L.A. film, TV shoots in a slump
Location filming for movies and TV commercials on the streets of Los Angeles, once as prevalent as the corner taco truck, is rapidly fading to black. Double whammies of the recession and out-of-state economic incentives for producers have caused on-location film shoots in the Los Angeles area to fall to their lowest levels on record.
Since the collapse of Southern California’s aerospace industry a decade ago, the labor-intensive entertainment industry, in which hundreds of people are needed to make a single movie or TV commercial, has picked up the slack in the local economy. But as Hollywood and Madison Avenue respond to lower consumer spending by reining in production of movies and commercials, the pullbacks are having a dire effect on workers in the industry.
Despite a strong start to the year at the box office, studios are reducing the number of movies they produce and laying off thousands of employees in response to weakening DVD sales, declining local TV ad revenue and diminishing sources of financing.
Adding to the pain, advertisers, which have provided steady work for many actors and jobs for production workers, are making fewer commercials. They are trimming marketing budgets as consumers cut back purchases of both household and big-ticket items.
Los Angeles’ entertainment industry lost more than 22,000 jobs in January alone, more than any other sector, according to the California Employment Development Department -- roughly 10% of the available workforce. The entertainment industry employs more than 200,000 people and pumps $20 billion to $30 billion into the local economy, the Los Angeles County Economic Development Corp. estimates.
“A combination of limited financing, reduced studio budgets and reduced ad buying are all hitting Hollywood at the same time,” said Kevin Klowden, managing economist at the Milken Institute in Santa Monica. “The result is less production and clear job losses.”
The latest indicator that Los Angeles’ production industry is sharply losing altitude will come today, when the entity that processes permits for local film shooting reports a 56% plunge in activity for the first quarter, a new low. TV commercial production fell 34%, underscoring the deep cuts in advertiser spending that have occurred since the economy slipped into recession.
Only a smattering of movies, including a remake of “Fame” and “Alvin and the Chipmunks 2,” were shot on location in Los Angeles during the first quarter. Five major studio films are scheduled to be shot in L.A. this year, compared with about 15 last year, according to FilmL.A.
A lone bright spot: Location shoots for television shows surged 76% in the quarter. But comparisons in television activity are misleading because production was shut down last year because of the writers strike, inflating figures in the recent quarter.
Although film production is off industrywide, the decline has been exacerbated in Los Angeles by other states’ luring away film and TV producers with financial incentives. More than 30 states now offer tax credits and rebates that make it cheaper for filmmakers to make movies and TV shows outside California. Feature production in Los Angeles has declined in 10 of the last 12 years.
Under pressure to act, the state Legislature recently approved $500 million in tax credits for film and TV productions for five years. However, the tax credits won’t take effect until 2011. Moreover, the credits don’t include TV commercial productions and major films costing more than $75 million -- which is about the cost of the typical studio picture.
“Most big-budget feature films are not shot locally, and even independent filmmakers are shooting fewer days in our area,” FilmL.A. President Paul Audley said.
He said the film incentive program should be “expanded if California is to compete with incentive-rich states that have studio and talent infrastructures of their own.”
Two of the sectors hardest hit by the global economic downturn -- banking and automobiles -- also happen to be among the ad buyers that account for most of the commercial shoots in Los Angeles.
Detroit’s Big Three automakers, like other advertisers, have slashed their marketing budgets. The top 10 advertisers spent a total of $15.5 billion in 2008, 15% less than the year before, according to Nielsen Co.
“The first thing that always gets cut is the marketing budget,” said Frank Scherma, president of @Radical.media, a New York production company that has shot commercials for such clients as Domino’s Pizza, Gatorade and Mercedes-Benz. “It’s definitely slow across the board.”
Especially affected have been Hollywood’s below-the-line crew members, many of whom are struggling to recover from the fallout of last year’s 100-day writers strike. Although the strike ended a year ago, production didn’t bounce back for months, in part because of uncertainty surrounding contract negotiations with Hollywood’s biggest actors union, the Screen Actors Guild.
Fearing another Hollywood strike, studios rushed to complete most filming before the actors contract expired June 30, causing a severe drop in location shoots for the remainder of the year.
Although SAG and the studios now appear close to concluding an agreement, the stalemate continues to affect independent filmmakers. Without a final contract in place, insurance companies have been reluctant to issue completion bonds. Lenders require such bonds to guarantee that a movie will be done on time and within budget.
Chatsworth resident David K. Christenson, who drives production trucks, has been unemployed since November. Aside from a few days of driving on location for the CW series “90210,” he has been steadily out of work.
“I have a 3-year-old son and my wife has a kid on the way,” he said. “I’m rapidly approaching the point where I’m going to have to call my mortgage company and tell them I can’t make my next month’s payment.”