The Center for Entertainment
Dedicated to the development of an informormed U.S. Production industry that will collaborate, strategize, advance artistically and technically and aggressively market itself as a competive production venue in an increasingly global economy
On July 30th 2006, the 2005 CEIDR report was released. This report drives home how devastated the once thriving American film industry has become.
Something has to change and it has to be now.
That Something is filing a 301 (a) petition with the United States Trade Representative (USTR)
From The Trades
From The Daily Variety
July, 31st 2006
Study: Pic biz in big production pickle
By DAVE MCNARY
From The Hollywood Reporter
August, 1st 2006
Runaway prod'n costs U.S. dearly
By HR Staff
The Global Success of Production Tax Incentives and the Migration of Feature Film Production From The U.S. to the World Year 2005 Production Report
Feature Films 1998-2005 Made-For-Television-Movies 1977-2005 and Broadcast and Cable Television 2000-2005 Copyright 2006 – All Rights Reserved
THE CENTER FOR ENTERTAINMENT INDUSTRY DATA AND RESEARCH www.ceidr.org
This is an in-depth follow-up study to our Year 2001 Production Report on the global production of theatrical length motion pictures produced domestically for release in U.S. theatres (“Theatrical Releases”), a microcosm of overall U.S. entertainment production. The current report covers the period from 1998 through 2005, inclusive, and its scope has been broadened to include a review of trends in other types of production, including: broadcast television, made-for-television-movies and mini-series.
The title of the 2001 Report, “The Migration of Feature Film Production from the U.S. to Canada and Beyond,” has proven prescient. Countries around the world took note of the dramatic results from the Canadian Tax Incentive Model for production and have successfully emulated these programs. . . . (T)he data over the past several years strongly suggests that proliferation of production subsidies around the globe has been one of the most significant factors affecting the choice of production venues for a significant volume of production.
- Worldwide, production dollars spent on Theatrical Releases expanded from $5,557 million in 1998 to $7,205 million in 2005 (30%).
- Despite the 30% growth in overall production, the dollar volume of Theatrical Release production in the U.S. declined from $3,927 million in 1998 to $3,378 million in 2005 (-14%).
- The dollar volume of Theatrical Releases filmed outside the U.S. more than doubled growing from $1,630 million in 1998 to $3,828 million in 2005 (135%).
- The U.S. market share of production dollars of Theatrical Releases plummeted from 71% in 1998 to 47% in 2005. Correspondingly, the percentage of Theatrical Releases filmed elsewhere in the world grew from 29% to 53%.
- Using standard industry metrics of a 3.3 multiplier for direct expenditure and 400 jobs per $10 million in production expenditures, the decrease in U.S. production of Theatrical Releases represents a cumulative loss to the U.S. economy of $23 billion, and 47,000 jobs per year.
In a period of less than seven years, the U.S. went from being the location of choice for the production of more than two-thirds of Theatrical Releases to the venue of choice for now less than 50%, measured both by production dollar volume and number of films. Even more significantly, during this same period the U.S. share of production for large budget films over $50 million fell from 76% to 43%. . . . production incentives . . . have been a significant factor in the export of billions of dollars in jobs and the development of production infrastructure throughout the world.
The effect on production of Theatrical Releases appears most profound when the decision has been made to relocate the production from California to pursue the economic benefits of various incentive programs. While the various state programs have resulted in shifts of production volume between states competing for films not shooting in California, they have not been as successful in attracting production as the combined federal and local offerings in many foreign venues.
Made-For-Television Movies And Miniseries
- The number of broadcast and cable network made-for-television-movies and miniseries that filmed worldwide grew from 76 in 1976 to a peak of 328 in 1996 (332%) then declined to 198 in 2005 (-40%).
- Broadcast network made-for-television-movies and miniseries grew from 76 in 1976 to a peak of 190 in 1994 (150%) then fell to 36 in 2005 (-81%).
- Movies made for cable networks rose from 7 in 1983 to 185 in 1999 (2543%) then dropped to 144 in 2003, 2004 (-22%) and rebounding to 162 in 2005 (13%).
- Production of made-for-television-movies in the U.S. collapsed from a high of 182 in 1995 to 49 in 2003 (-73%) then bounced back to 84 in 2005 (71%).
- Production in Canada rose from 7 in 1984 to a peak of 132 in 2000 (1786%) then fell to 76 in 2005 (-42%).
- From 1976 to 2005 on average there were 18 miniseries produced yearly. The genre peaked in 2001 with 32 productions, in 2005, 8 were produced (-75%).
Interestingly, although, Canada became the venue of choice for the majority of this type of production in North America commencing in 1998, the U.S. regained the relative edge following the American Jobs Creation Act of 2004 which provides considerable benefit to producers of this type of product.
Broadcast And Cable Television (Series) Production
. . . the total number of prime time one-hour and half-hour scripted and reality broadcast and cable programs that aired on U.S. television grew from 147 in 2000 to 326 in 2005 (122%). Scripted programs grew from 123 in 2000 to 152 in 2005 (24%), for the same period the number of realty programs grew from 24 to 174 (625%). In 2000, 84% of one-hour and half-hour programs were scripted and 16% reality, in 2005, 47% were scripted and 53% were reality.
- Filming of scripted television in the U.S. grew from 93 in 2000 to 115 in 2005 (24%).
- The number of scripted programs that filmed in Canada fell from 26 in 2000 to 20 in 2005 (-23%).
- Of scripted programs in the U.S., in 2000, 83% filmed in California and 17% filmed in the rest of the U.S., in 2005, the breakdown was the same.
- The number of productions in the rest of the U.S. fell from 16 in 2000 to 13 in 2001-2003 (-19%), and then rebounded to 20 in 2005 (54%).
- The number of scripted broadcast network productions was 89 in 2000 and 89 in 2005 (0%).
- Scripted programming on cable grew from 34 in 2000 to 63 in 2005 (85%).
. . . the production of Broadcast and Cable Television (series) has been the product-type most resistant to migration from the U.S. These is most likely attributable to the fact that it is more difficult to relocate the necessary American talent to foreign venues for a 9 month production over a period of years than it is to relocate talent for a 3-month secondment for a feature film.
(Editorial comment: A number of factors must be considered when drawing conclusions from CEIDR’s television numbers:
- Changes in the types of programming aired by both broadcast and cable networks, which have resulted in decreased demand for miniseries and made-for-television movies and increased demand for other types of programming, such as reality, instead.
- At the same time, increases in the number of cable networks and in the number of cable networks creating original scripted and reality shows, movies and miniseries.
- The fact that 30 minute scripted television shows are virtually always shot in the U.S.
- The dramatic increase in reality television, which distorts the overall television production numbers because reality television is overwhelmingly produced in the United States. Sources in Canada have cited the explosion of reality television as one of several reasons for the recent slight decline in television production Canada has experienced.
- The fact that reality television has considerably less economic impact than scripted television.
However, when CEIDR’s figures for all scripted television (half hour series, one hour series, movies for television and miniseries) are added together they show that, even with the possible influence of the American Jobs Creation Act of 2004 and numerous state incentive programs, 43% of all broadcast and cable network scripted production was still done outside of the U.S. in 2005. Since half hour scripted programs almost invariably shoot in the U.S., when their number is subtracted from the total of all scripted production the share of scripted programs shot outside the U.S. in 2005 climbs to 53%.)
TV series producers appear to be the major beneficiaries thus far from a federal tax break aimed at keeping small-budget features from fleeing the U.S. . . . The improvement in scripted broadcast and cable production in the U.S. and the subsequent decrease in Canada could be in part the influence of the American Jobs Creation Act of 2004 as the nature of television production makes it comparatively straightforward to qualify. The tax break, referred to as Section 181, was a small element of a $136 billion corporate tax bill aimed at ending a contentious trade dispute with Europe.
Many a producer will tell you that if not for production incentives, whether they are foreign or domestic, their movie would not have been made. The incentives offered by other countries along with favorable currency exchange rates can be very lucrative, saving the 10% to 15% of the total budget. Also, more and more countries are offering incentives that include visual effects and postproduction, a significant employer, and up to now dominated by the U.S.
U.S. state incentives are working, but it is not clear if they are they keeping production from leaving the U.S., or just moving them from one U.S. location to another, especially if a location doesn't offer any incentive.
In the world today, globalization is an economic fact of life. Companies across the world are seeking lower costs of manufacturing, distribution and operations. The growth of foreign production of U.S. originated entertainment product, however, seems, to a significant measure, to be driven by economic subsidies to producers . . . .
NOTE: Emphases added.
All Of the CEIDR Reports can be found online here
The following organizations provided essential financial support to the 2005 CEIDR report:
International Cinematographers Guild, IATSE Local 600
Screen Actors Guild (SAG)
International Association of Operative Plasterers and Cement Masons Local 755
Studio Utility Employees Local 724
Affiliated Property Craftspersons IATSE Local 44
Script Supervisors/Continuity & Allied Production Specialists Guild IATSE Local 871
Production Sound Technicians, Television Engineers, Video Assist Technicians, and Studio Projectionists IATSE Local 695
Studio Electrical Lighting Technicians IATSE Local 728
The Animation Guild IATSE Local 839
And Private Donors