Next time you watch a movie, pay attention to the credits. Films are rarely produced in one location and have shifted to project-by-project formats with increasing work undertaken by freelancers, subcontractors, and independent studios. Production technology is also changing from traditional film to digital media. Locations recognise the benefits of attracting this new business, particularly since cost and talent are major considerations for the industry. Some 40 US states now offer tax incentives and subsidies. Programmes in Louisiana have seen the state become the third most popular in the US for filming, closely following New York, with California the most popular.

New facilities

In 2006, the $45m Celtic Media Centre opened in Baton Rouge as Louisiana’s first and only full-service studio/sound stage complex. It is managed by Raleigh Studios, the largest US independent studio with operations in and around Hollywood, Los Angeles and Budapest, Hungary. “Louisiana’s tax incentives are a huge pre-requisite for movie producers – as they are in Canada,” says Kevin Murphy, Raleigh’s director of studio operations for Celtic.

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Celtic offers three stages and post production space. When built out, it will provide six sound stages; professional post-production editorial and sound facilities; motion capture and a green screen for special effects and video games; professional grip and lighting services; production offices, mill shops, props, wardrobe, security and other key services and facilities.

“Producers want the same level of production space and services that they find in California,” says Mr Murphy. Films produced in the state receive Louisiana’s 25% motion picture production tax credit, and Raleigh Studios also qualifies for a 40% infrastructure tax credit. Additional incentives are available on sound recording production and infrastructure and digital/interactive media.

Added to this, production costs are about 20% less in Louisiana than California, while real estate, utilities and ancillary services such as housing, meals and equipment rental are also cheaper. With film companies spending upwards of 50% of a film’s total budget in the vicinity where they shoot, communities benefit economically, even if only in the short term.

And the effects can also be longer lasting. “Creative industries have played a big role in the recovery of New Orleans [after Hurricane Katrina],” says Roger Benischek, director of Nims Center Studios, a production house and University of New Orleans teaching facility.

It is a $30m, 100,000 sq ft centre incorporating a high-definition digital video production studio – the first in the south and one of the first in the nation. “The centre is unique. It offers production incentives and training packages,” says Mr Benischek. Films such as Ray and All the Kings Men have been produced here. Ray, a film about music legend Ray Charles was the first film to receive Louisiana’s 25% tax credit.

Mixed-use Hollywood

Elsewhere in the US, real estate developers are jumping on the bandwagon to capture opportunities and create mixed-use communities, anchored by Hollywood-type tenants.

In Austin, Texas, the 681-acre Villa Muse is planned as a $1.5bn mixed-use community, centered around the 200-acre Villa Muse Studios. The complex will include a 70,000-seat outdoor amphitheatre. Its residential component will double as a ‘backlot’ for movie productions. Phase I is targeted for a late-2008 completion.

In Albuquerque, New Mexico, the Mesa Del Sol community stretches over 12,900 acres. Albuquerque Studios, a new eight-stage facility owned by Pacifica Ventures, has located there. New Mexico’s aggressive incentive package and Albuquerque’s location – 1.5 hours from Los Angeles – were plus points for the studio.

Hollywood offshore

 

New York and California feel the squeeze to retain their traditional stronghold in film, television and commercial production, although both are getting involved in new development as well. Last year, Steiner Studios announced the doubling of its existing 310,000 sq ft, five-stage film and television production facility at Brooklyn’s Navy Yard. Since opening in 2004, the studio has added some $400m of feature film production to New York’s annual $5bn.

In California, the Letterman Digital Arts Center offers a 23-acre, 860,000 sq ft production campus in San Francisco’s historic Presidio National Park. It is devoted to the production of digital cinema and video games and the creative exploration and innovation of new digital tools. In Los Angeles, National Broadcasting Company (NBC) Universal is creating a West Coast News Headquarters and Content Center, MetroStudio@Lankershim, a start-of-the-art digital television, production and transit centre.

But even offshore locations are threatening the industry. A study by the Center for Entertainment Industry Data and Research (CEIDR) indicates that film production continues to shift offshore as countries worldwide introduce incentives – especially for bigger budget productions. “The US economy has lost some 47,000 jobs a year and an estimated $23bn in economic benefits related to the production of theatrical-length films alone since 2000,” says Stephen Katz, CEIDR co-founder.

Attractive exchange rates and aggressive incentives that pay part of the labour costs have established Canada as a major contender. Vancouver and Toronto are the main destinations of relocated Hollywood shootings. From 1998 to 2005, feature film production in Canada grew 179% from $430m to $1.2bn. For the same period, production in the UK and Ireland increased 66% from $486m to $809m; Australia and New Zealand, 531% from $113m to $717m; and eastern Europe 927% from $30m to $308m.

“It appears that if the US hopes to retain a competitive edge in the global market for production, it will be necessary for the government to consider the enactment of an enhanced US federally based incentive programme and to do likewise for state governments, particularly California,” says Mr Katz.

 

IN FOCUS:

LOUISIANA'S FILM AND MUSIC SCENE

  • In December 2007, the National Academy for Recording Arts and Sciences was entered into the Cajun/Zydeco music category, a new Grammy Award – and six Louisiana groups were up for nomination
  • Those in New Orleans were fearful after Hurricane Katrina, with recording studios destroyed and musicians scattered elsewhere. But the Music Shed Recording Studios is proving its worth in the region
  • The big names who now use Music Shed Recording Studios and the Louisiana 25% tax credit for sound production and recording studio infrastructure are helping hugely
  • "We are taking advantage of the tax credit,” says Frank Alquist, an owner of The Music Shed. “The banking community struggles with underwriting projects of this nature because of specialised construction. But the tax credit helps as it puts us 25% closer to breaking even.”