The NEW Hollywood: Production Out / Tourism In

Buses packed with wide-eyed tourists on route to get a glimpse of celebrity mansions. Movie fans on their way to Mount Lee for an up-close of the 45ft. high 'Hollywood' sign. Worshipers kneeling on the pavement-embedded pink stars on the 'walk of fame' paying homage to favorite film stars.  Hollywood has become a shrine versus the movie making mecca it once was. 

Since the 1980s Hollywood has been losing out to less expensive production locations and now struggles economically, as U.S. states and other countries have increasing used aggressive tax incentives and other financial lures to gain the business of moviemaking.  "The tourists still come but what they're looking at is the past. It's an illusion" says two-time Oscar winning makeup artist Michele Burke, "The big films are not being made here. Everything has changed".

Movie and TV production is fleeing Los Angeles and California for other locales to save money. Termed 'runaway production' FilmLA, a non-profit organization that arranges filming permits, has called the flight "staggering".  Of the top 50 highest grossing films of 2012, only 4 were filmed in California.  Recent releases attest to this trend.  Iron Man 3 was shot in North Carolina, The Long Ranger in New Mexico, The Great Gatsby in Australia, Gravity in England.  All of the new episodes of Star Wars will be produced in England as well. 

Hollywood is full of abandoned sound stages and LA's new mayor, Eric Garcetti, has declared the situation a "Civic emergency. Entertainment is LA's signature industry, and we can't afford to lose it. It's about more than just Hollywood actors and stars - it's an industry of over 500,000 good paying jobs and I'm committed to doing everything I can to keep filming here in LA. California must offer better tax breaks and credits to compete with rivals including Canada and the UK."

For a big production, these incentives can add up to tens of millions of dollars. For example, Disney's Iron Man 3, which grossed over $1 billion, paid no tax to its host, North Carolina, because it was deemed a "temporary business entity".

Varese Sarabande, the world's largest producer of film scores, recorded just 20 scores in LA last year, compared with more than 100 five years ago. The lure is not just tax incentives but a willingness to forfeit secondary market residuals on future video sales and broadcasts on the part of many locales. "In London, you have a buyout option, select your rate and the recording is yours. There are no further tariffs.  In LA you have a never-ending payment stream," says Robert Townson, Sarabande's VP.

Hollywood's demise is invisible to movie fans. When LA based Rhythm & Hues won the best visual effects Oscar for Life of Pi last year, very few knew that it was in bankruptcy.  Outside the Oscar venue hundreds of visual-effects artists protested but they were kept away from the red carpet. Remember: Hollywood is all about glitz and glamor and it remains so to the millions of movie fans worldwide.

Best
Jim