New CEIDR Shows Runaway Productions Drains $23 Billion from U.S. Economy

A new CEIDR report, the first major study the group has released since 2001, shows that runaway production has siphoned away $23 billion from the U.S. economy. The country lost production as Canada passed new production tax subsidies in 1998.

Local 600's National Executive Board voted in June 2005 to invest $15,000 to help fund the report, which is considered the "gold standard" of research on the migration of U.S. feature film production to foreign countries.

The report, issued by the Center for Entertainment Industry Data and Research, showed that the U.S. economy lost $23 billion in economic benefits because of lost feature film production since 2000.

Before Canada introduced subsidies, feature filming was declining north of the U.S. border. Since subsidies were introduced in 1998, the number of feature film productions more than doubled. While the value of production grew by $610 million while that of the U.S. suffered a $560 million loss.

Between 1998 and 2005, spending on U.S.-based theatrical film production dropped 14% to $3.4 billion in 2005. Meanwhile, worldwide production spending rose 30% to $7.2 billion over the same period.

During that time, Canada saw its feature film production rise 179% to $1.2 billion and the U.K. and Ireland took in 66% more in film production dollars_ or $809 million. Production revenue in Australia/New Zealand grew 531% to $717 million while that of Eastern Europe shot up to 927% to $308 million.

Production of made-for-television movies plummeted from a peak of 182 in 1995 to 49 in 2003, a drop of 73 percent, before rebounding to 84 productions in 2005. Filming of scripted television grew 24% to 115 productions from 2000 to 2005, according to the CEIDR report.

Among the highlights of the report:

In 2000, the first year for films released subsequent to Candadian Tax Incentives, overall feature film production in Canada increased by 19 (106%) to total of 37 -- 92% of these films qualified fo the rebate.
The greatest growth in Canada were films with budgets greater than $50 million, which rose from 1 to 5 (400%), while in the U.S. they dropped from 31 to 26 (-16%).
The $20 million to $50 million budget range films in Canada increased from 6 to 12 (100%) and in the U.S. they fell from 44 to 28 (-36 percent).
In the $5 million to $50 million budget range, 31% of independently financed and 39% of studio financed films that shot in North America were made in Canada, while in the U.S., studio financed productions decreased by an unprecedented 43%.
Total estimated budgets for films shot in Canada increased by $610 million (149%) from 410 million in 1999 to 1.02 billion in 2000.
The average budget in Canada increased from $18.7 million to $27.6 million (48%) compared to a slight rise in teh U.S of $40.9 million to $31.2 million (1%).
A production that shoots in Canada verses the U.S. saves on average 10% to 15% of the overall budget. The savings to a producer of $3.5 million to $4.5 million on a $30 million picture represents a loss to the U.S. economy of $93 million and 900 to 1,200 jobs.
Interviews with filmmakers and other industry sources reveal that following the dramatic increase in production levels in Canada, there is significant evidence of difficulties in the production process that result in final film costs in excess of the original budgets along with talent, creative, technical and location problems.
By looking at the ratio of domestic box office receipts to budget (BO:B) on average, feature films that shot in Canada have performed poorly at the U.S. box-office, well behind films shot in the U.S. and worldwide.

For the full report of "The Migration of Feature
Film Production, visit http://www.ceidr.org/