Film Flight: Lost Production
and Its Economic Impact on California
Jul 10, 2010
Kevin Klowden, Anusuya Chatterjee and
Candice Flor Hynek

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Hollywood may be synonymous with the entertainment industry, but there's no denying that California is an expensive place to live and do business. Movie projects can move - and when they do, they take with them millions of dollars in lost local spending.

This research report finds that California has lost 10,600 entertainment industry jobs, more than 25,000 related jobs, $2.4 billion in wages and $4.2 billion in total economic output since 1997 as film and TV production has moved to other states and countries.

Among the report's findings:

* The number of movies either wholly or partially filmed in California has fallen sharply, from 272 in 2000 to 160 in 2008.
* California's share of North American employment in the industry has declined from 40 percent in 1997 to 37.4 percent in 2008. The losses are especially pronounced in post-production.
* Jobs losses go beyond the movie industry, because for every job created in California's film sector, another 2.5 jobs are created in other sectors.

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States like New York, New Mexico, Georgia, Louisiana and Michigan, as well as nations like Canada, Australia and Germany, have been aggressively courting the film industry with extensive tax and wage incentives.

In 2009, California implemented a tax credit for projects filmed in state with budgets of $75 million or less. This was a positive sign that the state is getting back in the game. But California's incentive program has more stringent qualifications than other states' and specifically excludes big-budget productions.

The report outlines recommended steps to help California turn the tide. It also analyzes what other countries and states are doing to attract film production and post-production business.

Click here to read the Executive Summary.