The Breakdown | Explaining Southern California's economy
Business & Economy

Report: On-location film production in LA is moving elsewhere

Photo by Roger Jones via Flickr Creative Commons

On-location production in feature films and TV dramas in L.A. has dropped significantly due to increasing competition from other states and countries, according to a report released Tuesday.

The report, authored by FilmL.A., which processes film permits in the City and County of Los Angeles, blames the lack of financial incentives for the decline. FilmL.A. said comparing 2013 to its peak 1996, features production is down 50 percent. TV drama production declined 39 percent from its peak in 2008.

FilmL.A.'s report examines production on projects like films, TV and commercials over 20 years, from 1993 to 2013. The group based its assessment on the number of days each production received a permit to film on location.  The data doesn't include production that took place on sound stages or on-location sites not regulated by FilmL.A.

Paul Audley, president of FilmL.A., said it's important for legislators to increase the amount of tax credits for film production, so that California can compete with states like New York. He said other states and countries are already developing full-based studio systems that will take away the area's competitive advantage.

The state offers $100 million in tax incentives for films each year. That's compared to New York, which has a tax incentive program four times greater than California, according to an earlier KPCC report.

"There is no more time to debate this. California has got to move this year or face the fact that it will be second tier in the film world," Audley told KPCC.

To be sure, on-location production on feature films and documentaries in 2013 increased 19 percent compared to the year prior, but FilmL.A. points out compared to the category's 1996 peak, the amount of work is much lower. On-location production on TV dramas, considered the most lucrative form of television production, was up 16 percent in 2013, compared to the previous year, the report said.

FilmL.A. also said another concern is that "economic value" associated with production in Los Angeles has declined. There's been a 16 percent increase in "lower value" forms of productions such as reality TV and student films, while "higher-value" production has only increased 2 percent. Last year, only two live-action movies were filmed in L.A. with a budget of more than $100 million.

Loss in production jobs

The decline in production is also causing job loss. A conference held last year discussed the initial findings from a Milken Institute study, which shows that between 2005 and 2012, New York added more than 13,000 production-related jobs, while California lost 4,500 permanent jobs.

Amy Lemisch, executive director of the California Film Commission, said the findings in FilmL.A.'s report wasn't a surprise. She emphasized that more film production helps the local economy and contributes tax revenues to the state.

She said under the current California Film and Television Tax Credit Program, there have been 270 participating projects over the course of five years, contributing $4.75 billion in direct spending the state.

"Each production supports hundreds of workers plus sometimes thousands of individual small businesses," Lemisch said.

Bright spots for TV production

FilmL.A. also points out some bright spots in production in its report. Among them is on-location commercial production, which has seen a lot of growth from web-specific projects. Commercial production set a record high in 2013 and was up 18 percent over the category's five-year rolling average, the report said.

Another area of rapid growth is web-based TV production filmed on-location. FilmL.A. said this category grew 49 percent over its five-year rolling average and set a new record in 2013. The group believes the amount of production in web-based TV will increase as more new media entrepreneurs understand local rules and get film permits. 

Audley pointed out that web-based TV still represents a very small portion of the economic activity generated by film production.

Other areas of growth that set on-location production records in 2013 are TV sitcoms and a category that encompasses other types of production from areas like adult films, still photography and student films, the report said.