FLASHBACK – 2005 – PART VI – RUNAWAY STUDY / EVENTS

I. FLASHBACK TIME – 2005 – PART VI – RUNAWAY PRODUCTION STUDY
II. EVENTS

…Absolutely guaranteed anonymity – Former Musician’s Union officer
…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician
…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician
…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician

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I. FLASHBACK TIME – 2005 – PART VI – RUNAWAY PRODUCTION STUDY
[E: And this was 11 years ago,.. there are myriad more options now.]

U.S. RUNAWAY FILM AND TELEVISION PRODUCTION STUDY
REPORT

The Directors Guild of America (DGA) and Screen Actors Guild (SAG)
retained Monitor Company, a leading management consulting firm, to
conduct an investigation into the phenomenon of “runaway” film and
television production from the U.S. The Guilds (on an anecdotal basis)
had been noting an accelerating runaway phenomenon, and the need
to create an objective quantitative analysis led to the study being
commissioned. Partial funding for the study was provided by a grant
from SAG-Producers Industry Advancement & Cooperative Fund. The
study has two objectives – quantify the extent to which runaway
production has been occurring since 1990, and identify the major
causes.

U.S. runaway productions are those which are developed and are
intended for initial release/exhibition or television broadcast in the
U.S., but are actually filmed in another country. There are two major
types of runaway productions – “creative” runaways, which depart
because the story takes place in a setting that cannot be duplicated or
for other creative considerations, and “economic” runaways, which
depart to achieve lower production costs. The study’s focus was on
these “economic” runaways. Note that the study’s scope included
theatrical films, films for television, television mini-series, and thirty
and sixty minute television series. Other types of productions such as
commercials, and news and sports programming were not included.

What Is The U.S. Runaway Production Problem?

The study results show that economic runaway film and television
productions are a persistent, growing, and very significant issue for
the U.S. In 1998, of the 1,075 U.S.-developed film and television
productions in the study’s scope identified by Monitor Company, 285
(27% of total) were economic runaways, a 185% increase from 100
(14% of total) in 1990. When these productions moved abroad, a $10.3
billion economic loss (lost direct production spending plus the
“multiplied” effects of lost spending and tax revenues) resulted for the
U.S. in 1998 alone. This amount is five times the $2.0 billion runaway
loss in 1990.

Of these 285 economic runaways in 1998, 100 were theatrical
productions, and 185 were television (films for TV, TV series, and miniseries)
productions. The most prevalent type of economic runaway
television productions were movies for TV. A total of 308 movies for
TV were produced in 1998; 139 (or 45%) of these ran away for
economic reasons in 1998, up from only 30 productions in 1990. Out of
a total of 534 theatrical productions in 1998, 100 (19%) were economic
runaways, up from 44 in 1990. In terms of economic impact on the
U.S., economic runaway TV films have the largest ($2.7 billion) impact,
followed by feature films with budgets larger than $25 million ($2.4
billion impact), and with budgets smaller than $25 million ($2.3 billion
impact). It is noteworthy that feature films have such a significant
economic impact.

Conventional wisdom held that economic runaways are a television
movie phenomenon and that larger productions would tend to remain
in the U.S. since the infrastructure required to produce them wasn’t
available abroad. This data may indicate the leading edge of a trend
with larger-budget productions running away.

To Where Do These Productions Run Away?

Canada captures the vast majority of economic runaways, with 81% of
the total. Australia and the U.K. capture another 10%. In 1998, 232
productions ran away to Canada, up from 63 in 1990. TV movies have
had the highest propensity to runaway to Canada, with 91% of the 139
TV movie economic runaways landing there. The 127 U.S. economic
runaway TV movies filmed in Canada in 1998 is more than five times
the 23 in 1990. The study found that countries other than Canada,
Australia, and the U.K. have a small share of U.S. runaways, although
recent high-profile runaway productions in Mexico such as “Titanic”
highlight the need to monitor developments in selected other
countries on an ongoing basis.

These productions are leaving at a time when U.S. domestic
production has been growing, so the runaway phenomenon has gone
relatively unnoticed. Although the number of U.S.-developed feature
productions grew 8.2% annually since 1990, the number of U.S.-
developed features that ran away to Canada grew 17.4% annually.
Similarly, the number of U.S.-developed television programs produced

in the U.S. grew 2.6% annually since 1990, but the number of U.S.-
developed television productions that ran away to Canada grew 18.2%
annually during that time.

What Is The Impact of U.S. Economic Runaway Production?

The labor impact of these economic runaways is profound. In 1998
more than 20,000 full time equivalent jobs were lost; 11,000 were
positions usually filled by SAG members (such as supporting actors,
stunt and background performers) and 600 usually by DGA members
(directors, assistant directors, unit production managers, associate
directors and stage managers). The balance were jobs in other
production skills or trades, such as camera, sound, production design,
wardrobe, makeup, set construction and drivers.

When the effects of these employment and spending losses are
totaled, the impact on the U.S. of film and television economic
runaways in 1998 was $10.3 billion: $2.8 billion in lost direct
production spending, plus $5.6 billion in multiplier effects and $1.9
billion in lost tax revenues. The economic impact extends beyond the
entertainment industry, affecting local merchants and hotels. In 1998,
economic runaways represented almost 15% of the $74.3 billion total
impact of U.S.-developed film and television productions in the scope
of the study.

There have been notable regional impacts as well. Production
expenditures in core production centers such as LA and New York City
have been growing, but at slower rates than those of Canadian
production centers. Other U.S. production centers have experienced
declines in production expenditures since 1995 – North Carolina (-
36%), Illinois (-20%), Washington state (-37%) and Texas (-31%).
Forecasts of future U.S. runaway production show that under all basic
scenarios examined, without actions to stem economic runaways,
economic runaway production remains significant, potentially
increasing in impact to $13-$15 billion annually by 2001. A scenario
with slower U.S. growth and a stronger Canadian dollar keeps the U.S.
impact at approximately $10 billion annually. Many foreign production
infrastructure investments have been made by U.S. studios; these
investments will serve to continue attracting additional productions
abroad. Furthermore, the increased globalization of the entertainment

industry and incidence of international co-production arrangements
will also likely stimulate U.S. runaway production.

What Are the Causes?

Why have productions been leaving at an accelerated rate since 1990?

The location decision for a production balances factors such as
expected revenues with the cost of production (labor, services, etc.)
as well as with the quality of talent, directors, and production crews.
Historically, countries such as Canada and Australia had limited
production capabilities, making them fundamentally unattractive
despite potential savings. Recently, however, the quality of Canadian
and Australian crews has improved to a point where most productions
can be filmed in these countries without a major difference in
quality/productivity.

As foreign crews and infrastructure have improved through experience
and direct investment, their ability to handle larger, more complex
productions increases. For example, British Columbia and Ontario
combined have well over 1 million square feet of sound stage space,
as much as the space in New York and North Carolina combined.
Canadian film commissions have also been very aggressive in
promoting their locations to the U.S. entertainment industry.

In addition, the value of Canadian, Australian and U.K. currencies all
have declined by 15% to 23% since 1990 relative to the U.S. dollar,
reducing production costs abroad. Factor costs (wages/rates) in these
countries, which were generally lower than those in the U.S. in the
early 1990’s, have also increased at a slower pace than in the U.S. As
a result, producers realize at least a 15% reduction in production costs
from lower labor costs and costs of goods and services when filming in
Canada.

Very visibly (for example, by having Revenue Canada (the Canadian
IRS) representatives at the recent Locations ’99 trade show in Los
Angeles), foreign federal and regional governments have also been
offering rich tax incentives/rebates on production activity in their
jurisdictions. Canada offers federal and provincial tax credits of 22%
to 46% of labor expense (yielding up to a 10% reduction in overall
production expense), and Australia offers more than a 10% labor tax
credit in some cases. Note that these are not credits for national or
cultural content productions; they are available to any qualifying
production employing foreign nationals. In addition, Canada, Australia
and the U.K. offer up to a 100% tax credit for qualifying “national”/
“cultural” productions, and many other countries offer generous tax
credits to producers.

The combined result of the exchange rates, lower costs and
government incentives allows the producer of a typical TV movie
(production budget of $3 million) to reduce production costs by 25% or
more by choosing to film in Canada. Similar percentage savings are
available to the producer of a $20 million feature who chooses to film
in Canada.

It is important to note that Canada has followed an integrated
approach to launching its film/television production-oriented initiatives
during the past several years. This approach begins with a relatively
undeveloped production industry, and launches a series of (usually tax
credit-centered) initiatives to attract production activity/investment,
but often creates qualifying requirements for those incentives that
stimulate hiring of local personnel. As a result, local production
crews, actors, production managers and assistant directors gain
valuable experience/training and are therefore more capable and
attractive to other producers. At the same time, investments in
physical infrastructure are sought so that more and more productions
can be accommodated. As these production capabilities expand,
other tax incentives such as those for local labor expenditures are
offered to further stimulate demand for local production resources.
Ominously, this approach to capture productions is readily replicable
by other countries; in fact, Australia is moving along a very similar
path to that pursued by Canada.

NEXT TIME – PART VII – CONCLUSION


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II. EVENTS

DEAN AND RICHARD

DEAN AND RICHARD are now playing every third Friday
at Culver City Elks 7:30pm-10;30pm,
11160 Washington Pl.
Culver City, 90232
310-839-8891

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LA WINDS JAZZ KATS 584

NO COVER, NO MINIMUM.
Every 2nd and 4th Tuesday of the month at Viva Cantina
7:30-10:00.
900 Riverside Drive, Burbank.

Free parking across the street at Pickwick Bowl.
Come hear your favorite charts played the way they
should be.

We are in the back room called the Trailside Room.

Come on down. Guaranteed to swing.

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NEW RUSS GARCIA BOOK

Russell Garcia:   Russell wrote his auto-biography
“I Have Hundreds Of Stories, Some Of Them True”  
before he passed away at age 95 in New Zealand,
on 20 Nov 2011.  The book is out now.

Russell was a world renowned composer-arranger-conductor
who wrote music for over 100 films.  He is known for his
innovative music score for the film “Time Machine”.  Garcia
is also known in both the TV and recording fields and has
composed music for countless TV shows such as, Rawhide,
Twilight Zone, Laredo, The Virginian.  He has recorded many
CDs  in his own right, as well as with stars such as, Louis
Armstrong, Ella Fitzgerald, Vic Damone, Judy Garland,
Oscar Peterson, Julie London, to name a few.  

Garcia has also written 2 best-selling text books The Professional
Arranger-Composer “ Book I and Book II, which have been translated
into 6 languages.  He is known also for his symphonic and classical
works which have been performed by the New Zealand Symphony,
Munich Symphony, the Vienna Symphony, plus countless Radio
Symphony Orchestras throughout Europe.  He was often a guest
lecturer at many universities around the world on Symphonic
Composition Techniques.  Russell and his wife Gina made New
Zealand their home in 1971 while continuing to work in the Music
and Film Industry.  He was awarded the Queens Service Medal
for his service to music in 2009.
(www.buildabetterworldproductions.com)

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5/22/16

The SCL LA SongArts Presents:
SONGWRITER SING OUT! #3 With Music Supervisors

AMANDA KRIEG THOMAS
(Neophonic Music & Media)

ABBY NORTH
(North Music Group)
 
Sunday, May 22, 2016: 2pm – 6pm
Studio City
Location TBA

Announcing our third Los Angeles SCL Songwriter Sing Out,
open to Los Angeles SCL Songwriters (members only) to
submit one song!

If you submitted for Sing Outs #1 and #2 and your song was
not selected, you are invited to either resubmit the song you
sent, or submit a new one. The Sing Out Selection Committee
will choose the songs.

Winners will be announced on May 12. Venue information will
be provided at that time. If your song is not chosen, you will
still be able to attend.

Twelve (12) songs will be selected for presentation.  All who
submit but who are not chosen for this presentation will still
be invited to attend. 

Apply by submitting:
• Your full name
• Email address and phone number
• Name of song
• Style of song: pop, rock, rap, country, theater, film/TV, other
• An mp3 of the song
• Indicate if you’d like to perform live, play your mp3, or sing with mp3 

Our music supervisors have indicated they are seeking songs in
any genre. Production-wise, they would want the music to be
well-produced, radio quality rather than rough demos.

Send to: [email protected]
 
Submissions close end-of-day Wednesday, May 4, 2016. 
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5/24/16

THIS TUESDAY, May 24 
The BBB  returns to the west side!!
at Typhoon at the Santa Monica Airport
from  8:00pm-9:30pm (1 long set)
Reservations recommended by calling 310-390-6565

$10 cover….all ages, great food, free parking, and a NEW ELEVATOR!
3221 Donald Douglas Loop
Santa Monica, CA 90405

This will be our first show since the live album, “Live n’ Bernin’”,
was recorded last month (to be released in a few months).
We’ll be swingin’ & rockin’ the all new & original arrangements by Walter Murphy, Steve Bramson, Nan Schwartz,
Jim McMillen, Tim Simonec, Bill Cunliffe, Scott Healy, Andrew
Neu, Brian Williams, and Jeff Bunnell with 13 horns, upright
bass, guitar, and plenty of drums!!

We only get to the west side every few months so don’t miss this!

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6/5/16

CALSTATELA/OLYMPIA SYMPHONY

Dear Friends & Colleagues:

I am pleased to announce that the CalStateLA
Symphony Orchestra/ Olympia Youth Orchestra will
be giving its 2nd annual performance of  
this season on Sunday, June 5, 2016 at 3PM at the
historic San Gabriel Mission Playhouse,
320 S Mission Drive, San Gabriel, CA  
91776.

This concert is Admission FREE.

This time, we will be featuring Taiwanese violinist
Chien-Tang Wang, Gold Medal Prize Winner of the
2015 Osaka International Competition in Japan,
performing the Sibelius Violin Concerto. Angela Che
and Jeongwon Claire An, the concertmaster and
co-concertmaster of the orchestra, will perform the
Navarra for 2 violins by Sarasate.
A brand new composition by Sharon Hurvitz will be
receiving its world premiere performance, and the
Tchaikovsky Swan Lake will close the program.

Please invite your friends and family to come and
join us to witness the talents of these fine young
musicians.

Looking forward to seeing everyone there.

Sincerely,
Fung Ho

___________________________________________

MASTER IN FLM MUSIC APPLICATIONS STILL BEING ACCEPTED

The Pacific Northwest Film Scoring Program
At The
Seattle Film Institute

is still accepting applications to the One year

Master of Music (MM) in Film Composition

Recently rated as the #4 school for film scoring education
in the world by Music School Central and the #2 school
for earning a Masters of Music degree in Film Composition

Study with program creator and lead instructor

Hummie Mann

2 Time Emmy Award Winning film composer of
“Robin Hood: Men in Tights” and featured in
Variety Magazine’s article “Leaders in Learning”

Click here to listen and watch student scores from previous years

Applications are now being accepted for the 2016
school year We offer rolling admissions – applying
early is recommended Scholarship support is
available to early applicants

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You can read all previous offerings at:http://www.responsible47.com

UNTIL NEXT TIME,
THE COMMITTEE FOR A MORE RESPONSIBLE LOCAL 47

 

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