Posted 27 January, 2008 in FilmUSA
Observer at Large
“2007 in Review: Incentives, Global Content, Portable Viewing”
By Kathleen Milnes
I’m a data junkie. I spend a lot of my time with facts – facts about dollars
spent, people employed, students educated, places impacted. So for my year
in review, I’m sticking to the facts about public policy, technology’s
impacts and workforce development in the entertainment industries (well.
with just a smidge of analysis).
I’ve identified four major trends in 2007: 1) the expanding and often
enhanced pool of production incentives; 2) the global nature of content
creation; 3) the explosion of new outlets for content; and 4) efforts to
retain, grow, or often steal an artistically and technologically savvy
workforce. I’m covering three in this column and write about workforce
issues in the next issue.
Incentives
Continuing an accelerating trend, new incentives were enacted or existing
ones were enhanced across the U.S. and the globe. There are only five states
that have no incentives – California being one of them. New production
incentives were passed in legislatures in Texas, Michigan, Wyoming and
Wisconsin, to name a few. Massachusetts, Pennsylvania, Mississippi and
Florida sweetened their offers to keep up. Washington State is a good
example of new programs to grow local production by providing direct grants
in addition to production tax incentives.
Why? Because they work! The granddaddy of this trend in the U.S. is the
state of Louisiana, which now ranks third in the number of films produced.
A recent study showed that employment in Louisiana’s film industry has grown
23 percent per year since 2001, the highest growth rate in the nation. The
Louisiana industry supported 5,437 jobs in 2003. By 2005, an additional
13,445 jobs were created. Wages have increased more than 31 percent each
year. In 2003, film spending added $7.4 million to the state economy in the
form of wages, profits, sales taxes, etc. In 2007, this rose to nearly $342
million.
In New Mexico, the financial impact of film production in the state has
risen from $44.4 million in 2003 to an estimated $479.7 million for 2007.
The number of days film employees work rose from 28,120 in 2003 to 173,376.
And the number of IATSE members of has risen from 70 a few years ago to
1,300. Sound stages have sprouted in Albuquerque and Sony Pictures
Imageworks has announced plans to expand there as well.
This scene is being played out across the world as the demand for content
grows and the competition between countries, regions and states becomes more
intense. And in all of these locations, the development of sound stages,
equipment rental facilities and postproduction houses grows in direct
response.
Global Content Creation
Since film was invented, countries around the world have created their own
films primarily for their own audiences. In many countries, filmmaking is
supported by public dollars because it is viewed as a cultural product.
Over the last year, partnerships between U.S. studios and production
companies have sprung up in China and India. A few examples: Warner China,
the first Chinese-American film company, established in 2004, is now
distributing original film content produced specifically for a Chinese
audience via mobile phones. Sony Pictures Entertainment has created or
invested in over 40 international networks in more than 130 countries
reaching more than 300 million viewers worldwide, including specialized
channels showing Japanese animation. In 2007, this initiative, called
ANIMAX, expanded into Central Europe and is now broadcast in Hungary,
Romania, the Czech Republic and Slovakia. ANIMAX Germany launched in June
2007.
New Outlets for Content
According to my latest count, there are at least 50 original series
broadcasting webisodes on the Internet. More than 85 percent of U.S.
households are connected to the Internet via broadband, according to
Nielsen, while more than 30 percent of web users view live streaming video
(such as webisodes or streaming episodes of television series) and 20
percent watch saved video files (i.e., content downloaded from iTunes or
other consumer sites). And these numbers will only increase as technology
continues to evolve.
In June 2007, Nielsen released a progress report on its efforts to capture
the audience for all of these platforms called A2/M2 for Anytime Anywhere
Media Measurement. While audience numbers for these new platforms are not
yet available, there is some interesting research to date. For example, 19
percent of households have at least one personal video device. The largest
penetration is for portable DVD players (10 percent of households) and video
enabled cell phones (5 percent of households). However, playing video on a
personal device has not yet become an ingrained habit. Even among PVD
owners, about two-thirds responded that it had been more than a week since
they watched something on their portable player. Only four percent of
households own a video-enabled iPod or MP3 player.
Workforce Development
In the next issue I’ll update you on trends in workforce development around
the globe. Governments, schools and industry are teaming up to expand the
pool of talent to feed our ever-growing media-centric world. Taking a page
from Nielsen, maybe we should call this A3 entertainment – anytime,
anywhere, on any device. But the issue for you, dear reader, is who makes
it, and where?
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