Valley Forum: Has Runaway Film Production Hurt You? According to a recent UCLA forecast on entertainment and the Los Angeles economy, runaway film production cost the industry almost 18,000 jobs in 2001. So, the San Fernando Valley Business Journal asks: How has the runaway film production issue affected your business? Talaat Captan President Air Hollywood San Fernando We are losing an average of 30 to 35 percent of production (that is) going to Canada, Australia and Mexico. We are fighting, not the production companies, but the currency exchange. In the U.S., you spend one dollar; in Canada, you get twice as much in value. The government of Canada is very much involved in keeping the production appealing and they continue to offer special deals to production companies. In addition, our unions are driving our production out of town. Hillard Fitzkee President Total Digital Productions Glendale The real problem is not really the individual employees, but the production companies who haven’t managed their companies well. We produce movies for the Spanish film market, in addition to commercials and talking head shows. Producing films in other countries are most cost-effective, depending on the country and its economy. It’s less expensive in other countries due to labor costs. George Taweel Partner TLC Entertainment Studio City It has dramatically affected our business in a negative way. However, this is a complicated issue. U.S. audience concentration in any one medium, especially in television, has fragmented and therefore lowers the license fees producers receive for their products. Vertical integration has all but eradicated the once lucrative ancillary profit centers that were available for producers to make up the deficits for initial production. Economic incentives that other countries, cities and states offer lower production costs and pull shows away from California. Some unions in other territories outside the U.S. are able to offer talent buyout provisions or more favorable residual formulae for certain services and therefore lower the overall cost of exploitation for a project. Foreign government subsidies, tax rebates, treaties and other incentives pull production away. And finally, the talent base and quality of talent in other locations has risen in many instances to where they are now fairly competitive with what we have here in Southern California. Lyn Henderson President L.A. Animation Burbank The runaway film issue did not affect our company. Our company is an independent production company and produces animated products, mainly in children’s entertainment, television and film series. We export most of our films and therefore enhance the U.S. economy. Mike Thompson Vice President ICS Services Inc. Glendale It would not affect our company at all. Our business cleans film before going into the international market; our business has nothing to do with the production aspects. I believe industries such as the catering services, multiple lighting companies, rental facilities, local commerce and financial institutions are affected.
Valley Forum: Has Runaway Film Production Hurt You?