picture and sound recording industry has remained flat over the past 10 years.  In 2003, the sector employed 120,000 people in Los Angeles. That number has risen as high as 137,000 (in 2004) and fallen as low as 117,000 (in 2009).  Last year, the sector employed an average of 119,000 people.  

But film and television production jobs can be hard to count since the industry relies so much on freelancers, who are often paid by independent payroll companies.

Paul Audley, President of FilmLA, said he appreciated the mayor's "call to arms." 

"We have virtually lost the most valuable forms of film and television production in California," Audley says. He cites the highly valuable television drama as an example.  

About 80-85 percent of television dramas were once shot in California.  Today, it's closer to 40 percent or even lower, Audley says. TV dramas are valuable for their long-term employment of cast and crew, great wages and big spending in the area on the materials needed for production.  

"When we lose one, it's a serious problem," Audley says,. "In the 2012 season, there were 23 new dramas, and 21 of those were not filmed in California."

Since 2009, the California Film Commission has offered $100 million a year in incentives to film and television productions, but that's less than a quarter of what New York has offered.  In a recent report, the Film Commission says "competing states that offer incentives achieve dramatic growth in production spending, siphoning money that would have historically been spent in California. " 

The report says the most damaging loss has come in production of big-budget feature films.  It cites "Iron Man 3" (North Carolina), "The Amazing Spider-Man 2" (New York) and "The Great Gatsby" (Australia) as examples of films that have been shot elsewhere.

"Collectively, these large scale film projects employ tens of thousands of well-paid workers and represent several billion dollars in direct spending," the report says.

The California Film Commission's executive director, Amy Lemisch, says that 10 years ago, two-thirds of studio feature films were filmed at least in part in California, but by last year,  that number was less than a third, 30 percent.

“The California Film and Tax Credit program works, and it has helped keep many film and TV projects in state,” Lemisch says. “But we still have a lot of work to do.”

Paul Audley of FilmLA says, "California simply is not in the game yet." Big-budget feature films can't qualify for California's tax credit.  A record 380 film and television productions applied in June for a share of California's $100 million in tax credits. Only about 30 projects received initial approval for the grants before the funds were exhausted.  Audley says the rest will likely go somewhere else.

"We could have turned around employment numbers and all kinds of economic indicators to benefit this region if the state of California would actually compete for the business," Audley says.

Boom operator Tim Song Jones says that, over the past 18 years, he’s worked on the sound crew for “The Curious Case of Benjamin Button” and numerous television shows.  He agrees that runaway production has reached crisis level in Hollywood.

“I have seen work dry up,” Jones says. He says in a good year, he’s earned as much as $90,000 on film and television sets, but recently, he’s earned closer to $50,000, and he considers himself lucky.

“I get little bits and pieces here and there, but I know people who have not worked in months, I know people who have moved out of town and I know people who’ve just quit and retired,” Jones says.

wolf

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In our global economy, all the states in the US are missing out on a very big point:

Any country that wishes can afford to put up buildings in which to place the standing sets of a television program. 

It takes about 30-90 days to train a department 3rd to a basic level of competency for this kind of production.

If you just import cast, and at first department heads, it would be very possible to beat every state's tax incentives.

 

The language and ethnicity of the crew are irrelevant to the market of exhibition of entertainment media.

 

As publicly traded companies are obligated to maximize profit, they would then need to send their project out of the country entirely.

 

Runaway production from LA to other states is nothing near what could happen if say, Mainland China and SE Asia wanted the business....

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It's called Capitalism.

 

LA became the center of film production because it made the most economic sense to have everything in one place. The weather (and avoiding Edison's patents) were why it came, of course, but preserving investors' profits were why it stayed.

 

If other locations can offer a more profitable package, it'll move. The move will be incremental and take a long time -- there are still some services you can find only in LA -- but it will happen. Or else movies themselves will be replaced by some other entertainment, generated through some other method, that can offer an equivalent experience for less money.

 

It happened when movies replaced vaudeville. It started to happen again when TV replaced movies, but then movies played a good game of catch-up. It's happening now to the national TV networks, with cable networks replacing them... and streaming video is starting to replace the cable networks.

 

Like I said, Capitalism. It's a pretty good system (when nobody cheats), but there will always be winners and losers.

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If you just import cast, and at first department heads, it would be very possible to beat every state's tax incentives.

This very thing has been happening in China for a while. Two years ago while in pre-pro of a feature film, a Chinese studio offered to give me half of my production budget (in in-kind services) to the tune of about $600K. They would build all my sets and have an on-location labor pool (of slaves, basically) that would work around the clock. All I needed were my keys and talent. It was a very tempting offer that I'm sure many other filmmakers (would) have jumped on.

Cheers,

Evan Meszaros

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