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Tuesday, January 21, 2014

Hollywood Loses Shine for Big Budget Projects

The Hollywood Sign is seen on November 16, 2005 in Los Angeles, California. (David McNew/Getty Images)

A recent report found that only 8 percent of the top 25 live-action movies were filmed in California in 2013. (David McNew/Getty Images)

Film and television projects are leaving Hollywood in droves as states and foreign countries offer financial incentives to lure projects away.

A recent 20-year overview reports that in 1997, 68 percent of the top 25 live-action movies were filmed in California. That number dropped to 8 percent in 2013.

And while the number of Hollywood reality TV and online productions have risen in the past few years, that’s been offset by the number of long-form TV and film projects filmed elsewhere.

David Cohen of Variety joins Here & Now’s Jeremy Hobson to discuss whether California is losing its place as the home of entertainment.





And if you scanned the legislative agendas of statehouses around the country, you'll probably find the words "film tax credit." States from Virginia to Nevada to Missouri are either offering or considering offering tax incentives to film production companies, to try and lure business away from Hollywood. And a new study on the issue finds it's working.

According to FilmL.A., in 1997, 68 percent of the top 25 live-action movies were filmed in California; last year, just 8 percent. David Cohen is senior features editor at Variety, and he's with us now. And David, is California losing its place as the home of entertainment?

DAVID COHEN: It is certainly losing its place as the home of TV and entertainment production, and this is a cause for something akin to panic here in Southern California where this is a major industry and employer, and jobs are being hemorrhaged whether it's across the globe for visual effects and animation or to other states and nations who are offering generous tax incentives. The pursuit of tax incentives to support production is nothing less than an obsession here. You can't overstate how important that has become.

And what that really amounts to is taxpayers putting money in the pockets of large multinational corporations for the privilege of being able to have stars and camera crews come to their town or their city. And, you know, the thing is if you have a tax subsidy for something, you will get more of it. So we are getting more big, expensive movie productions; more television production in far-flung locations; whatever you can think of. It is distorting the market for better or worse.

HOBSON: And the proponents of it, of course, would say, you make a city like Baltimore look great on TV, people are going to visit. The tourism revenue will go way up and you get the money back in the end.

COHEN: The proponents of that always make those arguments, and yet at place after place and time after time, it has turned out that the economics don't really end up supporting those subsidies. That was the case in Michigan, and eventually they repealed them. There was a scandal about the subsidies in Iowa where it turned out I believe a producer was buying SUVs with the local subsidy and then reselling them at full price back in California.

And so place after place, has discovered these things are rife with corruption and they don't deliver the returns that they expect. But there's always another politician or another city that's willing to be seduced by Hollywood glamour. And so I'd - I would expect this to continue unabated for the foreseeable future.

HOBSON: And is California going to fight back in a big way?

COHEN: There's a lot of talk about it. But you know, the problem is in California that California is a very large and diverse state, and the Northern California lawmakers are unimpressed with the argument that they need to spend state money to - for the sake of supporting Warner Brothers. My thought is that there's a grand bargain here waiting to be struck, which is that there needs to be a deal with the Northern California marijuana producers and the Southern California entertainment industry...


COHEN: that we get marijuana legalization for the North and subsidies for the South, it will all work out for everybody.

HOBSON: I thought you were going to say something about Silicon Valley and maybe a tech tax loophole.

COHEN: You know, Silicon Valley and Hollywood have this strange relationship because the business cultures are so different, and each, sort of, eyes the other wondering, how can I do what that guy is doing? But that union has yet to fully take place. I think some of what you're seeing with Netflix and Amazon entering television production is the beginning of that union. But I think that the real opportunity there is the marijuana guys.

HOBSON: David Cohen is senior features editor and columnist at Variety. David, thanks so much.

COHEN: Thanks for having me. Transcript provided by NPR, Copyright NPR.

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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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