Luring the latest Hollywood blockbuster is just the latest in a long series of economic development policies based on bribes… er… I mean incentives. Alan Greenblatt of Governing takes a good hard look, and finds lots and lots of waste and opportunity costs (via Planetizen).
During the past fiscal year, according to a recent study, New Mexico granted $38.2 million in tax rebates for TV and movie production, but in return saw only enough increase in economic activity to generate $5.5 million in public revenue. “For every one dollar in rebate,” the study concluded, “the state only received 14.44 cents in return.”
Over the past five years, all but 10 states and some cities have created film-incentive programs. This has spread production around, but no one has come up with a formula that can be shown to provide a net economic benefit for the state or locality itself …
The problem is that there’s not enough production to support ongoing film work everywhere. And, with most states competing to attract such business, it’s going to be doubly hard for many of them to remain viable locations. “States are auctioning off their revenues in order to attract this particular industry,” says Michigan state Senator Nancy Cassis. “As soon as one state outbids another, the film producers will be out of there in a nanosecond.”
January 12th, 2009 at 10:01 am
Something related happened in Ireland around three or four years ago.
The Irish state offered tax breaks to “artists” and there was a flourishing of music and arts from Ireland. Then these incentives were withdrawn and hey presto, the artists and muzos left quicker than you can put together five good looking men and make a mint byt selling pop CDs to pubescent girls (which is pretty quickly).
January 12th, 2009 at 1:26 pm
It has gotten to the point where nearly every state offers tax incentives, so with that “level playing field”, the decision as to where to film a movie reverts back to whether that location offers a compelling reason (i.e. scenic vistas, urban atmosphere, etc.) outside of those tax incentives. Besides, if the only objective for a filmmaker is to save costs, then he or she would simply go north of the border to Canada, which has a huge and relatively low-cost infrastructure to support the movie industry.
I also think that it’s very unreasonable for any state to believe that it can create and maintain a sustainable film industry simply through tax incentives (just as it’s very unreasonable for any state to believe that it can create its own version of Silicon Valley simply through tax incentives for tech companies). Even cities that have long histories of film production, such as New York City and Chicago, go through boom-and-bust periods that make it very hard to build a sustainable film industry infrastructure. For instance, Chicago had several very high-profile Hollywood projects filming at the same time in 2007 (i.e. The Dark Knight, Wanted, etc.) where local production staffing companies were completely swamped and you couldn’t walk around town without running into a film set. One year later, in 2008, there weren’t any major Hollywood movie projects (although a couple TV shows filmed here). The film industry is simply very unpredictable outside of established hubs like L.A. and Toronto.
January 12th, 2009 at 4:26 pm
Just as many places are trying to become the next Napa wine country or the next Silicon Valley, they’re trying to be the next Hollywood. If the aim is to lure blockbusters or become the world’s next film capital, it’s probably a waste of money. But if it’s part of a strategy to establish or strengthen a creative center, then a case might be made for movie incentives as a way to support local actors, talent agencies, film companies, etc. Building a mix of film, wine, high tech and others is a good strategy for imbedding the creative class. I don’t know if most states or cities are thinking that far ahead.
I have a friend, a young pretty Asian woman whose main job is as a personal trainer. She also does occasional film extra and commercial jobs. She’s an example of the film infrastructure that the occasional major movie helps to maintain in Portland.
January 12th, 2009 at 6:03 pm
Following up Michael’s point: if the goal is to make your town attractive to the young and mobile creative class, the ‘fun factor’ or civic pride might justify some government subsidy of film. I lived in Philadelphia in the early 80s, when they were filming the movie Trading Places. One day I happened upon them shooting on location – the scene where Jamie Lee Curtis accosts Dan Ackroyd on the steps of a police station. I still get a kick out of seeing ‘my’ scene in the completed movie. It was grand fun to live in a big city where this sort of encounter could happen.
It also is a pleasure to see a movie that has been filmed in a town you know well. You feel honored that your town’s distinctive qualities will be shown to the world. There is the unintended hilarity when the hero turns a corner, and suddenly he’s someplace halfway across town. It makes you feel special, in-on-the-joke, to catch what most of the audience will miss. I think the chance to have this sort of experience would be highly attractive to young creative-class professionals.
The issue of subsidizing film should be viewed in the context of government subsidy of any sort of art. Cities that are reluctant to subsidize controversial art, or art at all, seem happy to fork over the dough when the medium is film. Would the town be better served to buy a public fountain or a concert hall that can be enjoyed for years, compared to a medium as ephemeral as film? Can a town get away with public support of art because the cost is listed in the budget as ‘attracting industry’? My personal preference would be to spend the $$$ on beautiful public gardens, but if all I can get is the occasional film crew, I’ll settle for that.
January 12th, 2009 at 11:34 pm
Zoe,
I totally get this “town pride” point of yours. In fact, I think many New Mexicans would tolerate the results of this study because the subsidies have put their neglected piece of the world in front of millions in films like No Country for Old Men. New Mexico is certainly one of the country’s most forgotten places, and there is this collective neurosis/pride about being so forgotten/distinctive. Big Bill Richardson tapped into this with his film initiatives. And not just film either. College football fans can thank Mr Richardson for the “New Mexico Bowl” and for the state’s gaudy floats at recent Rose Bowl Parades. And then there are the Time’s Square ads…
But do these civic pride efforts make for good policy? I don’t think so. They are all tremendously elaborate, and expensive attempts to make the state into a bigger backdrop, and perhaps for a time “the best backdrop in the union”. This is a tragic way to go about becoming more notable. More talented people will move to New Mexico, when it becomes more livable. And if the state still feels as though it wants a piece of Hollywood, it should create linkages between its fantastic technology base and CGI or post production activity.
January 13th, 2009 at 2:03 am
It’s not American or funded by incentives but Slumdog Millionaire, which just swept the Golden Globes, is probably the best portrait of a modern developing world mega-city we’re likely to see. The views of Mumbai — the huge slums and garbage dumps, people washing clothes by slamming them on rocks, the new McMansion already surrounded by a mass of skyscrapers, the many faces of organized crime, the booming middle class, all juxtaposed — are the best city portrait since the opening scene of Woody Allen’s Manhattan.
January 13th, 2009 at 5:30 am
Slumdog Millionaire is funded by Celedor Films, who used to own the rights to “Who Wants to Be a Millionaire” – and guess what the plot of the film is based around, and guess which programme features in the background of many of the shots?
Another recent UK film, “Somers Town” about teenage boys who pursue a French waitress back to Paris by train, is – surprise surprise – funded by Eurostar, who operate the London to Paris train service.
We objected to the soviet union funding “socialist realist” films on the grounds of state propaganda etc, but when corporate cash funds films, they get the kind of praise seen in the post above. Love the double standards…
http://www.newstatesman.com/film/2009/01/slumdog-millionaire-boyle
January 14th, 2009 at 6:34 pm
Solid points on the desire to build the next ‘hollywood’. I think far too many cities see film as silver bullet route to attracting the creative class.
If the focus shifts to incentives for local film the impression can last much longer. Local jobs, local real estate purchase or rental, direct spin-off to other business, and relationships that last beyond “I think Wood Harelson is on Locke Street eating bagels – yeeheehee”.
The trick then becomes fostering a local industry that also provides access to distribution and commercialization of locally produced film.
Films look really bad on a shelf.
January 15th, 2009 at 4:15 pm
Jeremy,
Good points. And for cities that rank in MovieMaker’s top 10 for independent film, incentives to bring in major studios and big films can be worthwhile, providing business and jobs for local companies and actors, not to mention encouragement and credits. When national directors, etc. are in town they can help make contacts for distribution and commercialization.
Portland as a case in point. If Gus Van Sant hadn’t made Drugstore Cowboy and My Own Private Idaho as local independents, he probably wouldn’t have gone on to make Good Will Hunting or Milk.
But as Patrick says, I don’t see much value in incentives for a locale to be used just for backdrop scenery.
January 20th, 2009 at 10:11 am
Re: Robert’s point. If the intent of Celedor Films was to promote “Who Wants to be a Millionaire,” I’m not sure a movie in which the show’s host tries to rig the game by feeding the contestant a wrong answer, and then arranges for his torture at the hands of the police, is the right vehicle. I have not been to Mumbai, but I agree with Michael’s review.