Wicker, H ~ Making a run for the border

Wicker, Heidi Sarah
Making a run for the border: should the United States stem runaway film and television production through tax and other financial incentives?

It is difficult to pinpoint “how many people are affected by runaway production because of the locomotive nature of the industry.”
“Entertainment executives counter the unions’ argument that the decline in production jobs is due to runaway production, saying that the decline is due to a decrease in the number of films made per year and other efforts to cut costs as above-the-line production costs rise while profit margins fall.”

“Proponents of a petition filed with the Commerce Department in late 2001 supported regulations compelling tariffs equal to the amount of the Canadian subsidy of a particular film or television production to be paid in order for it to be distributed in the United States.”

“Other labor groups such as the MPAA, DGA, the International Alliance of Theatrical State Employees (IATSE), and the American Federation of Television and Radio Artists (AFTRA) opposed countervailing tariffs because a possible trade war could result in the loss of thousands of jobs.”
“The petition was withdrawn in January 2002 without prejudice.”

One of the historical benefits of working with a union is that the producing company is assured a certain standard of work and experience, without having to bargain about the workers’ rates and benefits.

“Co-productions are beneficial because they decrease the costs for all parties; foreign entities view them as a “vehicle for collaboration with Americans who excel in technical and creative expertise” and, as a result, better equip them to compete with Hollywood.”
partnerships generally permit filmmakers greater creative control than if a major studio were the backer of the film or program.
From the corporate point-of-view, producing in the United States is no longer cost efficient.

“While a higher percentage of Canadian workers are unionized than their United States counterparts, the average wage for below-the-line workers is less than in the United States. Further, the “costs related to the acquisition and production of a movie prior to its release,” so-called “negative costs,” doubled between 1990 and 1999, as did the average distribution costs. Entertainment conglomerates dealt with this reality in the 1990s via vertical integration, layoffs, co-productions and other joint ventures, and by conducting more aggressive market research prior to production and distribution.

“”We don’t want to do a TV show in Canada called ‘Pasadena,’ but we can’t justify to our parent company the extra $200,000 per episode it costs to shoot here.””
Production revenues in British Columbia, where the popular production city of Vancouver is located, were about $1.2 billion in 2000, compared to $43 billion in revenue for California, furthering the Canadians’ argument that their industry is infinitesimal compared to that of the United States.”

“The concept of tax credits for labor expenditures has been gaining support amongst legislators and within the entertainment industry.”
Ever since the 1920s […] the entertainment industry has been largely self-regulated.

“North Carolina has consistently ranked as the third highest production center in the country since the mid-1980s.”

From the signing of the Declaration of Independence, capitalism has ruled the federal government’s approach to the arts.
“The U.S. government should be cautious in its approach, however, not to favor independent or television productions over high-budget feature films, since in the aggregate, high-budget productions do the most damage when they flee U.S. shores. Federal involvement through retraining and displaced worker assistance programs is the least intrusive option.”
“Accepting that runaway production will occur and dealing with the consequences may be a more prudent approach than trying to direct the economics of the entertainment industry from the outset of production.”

In a competitive international marketplace it is neither realistic nor economically practical to completely halt runaway production.

About the author

Woitek Konzal

Producer, Consultant, Lecturer & Researcher. I love working where technology meets media in novel ways. Once, I even won an Emmy for digital innovation doing that. Be it for a small but exciting campaign about underground electronic music collectives or for a monster project combining two movies, various 360° videos, 72 ARG-like mini puzzles, and a Unity game, all wrapped up in one cross-platform app – I have proven my ability to adapt to what is required. This passion for novel technologies has regularly allowed me to cross paths with tech startups – an industry and philosophy I am all set to engage with more. I intensely enjoy balancing out my practical work with academic research, teaching, and consulting. Also, I have a PhD in Creative Industries, a M.Sc. in Business Administration, and love to kitesurf.

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