Analysis: Hollywood business, mixed report

LOS ANGELES, Jan. 20 (UPI) -- A pair of new reports suggests that the Hollywood entertainment industry is having some success fighting runaway production but still faces tough competition from other states and countries in attracting movie and TV production.

According to a report by the Entertainment Industry Development Corp. -- a non-profit corporation that works with producers and local governments to promote film and TV production in Los Angeles -- a key component of film and TV production in Los Angeles turned in a record-setting performance in 2004. The EIDC said that producers logged more than 52,000 location production days last year -- a 19-percent increase over the number of location production days in 2003.

Location production is defined as film and TV production on locations other than soundstages and studios.

A second report -- "Recapturing the Dream: A Winning Strategy for the LA Region," issued by the Los Angeles County Economic Development Corporation -- is less a report card on past economic activity than a call to action for leaders in all sectors of the California economy to develop a new strategy for growth. LAEDC Senior Vice President and Chief Economist Jack Kyser told United Press International the entertainment industry faces the same two major challenges as the other segments of the economy: structural change and increasingly intense competition.

"Structural change comes, obviously, from the move to digital technology and challenges in terms of piracy," he said. "Intense competition comes from all the other states in the United States offering incentives to bring production there -- including New Mexico, Louisiana, Florida, New York, Pennsylvania and Illinois."

According to the EIDC the increase in location production days last year was due largely to growth in reality programming, but another contributing factor was a reduction in movie and TV production in Canada. EIDC President Steve MacDonald said that was largely the result of a development that will not likely be sustained: the relative weakness of the Canadian dollar to the U.S. dollar.

"That's been helpful in driving features back (to Southern California)," he said, "but that's not something we want to hang our hat on, because it's going to change over time."

Much of the growth in location shooting in Los Angeles last year occurred during the summer. MacDonald said that could signal a new operating procedure in Hollywood -- one that is less reliant on the traditional production schedule in which TV series were cast, shot and marketed at the same time each year, and new shows almost always premiered in the fall.

"It used to be that the year was very seasonal and you'd have these peaks and valleys surrounding pilot seasons and fall schedules," he said. "Now you have year-round production."

A main reason for the change is the proliferation of entertainment sources -- including cable networks that have become increasingly competitive with broadcast networks by, among other things, presenting new, original programming. HBO, Showtime and even ESPN have all become significant players in original programming on TV.

"Cable networks got their hooks into audiences by showing original programming when networks were showing repeats," said MacDonald. "Now, even on the broadcast side, there's less reliance on the old schedules and on repeats."

MacDonald said reality shows accounted for a significant portion of production in 2004, but he said that type of activity dropped off during the second half of the year.

"We started measuring reality as a separate category in July," he said. "It dropped off from July to December, and there was a corresponding up-tick in scripted dramas such as 'Desperate Housewives.'"

Production on reality shows might be healthy for the regional economy, but Pamm Fair, deputy national executive director of the Screen Actors Guild, said it isn't such a great deal for SAG members.

"Reality programming displaces the ensemble cast," she said. "With over 20 hours of reality in prime time programming, that takes a huge bite out of the ability of our work force to work."

However, she said the increase in original programming on cable has been "encouraging" to SAG.

Location production days on feature films in Los Angeles were up 18 percent from 2003 to 2004 -- but MacDonald said that figure was down 13 percent from 1996, its high point during the past 10 years.

"Every one of those location days means jobs and economic impact, significant economic impact, to the region," he said. "We need to do everything we can to keep television and movie and commercial production business here in Los Angeles."

Kyser said part of Hollywood's response to that challenge should be to play up the entertainment industry's working-class aspect -- the electricians, carpenters and other craft-union people who work "below the line" on movies and TV shows. But he conceded that's a tough sell, given the strong media and public appetite for news and gossip about celebrities.

"They don't see the below-the-line workers who might not have a job because a production has gone to New York or New Mexico," he said.

Kyser also said the state of California should offer more incentives to producers to keep work in Los Angeles.

"The response in Sacramento is, 'We're broke and they don't need it anyway,'" he said. "But a lot of tax revenue is generated just by the production of the film, let alone by the personal income taxes of people who work on the productions."

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