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CRB 2002 Report [Pdf] Motion Picture Production in California By Martha Jones, Ph.D. Requested by Assembly Member Dario Frommer, Chair of the Select Committee on the Future of California’s Film Industry MARCH 2002 CRB 02-001 Motion Picture Production in California By Martha Jones, Ph.D. ISBN 1-58703-148-5 Acknowledgements Many people provided assistance in preparing a paper such as this, but several deserve special mention. Trina Dangberg helped immensely in the production of this report. Judy Hust and Roz Dick provided excellent editing support. Library assistance from the Information Services Unit of the California Research Bureau is gratefully acknowledged, especially John Cornelison, Steven DeBry, and Daniel Mitchell. Note from the Author An earlier version of this document was first presented at a roundtable discussion, Film and Television Production: California’s Role in the 21st Century, held in Burbank, California on February 1, 2002, and hosted by Assembly Member Dario Frommer. Roundtable participants included the Entertainment Industry Development Corporation (EIDC), The Creative Coalition (TCC) and the Screen Actors Guild (SAG). Assembly Member Frommer is chair of the Select Committee on the Future of California’s Film Industry. This is a revised version of the report. Internet Access This paper is also available through the Internet at the California State Library’s home page (www.library.ca.gov) under CRB Reports. Contents EXECUTIVE SUMMARY .............................................................................................. 1 I. OVERVIEW OF THE CALIFORNIA MOTION PICTURE INDUSTRY............ 5 SIZE AND GROWTH OF THE CALIFORNIA MOTION PICTURE INDUSTRY ............................ 5 The Motion Picture Industry Measured by the Value of Output During the 1990s.... 5 The Motion Picture Industry Measured by Employment ............................................ 7 California’s Leading Export Industries Ranked by Employment ............................... 8 The MPAA Report, Economic Impact of the Entertainment Industry on California .. 9 The Number of Firms and Structure of the Motion Picture Industry ....................... 11 Employment Trends in Motion Picture Production.................................................. 13 Employment Statistics in Motion Picture Production............................................... 16 Output and Employment Long-Term Forecasts........................................................ 20 U.S. Exports.............................................................................................................. 22 Film Industry Statistics: Film Starts and Releases, Television Movies, etc. ........... 23 IMPACT OF THE FILM INDUSTRY ON OTHER INDUSTRIES (THE MULTIPLIER EFFECT)..... 30 REGIONAL ECONOMIC IMPACTS OF THE FILM INDUSTRY............................................... 32 II. RUNAWAY PRODUCTION ................................................................................... 35 FACTORS CAUSING RUNAWAY FILM PRODUCTION ........................................................ 37 Globalization and Technological Advances ............................................................. 37 Infrastructure Construction Outside the United States ............................................ 37 Rising Costs .............................................................................................................. 38 Exchange Rates......................................................................................................... 40 Incentives .................................................................................................................. 41 THE IMPACT OF RUNAWAY PRODUCTION ON THE U.S. ECONOMY................................. 44 THE IMPACT OF RUNAWAY PRODUCTION ON THE CALIFORNIA ECONOMY .................... 46 SOME FILM PRODUCTION IS GOING TO OTHER STATES .................................................. 46 SOME FILM PRODUCTION IS GOING TO OTHER COUNTRIES, ESPECIALLY CANADA ....... 48 COMPARE MONITOR REPORT ESTIMATES OF U.S. JOB LOSSES WITH CANADIAN EMPLOYMENT ESTIMATES ............................................................................................. 50 POLICY OPTIONS ............................................................................................................ 52 III. SELECTED READING.......................................................................................... 57 REPORTS ABOUT THE U.S. FILM INDUSTRY:.................................................................. 57 REPORTS ON FOREIGN COUNTRY FILM PRODUCTION:.................................................... 59 ACADEMIC ARTICLES : ................................................................................................... 60 NEWS ARTICLES : ........................................................................................................... 62 APPENDIX A .................................................................................................................. 65 EMPLOYMENT ESTIMATES ............................................................................................. 65 SURVEY DATA ............................................................................................................... 65 UNIVERSE COUNT DATA................................................................................................ 67 NARROWER DEFINITIONS THAN THE MOTION PICTURE INDUSTRY................................ 69 BROADER DEFINITIONS THAN THE MOTION PICTURE INDUSTRY................................... 69 APPENDIX B .................................................................................................................. 79 DATA SOURCES FOR FILM INDUSTRY STATISTICS.......................................................... 79 APPENDIX C .................................................................................................................. 83 MULTIPLIER ESTIMATES ................................................................................................ 83 APPENDIX D .................................................................................................................. 85 ECONOMIC IMPACT METHODOLOGY .............................................................................. 85 APPENDIX E .................................................................................................................. 89 FINANCING AND TAX INCENTIVES .................................................................................. 89 INCENTIVES AND MARKETING EFFORTS IN OTHER STATES ............................................ 89 INCENTIVES AND MARKETING EFFORTS IN CANADA...................................................... 97 POLICIES AND MARKETING EFFORTS IN COUNTRIES OTHER THAN CANADA............... 102 APPENDIX F................................................................................................................. 107 FEDERAL AND CALIFORNIA LEGISLATION.................................................................... 107 FEDERAL LEGISLATION:............................................................................................... 107 107th Congress (2001-2002) ................................................................................... 107 106th Congress (1999-2000) ................................................................................... 107 105th Congress (1997-1998) ................................................................................... 108 CALIFORNIA LEGISLATION SUMMARY:........................................................................ 109 CALIFORNIA LEGISLATION - DESCRIPTIONS OF EACH BILL: ........................................ 111 2001-2002 Regular Session .................................................................................... 111 1999-2000 Regular Session .................................................................................... 112 1997-1998 Regular Session .................................................................................... 115 1995-1996 Regular Session .................................................................................... 117 1993-1994 Regular Session .................................................................................... 119 APPENDIX G ................................................................................................................ 121 1985 INTERIM HEARING ON RUNAWAY PRODUCTION.................................................. 121 ENDNOTES................................................................................................................... 123 EXECUTIVE SUMMARY The motion picture industry is part of California’s mystique. It is also an important part of the state’s economy. If we use standard aggregate numbers, motion picture production is our 18th largest industry by share of gross state product. Of those core industries that drive California’s economy by exporting goods outside the state, motion pictures are the tenth largest, and the fourth most rapidly growing. It is a high-wage sector, with average salaries 70 percent higher than salaries in other businesses statewide. Although there is no doubt that motion picture production is of major economic importance in California, attempts to quantify that importance are troubled by remarkable variation and statistical softness. For example, the Motion Picture Association of America estimates that the entertainment industry generated $27.5 billion in California in 1996, compared with a U.S. Bureau of Economic Analysis estimate of $13.1 billion.
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