The Runaway Production Complex? The Film Industry as a Driver of Urban Economic Revitalization in the United States

Abstract

Cities and states across the United States have turned to cultural industries to revitalize their economies, but we argue that the dynamics of agglomeration and labor market governance are crucial to the prospects for local economic growth from these sectors. This paper analyzes recent changes in the American film industry, traditionally a “high road” model of flexible production and employment. We examine the rapid rise of state tax incentives and spatial dispersal of production within the United States, the destabilization of traditional industrial complexes in California and New York, and the development of new centers in states like Louisiana and New Mexico. Our findings suggest that the spatial fragmentation of the industry is undermining established forms of regulation, introducing a new volatility in the labor market, and challenging the ability of localities to benefit from growth in the industry.

Get full access to this article

View all access options for this article.

References

Applebaum

Lauren

, Tilly

Chris

, and Huang

Juliet

. 2012. Report: “Economic and Production Impacts of the 2009 California Film and Television Tax Credit.” UCLA Institute for Research on Labor and Employment. (http://www.irle.ucla.edu/publications/documents/TaxCreditIndustryReportIRLE.pdf). [July 1, 2014].

Associated Press. 2009. “States Give H'Wood a Fortune in Tax Breaks.” Hollywood Reporter, June 6. (http://www.hollywoodreporter.com/news/states–give–hwood–fortune–tax–84862). [July 1, 2014].

Baker

C. Edwin

. 2007. Media Concentration and Democracy: Why Ownership Matters. Cambridge: Cambridge University Press.

Becker

Howard S.

2008. Art Worlds. Berkeley: University of California Press.

Bennett

Andrew

, and Elman

Colin

. 2006. “Qualitative Research: Recent Developments in Case Study Methods.” Annual Review of Political Science, 9:455–76.

Blair

Helen

. 2001. “‘You're Only As Good As Your Last Job’: The Labor Process and Labor Market in the British Film Industry.” Work, Employment and Society, 15(1):149–69.

Block

Alex Ben

. 2014. “New York Surpasses L.A. in Drama Pilot Production for the First Time.” Hollywood Reporter, June 24. (http://www.hollywoodreporter.com/news/new–york–surpasses–la–drama–714311–001?utm_expid=19303748–47.Dc5T5×7NQXuLhIiirdvOtQ.1). [July 1, 2014].

Box Office Mojo. 2015. “Studio Market Share, 2014.” (http://www.boxofficemojo.com/studio/?view=majorstudio&view2=yearly&yr=2014&p=.htm). [May 5, 2015].

Caves

Richard

. 2000. Creative Industries: Contracts between Art and Commerce. Cambridge, MA: Harvard University Press.

10.

Christopherson

Susan

. 2005. “Divide and Conquer: Regional Competition in a Concentrated Media Industry.” In Elmer

Greg

and Gasher

Mike

(eds.), Contracting Out Hollywood: Runaway Productions and Foreign Location Shooting, pp. 21–40. Lanham, MD: Rowman and Littlefield.

11.

Christopherson

Susan

. 2009. “Working in the Creative Economy: Risk, Adaptation, and the Persistence of Exclusionary Networks.” In McKinlay

Alan

and Smith

Chris

(eds.), Creative Labour: Working in the Creative Industries, pp. 72–91. New York: Palgrave Macmillan.

12.

Christopherson

Susan

, and Clark

Jennifer

. 2007. Remaking Regional Economies: Power. Labor, and Firm Strategies in the Knowledge Economy. New York: Routledge.

13.

Christopherson

Susan

, and Rightor

Neil

. 2010. “The Creative Economy as ‘Big Business’: Evaluating State Strategies to Lure Filmmakers.” Journal of Planning Education and Research, 29(3):336–52.

14.

Cohen

Rachel A

. 2015. “The Wrong Way to Revitalize a City,” In These Times, February 19. (http://inthesetimes.com/article/17644/the–wrong–way–to–revitalize–a–city)

15.

Couch

Aaron

. 2013. “New Mexico Governor Signs ‘Breaking Bad’ TV, Film Subsidy Bill into Law.” Hollywood Reporter, April 4. (http://www.hollywoodreporter.com/news/new–mexico–governor–signs–breaking–433168). [June 30, 2014].

16.

Egan

Jack

. 2009. “New Mexico Set Apart by Cheap Loans.” Daily Variety, June 24. (http://www.variety.com/article/VR1118005362.html?categoryid=3178&cs=1&query=new+mexico+incentive+program). [July 1, 2014].

17.

Egan

Jack

. 2010. “Big Breaks by the Bayou.” Daily Variety, October 28. (http://www.variety.com/article/VR1118026267). [July 1, 2014].

18.

Eichler

Alexander

. 2011. “With Film Incentive Capped, Michigan's Movie Jobs Face an Uncertain Future.” Huffington Post, November 16. (http://www.huffingtonpost.com/2011/11/17/michigan–film–incentive–jobs_n_1098247.html). [July 1, 2014].

19.

Elmer

Greg

, and Gasher

Mike

, eds. 2005. Contracting Out Hollywood: Runaway Productions and Foreign Location Shooting. Lanham, MD: Rowman and Littlefield.

20.

Ernst & Young . 2009. Report: “Economic and Fiscal Impacts of the New Mexico Film Production Tax Credit.” Prepared for the New Mexico State Film Office and State Investment Council, January. (http://www.iatselocal480.com/Documents/ernst_&_young_study.pdf). [July 1, 2014].

21.

Film

L.A.

2014. Report: “2013 Feature Film Production Report.” Los Angeles: Film L.A. Research. (http://www.filmla.com/data_reports.php). [June 28, 2014].

22.

Florida

Richard

. 2012. Rise of the Creative Class, Revisited. New York: Basic Books.

23.

Foster

Pacey C

. 2013. “Mobile Project Networks: Regional Dynamics in the U.S. Film and Television Industry.” Work and Occupations, 40(4): 398–430.

24.

Glaeser

Edward L.

, and Gottlieb

Joshua D.

. 2009. “The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States,” NBER Working Paper 14806, Cambridge, MA: National Bureau of Economic Research, (http://www.nber.org/papers/w14806). [March 19, 2015].

25.

Goldsmith

Ben

, and O'Regan

Tom

. 2005. “The Policy Environment of the Contemporary Film Studio.” In Elmer

Greg

and Gasher

Mike

(eds.), Contracting Out Hollywood: Runaway Productions and Foreign Location Shooting, pp. 41–66. Lanham, MD: Rowman and Littlefield.

26.

Gray

Lois

, and Seeber

Ronald

. 1996. “The Industry and the Unions: An Overview.” In Gray

Lois

and Seeber

Ronald L.

(eds.), Under the Stars: Essays on Labor Relations in Arts and Entertainment, pp. 15–49. Ithaca, NY: Cornell University Press.

27.

Gray

Lois

, Figueroa

Maria

, Lanier

Catherine

, and Cerio

Daniel

. 2009. Cultural Capital: Challenges to New York State's Competitive Advantages in the Arts and Entertainment Industry. Ithaca, NY: Cornell University, ILR School.

28.

Greer

Ian

, Byrd

Barbara

, and Fleron

Lou Jean

. 2007. “Two Paths to the High Road: The Dynamics of Coalition–Building in Seattle and Buffalo.” In Turner

Lowell

and Cornfield

Daniel B.

(eds.), Labor in the New Urban Battlefields: Local Solidarity in a Global Economy, pp. 111–28. Ithaca, NY: Cornell University Press.

29.

Gross

Julian

, LeRoy

Greg

, and Janis–Aparicio

Madeline

. 2005. Community Benefits Agreements: Making Development Projects Accountable. Los Angeles: Good Jobs First and the California Partnership for Working Families. (http://www.goodjobsfirst.org/publications/community–benefits–agreements–making–development–projects–accountable). [May 7, 2015].

30.

Gumbel

Andrew

. 2009. “Hollywood Feels the Pinch: Film Production at Standstill.” The Guardian (U.K.), April 26. (http://www.guardian.co.uk/film/2009/apr/27/hollywood–film–industry). [July 1, 2014].

31.

Hannigan

John

. 1998. Fantasy City: Pleasure and Profit in the Postmodern Metropolis. New York: Routledge.

32.

Harvey

David

. 2001. “A View from Federal Hill.” In David Harvey (ed.), Spaces of Capital: Toward a Critical Geography, pp. 128–57. New York: Routledge.

33.

Henchman

Joseph

. 2011. “More States Abandon Film Tax Incentives as Programs’ Ineffectiveness Becomes More Apparent.” The Tax Foundation, June 2. Washington, DC: The Tax Foundation. (http://taxfoundation.org/article/more–states–abandon–film–tax–incentives–programs–ineffectiveness–becomes–more–apparent). [July 1, 2014].

34.

Huffstutter

P.J.

, and Verrier

Richard

. 2009. “In Strapped States, Film Subsidies Lose Glamour.” Los Angeles Times, September 22. (http://articles.latimes.com/2009/sep/22/business/fi–ct–moviestates22). [July 1, 2014].

35.

Jennings

Timothy

, and Nott

Robert

. 2012. “New Mexico Works to Get Back on Hollywood's A–List.” The New Mexican, July 8. (http://newsnewmexico.blogspot.com/2012/07/new–mexico–works–to–get–back–on.html). [July 1, 2014].

36.

Judd

Dennis R

. 1999. “Constructing the Tourist Bubble,” In Judd

and Fainstein

(eds.), The Tourist City, pp. 35–53. New Haven: Yale University Press.

37.

Kalleberg

Arne L

. 2011. Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s to 2000s. New York: Russell Sage Foundation.

38.

Kelley

Seth

. 2015. “‘Midnight Rider’ Accident Victim Sarah Jones to be Subject of Feature Documentary.” Daily Variety, May 6. (http://variety.com/2015/film/news/midnight–rider–sarah–jones–documentary–1201488965/). [May 12, 2015].

39.

Klowden

Kevin

, Hamilton

Priscilla

, and Keough

Kristen

. 2014. Report: “A Hollywood Exit: What California Must Do to Remain Competitive in Entertainment—and Keep Jobs.” February. Los Angeles: The Milken Institute. (http://assets1b.milkeninstitute.org/assets/Publication/ResearchReport/PDF/A–Hollywood–Exit.pdf). [April 3, 2015].

40.

Krätke

Stefan

. 2012. “The New Urban Growth Ideology of ‘Creative Cities’.” In Brenner

Neil

, Marcuse

Peter

, and Mayer

Margit

(eds.), Cities for People, Not for Profit: Critical Theory and the Right to the City, pp. 138–49. New York: Routledge.

41.

Lang

Brent

. 2011. “Hollywood and the Job Crisis: Just How Bad Is It?” The Wrap, October 19. (http://www.thewrap.com/movies/article/hollywoods–recession–how–industry–coping–downturn–31872/?page=0,0). [July 1, 2014]

42.

Lauder

Thomas Suh

. 2012. “Television Production in L.A. Drops 15.6%; Overall Location Shoots Flat.” Los Angeles Times, July 3. (http://www.latimes.com/entertainment/envelope/cotown/la–et–ct–onlocation–quarter–20120703,05062246.story). [July 1, 2014].

43.

Los Angeles County Economic Development Corporation(LAEDC). 2012. Report: “The Entertainment Industry and the Los Angeles County Economy.” Los Angeles: Los Angeles County Economic Development Corporation, The Kyser Center for Economic Research. (http://laedc.org/reports/EntertainmentinLA.pdf). [July 1, 2014].

44.

Louisiana Office of Entertainment Industry Development. 2010. “Building a Permanent Entertainment Economy.” Louisiana Economic Development, April. (http://www.mcconnellconsultants.com/docs/Building%20a%20Permanent%20Entertainment%20Economy%20Report.pdf). [July 1, 2014].

45.

Louisiana Office of Entertainment Industry Development. 2014. “Production Essentials: Crew Base.” Louisiana Economic Development. (http://louisianaentertainment.gov/index.php/film/resources/incentive–applications–and–important–information). [July 1, 2014].

46.

Luce

Stephanie

. 2014. “Living Wages, Minimum Wages, and Low–Wage Workers,” In Luce

Stephanie

, Luff

Jennifer

, McCartin

Joseph

, and Milkman

Ruth

(eds.), What Works for Workers? Public Policies and Innovative Strategies for Low–Wage Workers, pp. 215–44. New York: Russell Sage Foundation.

47.

Luther

Will

. 2010. “Special Report: Movie Production Incentives and Film Tax Credits: Blockbuster Support for Lackluster Policy,” January 14. Washington, DC: The Tax Foundation. (http://www.taxfoundation.org/publications/show/25706.html). [July 1, 2014].

48.

Mahoney

James

. 2003.“Strategies of Causal Assessment in Comparative Historical Analysis,” In Mahoney

James

and Rueschemeyer

Dietrich

, (eds.), Comparative Historical Analysis in the Social Sciences, pp. 337–72. Cambridge: Cambridge University Press.

49.

Markusen

Ann R

. 1985. Profit Cycles, Oligopoly, and Regional Development. Cambridge, MA: MIT Press.

50.

McDonald

Adrian

. 2011. “Down the Rabbit Hole: The Madness of State Film Incentives as a ‘Solution’ to Runaway Production.” University of Pennsylvania Journal of Business Law, 14(1):85–165.

51.

McKinlay

Alan

, and Smith

Chris

, eds. 2009. Creative Labour: Working in the Creative Industries. New York: Palgrave Macmillan.

52.

McNary

Dave

. 2014. “‘Midnight Rider’ Accident Still Evoking Safety Concerns.” Daily Variety, June 7. (http://variety.com/2014/film/news/midnight–rider–accident–still–evoking–safety–concerns–1201215735/). [May 1, 2015].

53.

Meardon

Stephen J.

2001. “Modeling Agglomeration and Dispersion in City and Country: Gunnar Myrdal, Francoise Perroux, and the New Economic Geography.” American Journal of Economic and Sociology, 60(1):25–57.

54.

Moore

Schuyler

. 2007. The Biz: The Basic Business, Legal, and Financial Aspects for the Film Industry, 3rd ed. Beverly Hills, CA: Silman–James Press.

55.

Moss

Jordan

. 2013. “Bronx Armory Saga: Will it Echo Nationwide?” City Limits, August 2. (http://citylimits.org/2013/08/02/bronx–armory–saga–will–it–echo–nationwide/) [May 7, 2015].

56.

Myrdal

Gunnar

. 1957. Economic Theory and Underdeveloped Regions. London: Gerald Duckworth.

57.

Neff

Gina

. 2012. Venture Labor: Work and the Burden of Risk in Innovative Industries. Cambridge, MA: MIT Press.

58.

New Mexico Film Office. 2012. “Film Crew Advancement Program.” New Mexico Film Office Website. (http://www.nmfilm.com/FCAP.aspx). [July 1, 2014].

59.

Parks

Virginia

, and Warren

Dorian

. 2009. “The Politics and Practice of Economic Justice: Community Benefits Agreements as Tactic of the New Accountable Development Movement.” Journal of Community Practice, 17:88–106.

60.

Paul

Alan

, and Kleingarter

Archie

. 1994. “Flexible Production and the Transformation of Industrial Relations in the Motion Picture and Television Industry.” Industrial and Labor Relations Review, 4(47):663–78.

61.

Peck

Jamie

. 2005. “Struggling with the Creative Class.” International Journal of Urban and Regional Research, 4(29):740–70.

62.

Pollon

Zelie

. 2011. “New Mexico Caps Tax Incentives for Film Makers.” Reuters, March 21. (http://www.reuters.com/article/2011/03/21/us–newmexico–film–idUSTRE72K62P20110321). [July 1, 2014].

63.

Randle

Keith

. 2011. “The Organization of Film and Television Production.” In Deuze

Mark

, ed., Managing Media Work, pp. 145–53. Thousand Oaks, CA: Sage.

64.

Riegel

Stephanie

. 2009. “Costly Credits.” Greater Baton Rouge Business Report, June 15. (http://www.businessreport.com/article/20090615/BUSINESSREPORT0109/306159970). [July 1, 2014].

65.

Rueschemeyer

Dietrich

. 2003. “Can One or a Few Cases Yield Theoretical Gains?” In Mahoney

James

and Rueschemeyer

Dietrich

(eds.), Comparative Historical Analysis in the Social Sciences, pp. 305–36. Cambridge: Cambridge University Press.

66.

Sassen

Saskia

. 2012. Cities in a World Economy, 4th ed. Thousand Oaks, CA: Pine Forge Press.

67.

Scott

Allen J

. 2004. “Cultural–Products Industries and Urban Economic Development: Prospects for Growth and Market Contestation in Global Context.” Urban Affairs Review, 4(39):461–90.

68.

Scott

Allen J

. 2005. On Hollywood: The Place, the Industry. Princeton, NJ: Princeton University Press.

69.

Scott

Allen J

. 2006. “Creative Cities: Conceptual Issues and Policy Questions.” Journal of Urban Affairs, 1(28):1–17.

70.

Scott

Loren C.

& Associates . 2013. Report: “The Economic Impact of Louisiana's Entertainment Tax Credit Programs: Report Prepared for the Louisiana Office of Entertainment Industry Development Louisiana Department of Economic Development.” (http://www.louisianaentertainment.gov/assets/ENT/docs/2013_OEID_Program_Impact_Report%20_FINAL.pdf) [July 21, 2015].

71.

Small

Mario Luis

. 2009. “‘How Many Cases Do I Need?’ On Science and the Logic of Case Selection in Field–Based Research.” Ethnography, 10(1):5–38.

72.

Soutar

Paul

. 2011. “Kansas Reloads Film Production Tax Credit after Two–Year Suspension,” Kansas Watchdog, June 22. (watchdog.org/36942/ks–kansas–reloads–film–production–tax–credit–after–two–year–suspension/). [July 1, 2014].

73.

Storper

Michael

. 1994. “The Transition to Flexible Specialization in the U.S. Film Industry: External Economies, the Division of Labour and the Crossing of Industrial Divides.” In Ash

Amin

(ed.), Post Fordism: A Reader, pp. 195–226. Oxford: Blackwell.

74.

Tannenwald

Robert

. 2010. “State Film Subsidies: Not Much Bang for Too Many Bucks.” Center on Budget and Policy Priorities. Washington, DC: Center on Budget and Policy Priorities. (http://www.cbpp.org/cms/?fa=view&id=3326). [July 1, 2014].

75.

The Teamster. 2009. “Empire State Standoff.” Motion Picture News, March, p. 3.

76.

Tilly

Charles

. 1998. Durable Inequality. Berkeley: University of California Press.

77.

U.S. Fed. News Service. 2009. “Governor Bill Richardson Announces Additional Orientation for Retrain and Sustain.” Highbeam Research. May 16. (www.highbeam.com/doc/1P3-1712946191.html). [July 1, 2014].

78.

Vernon

Raymond

. 1966. “International Investment and International Trade in the Product Cycle.” Quarterly Journal of Economics, 81, 190–207.

79.

Verrier

Richard

. 2009. “As the Hollywood Machine Abandons LA, Its Supporting Workers Struggle.” Los Angeles Times, July 12. (http://articles.latimes.com/2009/jul/12/business/fi–ct–runaway12). [July 1, 2014].

80.

Verrier

Richard

. 2011. “New Mexico Governor Calls for a Big Cut in Film Tax Rebate Program.” Los Angeles Times, January 10. (http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/01/new–mexico–gov–calls–for–big–cut–in–film–tax–rebate–program.html). [July 1, 2014].

81.

Verrier

Richard

. 2012. “New York Triples Its Post–Production Tax Credit.” Los Angeles Times, July 27. (http://articles.latimes.com/2012/jul/27/entertainment/la–et–ct–newyork–filmcredit–20120727). [July 1, 2014].

82.

Verrier

Richard

. 2013. “‘Breaking Bad’ Bill would Boost New Mexico Film Incentive.” Los Angeles Times, February 27. (http://articles.latimes.com/2013/feb/27/business/la–fi–ct–onlocation–20130227). [July 1, 2014].

83.

Vogel

Harold L

. 2007. Entertainment Industry Economics: A Guide for Financial Analysis, 7th ed. Cambridge: Cambridge University Press.

84.

Weber

Scott

. 2010. “Runaway Production Keeps Running.” KNBC4 Los Angeles, January 15. (www.nbclosangeles.com/news/local/Runaway–Production–Keeps–Running–From–LA–81732577.html). [July 1, 2014].

85.

Weil

David

. 2014. The Fissured Workplace: Why Work Became So Bad for So Many and What Can be Done to Improve it. Cambridge, MA: Harvard University Press.

86.

Winseck

Dwayne

. 2011. “The Political Economies of Media and the Transformation of the Global Media Industries.” In Winseck

Dwayne

and Jin

Dal Yong

(eds.), The Political Economies of Media: The Transformation of the Global Media Industries, pp. 3–48. London: Bloomsbury Academic.

87.

Zukin

Sharon

. 1995. The Cultures of Cities. Oxford: Blackwell.