Study: U.S. Is Losing $1 Bil. In Commercial Production

More than $1 billion in annual domestic commercial-production spending—and the associated jobs—has fled to foreign shores, according to a membership survey that will be released later this month by the Association of Independent Commercial Producers.

The study, conducted from July 2002-June 2003, showed that close to one-quarter of commercial jobs that could have been done in the U.S. went abroad instead, said Matt Miller, the New York-based president and CEO of AICP. “When I started as president 10 years ago, I’d guess it was only 10 percent,” said Miller, who estimates total annual spending for the domestic commercial-production business at $5 billion.

Some in the production community blame the drop in domestic production in large part on the Screen Actors Guild commercial strike in 2000, which forced producers to discover new places to shoot. “It never came back after the strike,” said George Spiro Dibie, national president of the International Cinematographers Guild in Los Angeles.

Damon Webster, director of advertising production at Publicis Groupe’s Saatchi & Saatchi in Torrance, Calif., said the strike “did send people looking for other solutions, and clients became more comfortable shooting abroad.” (Webster shot Toyota Prius’ most recent work in a half-dozen cities abroad, although the Toyota shop shoots locally 90 percent of the time.)

Industry veterans agree, however, that commercial production was already in a steady decline when SAG set up its picket lines, with ad budgets dropping, the dollar strong for long periods and countries such as South Africa, Canada and Australia developing the infrastructure and talent pool to compete with Hollywood. “It’s been a long time coming,” said cinematographer John Hora, who has shot ads since1962. In the past decade, he says, “virtually all of the commercial work I could get was in Canada.”

Jake Scott, a director at RSA USA in L.A., said he sees budgets as a major factor. “The agency wants it to be good, but the production companies have been having to ‘buy’ jobs,” he said. “It’s not a business anymore—it’s becoming a charity.”

Still, Russell Hollander, eastern executive director of the Directors Guild of America in New York, said it’s “never too late” for a rebound, noting a particularly robust January. “The agencies are still here, the directors and cinematographers still live here, and everyone would prefer to work at home,” he said. “The problem is leveling the playing field and dealing with the incentives to shooting outside the United States.”

The state of Illinois, for one, is doing just that in reaction to a drastic dropoff in production in Chicago, the third-largest commercial production market in the U.S. (spending fell from $125 million in 1999 to $25 million last year, according to the Illinois Film Office). The Illinois Production Alliance—a coalition of business, labor and government—lobbied the state legislature last fall, and a law went into effect Jan. 1 that allows for tax credits of up to 25 percent for shoots that pay $50,000 or more to Illinois-based crews. The Illinois Film Office said filming application inquiries are suddenly up 300 percent.