Los Angeles On-Location Film Permits Increase By 16% in 2010

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Compared to a 23 percent decline in production permits issued in 2009 in the county, the uptick is a sign that an economic recovery is under way.

The number on location film permits in Los Angeles County issued in 2010 for movies, TV and commercials production jumped an impressive 16 percent after declining by 23 percent in the previous year, according to a report by the L.A. County Economic Development Corp.

It’s a sign that the recession is over and that an economic recovery is under way in Southern California, especially for the entertainment industry.

“Compared with a year ago, there is a huge change,” said Nancy Sidhu, the country’s chief economist and one of the authors of the 2011-12 Economic Forecast & Industry Outlook.

Sidhu said the L.A. economy is starting on the path to recovery. “It looks to me like that substantial activity will continue this year,” she said.

A key breakout measure is the number of film production days that required permits. That doesn’t include the projects made on studio lots, but Sidhu said that “when you talk to studio people, they say, ‘Hey, we were busy.’ So you know it is going on inside the studios too.”

The number of film production days measured by FilmL.A. rose 15 percent in 2010 to 43,646 days, compared to 37,979 in 2009. However, that remains below the peak year of 2006, when FilmL.A. recorded 55,400 days.

According to the report, TV show permits climbed 12 percent year to year, and commercials permits shot up 28 percent.  

“We’re making progress,” Sidhu said. “That’s the kind of year 2011 is, a year of progress and improvement everywhere I look.”

There is jobs progress as well. The movie and TV production sector in 2010 added 16,500 employees, a 13.4 percent improvement, which according to the report made it one of the fastest-growing segments.

In December, Sidhu said, there were 144,400 people employed in the motion picture industry (which does not include independent contractors). That compares with 130,400 in the same month a year earlier. “So it’s a big increase,” Sidhu said. “It is mostly studio employment, and it is substantial in terms of everything that went on last year.”

The peak year for jobs was 1999, when 146,3000 people were employed in movies and sound recording.

There also is positive indications for those concerned about runaway production.

“The outward migration of film production was slowed by the state’s program of film tax credits,” says the study, which notes that California granted $300 million in tax credits to more than 100 projects in 2009-10. That program provided a 20 percent to 25 percent tax credit on qualified production expenses, which could be used to offset state income tax or sales tax.

Employment in the broadcasting segment (radio, TV and cable), however, was down. It fell from 18,300 employees in 2009 to 17,917 in 2010. The report notes movie theater attendance also was off in 2010 by about 5 percent.

Piracy continues to grow as a threat, says the report, and advances in technology are making it easier. There also is a continuing decline in revenue from the sales of DVDs, which has not been offset by the increase in VOD and electronic download sales.

Last summer, the number of pay TV customers declined for the first time. The report suggests more people are dropping cable and turning to such services as Netflix or Redbox for cheap rentals.

However, the bigger picture is bright. “A year ago, we were still worrying about whether we would have another collapse in the financial markets,” Sidhu said.

She said there also are indications that money is available once again from outside funding sources to make movies. “People who have money are beginning to look at what they are going to do with it,” she added, “because they too have come to the conclusion the recession is over and it’s probably safe to go out again.”

Sidhu has been with the LAEDC for 11 years, but this in her first year as chief economist. She replaced Jack Kyser, who died in December.