With Aerospace Ailing, Hollywood Looks to Be Region’s New Top Gun

Hooray for Hollywood--it may be providing as many jobs in Southern California as aerospace-defense ever did. But it’s hard to be certain, because statistics vary widely.

California’s Employment Development Department says there are 147,500 jobs in the motion picture industry, including television, up 12.5% over the last year and nine months.

Others, such as the state’s Department of Finance, believe job growth has been more rapid and that motion picture jobs now total 172,000.

That’s still shy of the peak for aerospace--265,000 jobs in 1989--but well ahead of the area’s 132,000 defense jobs currently.


And the movie-TV category is often understated because the business is so difficult to track, with its hundreds of small companies and connections to ancillary services such as food catering for film crews and construction of sets.

In any event, it’s certain the business that has been a mainstay of Southern California for 80 years is in one of its great growth periods. Movie production last year, at 439 films, was double that of 1991; television production is up comparably as Hollywood turns out features to feed the hungry maw of networks, cable channels and worldwide distribution of U.S. entertainment.

This makes jobs for camera workers and set builders as well as actors and directors. The Hollywood craft unions report increased memberships--something few unions can claim these days.

And jobs in motion pictures are healthy in the paycheck too--average wages of more than $39,000 a year come close to the aerospace-defense average of $43,000.

But it’s not a simple matter of one industry declining and another arising to take its place. In many ways, the business of making movies is more complex than the government-funded industry that made rockets and airplanes.

The money is less certain, the work more sporadic and decentralized--a different company is organized for each feature film, employees work on short-term contracts. The modern film and video business, like all industry these days, offers challenges along with opportunities for Southern California.

First of all, the business has yet to bring back high times of the 1980s, despite several years of good growth. Realtor Fred Sands, whose firm specializes in the Westside and the San Fernando Valley, reports that estate prices are rising in Beverly Hills and Bel-Air--after a 40% drop in the recession--as “producers, directors and stars are buying again.”

But he sees little quickening of activity or firming of prices in Valley communities from Studio City to Agoura where many industry workers live. The burden of foreclosed properties from the recession is still not totally worked off, Sands says.

Global markets are one important reason for the new boom. International film and video rentals and sales of television shows will total more than $8 billion this year, just shy of the total U.S. domestic market. No wonder sound stages are booked solid from Los Angeles to Ventura County and new facilities are being built in Glendale, Burbank and elsewhere.

Also, growing overseas business makes for new kinds of high-tech work back here. U.S. TV shows must be adapted for showing on European and Asian television screens, which define the picture more precisely--across 625 lines, compared to the 525 for the U.S. system.

So International Video Conversions of Burbank has grown to 100 employees and $15 million in sales doing the adaptations. Now it is taking on new work, adapting U.S. shows for Japan’s high-definition television, which has 1,125 lines.

As newer technologies come along, such as digital videodiscs, which will try to replace videocassettes starting next year, the region should benefit from new and different work.

That has been the pattern since 1914 when Cecil B. DeMille made “Squaw Man” in Southern California, for financial backers who at that time remained in the East. These days money flows to California from Canada and Australia, Europe and Japan, as well as Wall Street, to finance movies and video shows for the world market.

And with that renewed flow of money and bustling activity, after a drought in the early ‘90s, it would be easy to think that this region will always be blessed by the movie business.

But this is the time to be on guard, warns economist Stephen Levy, head of Palo Alto’s Center for the Continuing Study of the California Economy, which has just issued an optimistic forecast for the state.

The motion picture business is doing well, to be sure, Levy says. But it is an industry of smart people who are demanding and mobile, sought after by other regions and capable of moving if the local quality of life is not acceptable.

Thus public investment is needed to assure “good schools, low rates of congestion and crime, a clean environment and world-class recreational opportunities,” Levy says--without offering specifics on how problems of schools or crime can be solved.

Nonetheless, he has a point. Right now, Phoenix is doing everything it can to attract movie business. Local officials are declaring their willingness to help finance new sound stages in the Arizona city, and exulting in the animation studio Twentieth Century Fox is setting up there.

They know the kind of ripple effects in jobs and ancillary business that the movie and television industry brings.

And so, of course, should Southern California. So hooray for Hollywood--it can help banish those aerospace cares away if we hold on to it.


Growth Industry

Employment in motion picture and television production in Southern California has grown in the past two years. Monthly motion picture employment, in thousands:

September 1995: 147.8

Source: California Employment Development Department