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Economic and Fiscal Impacts of Texas’ Moving Media Industry

How Texas Compares with Other States in the Moving Media Industry

Feature Films and Television Shows

In 2006, the Motion Picture Association of America (MPAA) prepared an economic impact study for film production in the United States.9 This study examined 699 motion picture and television shows produced across 50 states during 2005, the top states being California, New York and Nevada. In 2005, the state of Texas produced 16 feature films, the same amount produced by Utah.

Table 1

Motion Pictures and Television Shows Produced in 2005
State Number of Shows
California 365
New York 281
Nevada 237
Arizona 97
North Carolina 64
Montana 36
New Jersey 24
Louisiana 23
New Mexico 22
Illinois 21

Source: MPAA, 2006

The International Alliance of Theatrical Stage Employees (IATSE), whose membership includes motion picture technicians, states, “IATSE film, television and commercial workers in Texas earned in excess of $15 million per year in 2004 and 2005.10 In 2006, the first real downturn showed when the IATSE-eligible wage dropped to $13 million. The Writers’ Guild of America Strike in 2007 sharpened the downturn, dropping total wages earned to $12 million. Projections for 2008 are just under $11 million, based on numbers available through June 30, 2008. Production-based wages fell about 30 percent during the last three years.11

Texas-based talent agents have seen a downturn in the production industry. One agency representative stated, “We’ve already lost some of our support staff with crew relocating to other states, and now, talent are talking about either getting out of the business or moving to find opportunities for better-paying jobs.” Another agency says they are sending more talent than ever for auditions in surrounding states. “Of the 115 film and TV actors I represent in Texas, over 75 have traveled to Louisiana or New Mexico for work opportunities. They bolster the economies of other states while living away from their families to work in their chosen field.  We need to bring the work back to Texas.”

The motion picture and television industry in California generated $42.2 billion of economic activity in 2006, according to the MPAA (see Table 2). About 266,000 people were directly employed in this industry with an average salary of $80,600, and another 500,000 workers were indirectly employed.

Table 2

The Economic Benefit of Motion Pictures and Television Shows, 2006
State Economic Impact Rank
California $42.2 billion 1
New York $1.5 billion 2
New Mexico $780 million 3
Louisiana $400 million 4
North Carolina $300 million 5
Arizona $107 million 6
Nevada $102.5 million 7
Illinois $100 million 8
New Jersey $83 million 9
Montana $81.4 million 10

Source: Estimated economic benefit taken from the 2006 MPAA Economic Impact report, based on film commission estimates.

In 2006, New York City hosted the highest number of film, television, commercial and music video shoots ever. The entire state realized about $1.5 billion of economic benefits from film and television production, according to the MPAA. About 90 percent of the 250 feature films were independent productions. With a newly enacted 30 percent production tax credit at the state level, combined with an existing 5 percent credit for New York City-based production, New York State’s share of the moving media industry is likely to increase substantially in the years ahead.

Nevada benefits from both television and film productions set in locations ranging from the casino locale of Las Vegas to the remote ghost town of Rhylolite. In 2005, the state’s economy thrived as the motion picture and television show industry contributed 3,210 workdays to the economy.

Although the MPAA did not profile Texas and the economic impact by the motion picture and television show industry, the Texas Film Commission estimates spending for film and television at $87 million for 2007 (see discussion below). What’s more, at the 2007 Golden Globes, four films set or shot in the state of Texas – “No Country for Old Men,” “There Will be Blood,” “Charlie Wilson’s War” and “The Great Debaters” – received awards. However, “The Great Debaters” was filmed largely in Louisiana, while “No Country for Old Men” was filmed primarily in New Mexico. Both states have been extremely aggressive in luring Hollywood productions.

The Louisiana film incentives program, enacted in 2002, has created a significant level of activity in the state. According to the Texas Film Commission, both Louisiana and New Mexico have realized a compound annual employment growth of 23 percent per year in moving media production. A recent study by Economics Research Associates claims Louisiana now has the third highest film concentration in the United States behind California and New York.12

In Texas, the outlook for television production is mixed. “Prison Break,” a popular television series on the Fox Network, relocated from Texas to Los Angeles with the upcoming season. The show has filmed 35 episodes in North Texas bringing almost $50 million dollars to the area. The average episode costs about $1.4 million dollars and employs around 600 people. On the plus side, “Friday Night Lights,” currently filmed in Austin, has decided to remain in Texas after considering other locations.

Table 3 presents employment and payroll data from the 2002 Economic Census, the latest available. Without question, when the 2007 Census is released, the numbers and state rankings will likely be quite different, with Nevada, New Mexico and Louisiana appearing among the leaders.

Table 3

Motion Picture Production Employment, 2002
Area Employment Payrolls
United States 151,696 $9.5 billion
California 90,023 $6.4 billion
New York 17,200 $1.1 billion
Texas 3,278 $143.2 million
Louisiana 324* $9.2 million*
New Mexico 100* $3.2 million*

Sources: U.S. Dept. of Commerce, U.S. Census Bureau, 2002 Economic Census – NAICS codes: 51211, 51212, 51219, 51224, 51229. *New Mexico and Louisiana did not report in all categories.

In all likelihood, a fair amount of film and TV production goes unreported by both the U.S. Census Bureau and the Texas Film Commission. According to the Texas Motion Picture Alliance, one vendor reports supporting 1.5 Texas movies per month that go unreported to the state film commission because the projects don’t meet the threshold requirements for an incentive grant. Numerous film labs, post-production facilities, equipment suppliers, audio facilities and studios may have a hand in re-shoots, pick-up shots, voiceovers and coloring, but don’t meet the threshold for the incentive program. These labs and post-production facilities often provide processing services for films and TV shows shot in Louisiana and New Mexico. While their activities may not be picked up by the Texas Film Commission, they nonetheless constitute an important part of the moving media industry’s infrastructure in the state.

Commercials

Production cost per commercial varies widely from a tabletop photograph to expensive filmed sequences incorporating models and actors while using film caliber crews and soundstages.

As mentioned above, for members of the Association of Independent Commercial Producers, major production locales for commercial shoots in 2006 were New York, Florida and California with Southern California accounting for 55 percent of the domestic shooting days and New York City for 18 percent (see Table 4). However, AICP does not track commercial shoots by non-members. Many non-AICP producers of commercials are active in Texas and other states.13

The 2002 Economic Census supports the AICP survey findings with New York and California leading in this employment sector (see Table 5). Texas was in fifth place after Illinois and Minnesota.

Table 4

Mean Commercial Shoot Days in the United States by Location, 2006
Location Number of Days
Southern California 30
New York 12
Florida 4
Other Southeast 6
Southwest 6
Illinois 7
Louisiana 2
Other U.S. Locations 14

Source: The Association of Independent Commercial Producers (AICP), Fifth Annual Survey.

Table 5

Commercial Photography Employment Selected States, 2002
Location Employment Payrolls
U.S. 15,750 $512.5 million
New York 2,875 $130.4 million
California 2,061 $64.9 million
Illinois 1,109 $42.4 million
Minnesota 985 $30.3 million
Texas 729 $22.3 million
Louisiana 127 $3.1 million
New Mexico 74 $1.6 million

Source: U.S. Census Bureau, 2002 Economic Census – NAICS code: 541922.

Video Games

Table 6

Direct Employee Shares per State, Top Six States
State Employment Percent
California 9,245 39.2%
Washington 2,674 11.3%
Texas 2,172 9.2%
New York 1,501 6.4%
Massachusetts 1,012 4.3%
Illinois 896 3.8%
Subtotal 17,500 74.2%
TOTAL ALL STATES 3,596

Source: Video Games in the 21st Century, The Game Developer Salary Report 2004-2007.

According to the Entertainment Software Association (ESA), the job growth rate for the United States computer and video game industry exceeded 17 percent between 2003 and 2006.14 In a recent study, ESA finds that California is the largest employer of computer and video game personnel in the nation with almost 40 percent of the total industry jobs (see Table 6). The Game Developer Salary Report for 2006 closely matches the U.S. Census Bureau with the industry’s top six states being California, Washington, Texas, New York, Massachusetts and Illinois. These states collectively employ about 74 percent of entertainment software industry professionals.

The ESA study cited above found that California is the largest employer of video and computer game personnel in the United States with about 40 percent of all industry jobs. California video and computer game companies provided in excess of $1.8 million in direct and indirect compensation to state residents in 2006. In 2006 alone, the industry in California grew by 12.3 percent, nearly three times faster than the state’s overall growth rate, and added $1.7 billion to the state’s economy.

Washington ranked second nationally in video and computer game personnel in 2006 by directly employing 2,674. In fourth place, New York followed Texas with 1,501 direct employees.

According to the Texas Film Commission, about 90 video game development and publishing companies call Texas home. Most of these companies, like Electronic Arts, Sony Online Entertainment and Amaze Entertainment, are based in Austin and Dallas. As with films and commercials, no doubt there is a sizeable amount of production activity flying “under the radar.” Digital content can be created on home computers or in university laboratories. Small “mom and pop” or perhaps “kid” enterprises are likely engaged in producing video games and other moving digital content that may eventually be sold, refined and commercialized. Indeed this creative impulse is a fundamental part of the human resource base that will be required if Texas is to increase its presence in video games and other forms of digital moving media.15

Refer to Appendix A for maps showing the location in Texas of film and production companies, film and television productions on location, film and television production crews and video game companies.

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