The level of runaway production has abated recently and the decline of the United States dollar is a major reason why. With Hollywood constantly fixated on “the bottom line,” companies have been finding it more cost effective to shoot in Hollywood. Indeed Canada, a major film haven in recent years, has experienced its first drop in domestic production in more than a decade. Meanwhile, the Entertainment Industry Development Corp. reported last month that film and television production spiked 19.2 percent over 2003 in Los Angeles County. Steve McDonald, president of the EIDC, maintains that dollar depreciation has definitely helped to stem runaway production. However, McDonald remains concerned that when the dollar eventually rises, runaway production will exceed its prior levels. “The most dramatic development has been the change in the value of the dollar versus the Canadian dollar. But most would agree that it can’t stay at this low forever. But we don’t know when it will rise,” McDonald said. “Canada has increased its incentives to deal with their decline in production. Runaway production will remain a real problem until someone deals with it in concrete terms. The increase in local production certainly was a reaction to the impact that the weak dollar has had. However, the real issue is what we’re going to do to enact a lasting solution.” Another result of the weak dollar has been an increase in the number of foreign commercial producers coming to the region to take advantage of the comparably low prices. “I’ve been told that foreign commercial producers in Germany, Japan, and all across Europe have come here to shoot because of the weak dollar. Producers of all types are always looking to where it will be most cost-effective,” Steve Caplan, executive vice-president of the Association of Independent Commercial Producers, said. “But these things are cyclical and production rates change. It’s important for Los Angeles to have a sound long term strategy for production. Today the exchange rate works for us, tomorrow it might not.” Small effects houses had been particularly decimated by the plague of runaway production. They welcome the current situation as a welcome trend. “It’s having a beneficial effect on everyone, but particularly the little guys. If one film doesn’t go away and stays home, it gives us a chance. If you land one film with a decent sized budget, it keeps your business alive for another year. It makes a huge difference,” Gene Warren Jr., the co-owner of Burbank-based effect house, Fantasy II Effects said. Warren, also one of the co-chairs of the Studio City-based Film and Television Action Committee, expressed concern about what might happen to small production companies when the dollar stops sliding. “Over the last six months, Canada has raised all of their subsidies because of the drop in the dollar. They have to raise the amount of money they offer to stay in parity, meaning an unfair advantage. It’s an artificial way to impact the market. To keep the playing field level they had to raise their subsidies,” Warren said. While most parties agree that a viable plan needs to be put in place to permanently halt runaway production, little is being done. “We’ve looked for solutions on all levels. The state is doing nothing about providing incentives,” Greg Lippe, the co-chair of the Valley Industrial and Commerce Association’s state issues committee, said. “It’s kind of a wait and see thing. We’ve pretty much done all we can do. The state doesn’t have any money to provide any benefits right now.” Yet McDonald remains hopeful that in the future, a solution can be brokered that will satisfy the anxious local entertainment industry. “We’re doing the best that we can to solve this issue. There’s been a lot of discussion with the governor’s office. We’ve been working with the mayor and the city. We’ll see what happens,” McDonald said.