NCPA - National Center for Policy Analysis

Film Flight: Lost Production And Its Economic Impact On California

August 13, 2010

Movie projects can move -- and when they do, they take with them millions of dollars in lost local spending.  "Film Flight," a research report issued by the Milken Institute's California Center, 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. 

Other 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.
  • Job 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.  

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.   "The Blind Side," "No Country for Old Men," "Twilight: Eclipse," "The Green Lantern," "The Incredible Hulk" and "Gran Torino" are among the many movies that have been filmed outside of California in recent years.  California even lost out on "Battle: Los Angeles," which is being shot in Louisiana (with Shreveport standing in for Santa Monica), says the Milken Institute. 

To remedy the job losses, the Milken Institute recommends: 

  • Implementing a new digital-media tax credit to attract and retain developers of digital animation, visual effects and video games.
  • Making tax incentive programs permanent, signaling long-term commitment. 

Source: Kevin Klowden, Anusuya Chatterjee and Candice Flor Hynek, "Film Flight: Lost Production and Its Economic Impact on California," Milken Institute, July 22, 2010.   

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