Los Angeles, CA (PRWEB) May 29, 2013
CelebrityBusinessAnalyst.com discussed its analysis on film subsidies this week. After the release of a Bloomberg report on how Hollywood is losing blockbusters due to other states’ tax breaks, Celebrity Business Analyst explains the pros and cons of these subsidies.
Recently, companies have produced fewer films in order to focus on major blockbuster that will potentially bring in big returns. Twelve summer blockbusters are expected to gross more than $100 million in 2013. Eleven of these were shot outside of California. Budgets for these movies are large to say the least. That’s where film subsidies come in. In order to attract business from the entertainment industry, states like North Carolina and countries like Canada offer refunds for films that film locally.
Some will argue that the benefit for the state or country in which the movie is filmed is negligible. While it’s true that most production companies bring camera operators and other specialty employees with them, there are plenty of other benefits. Cast and crew numbers for most blockbusters are huge and include jobs like security, hair and makeup artists, and craft services. There is also the potential for a rise in tourism. Once word gets out that a major film is being shot in an area, movie enthusiasts flock to the site, hoping for glimpses of their favorite stars or opportunities to be cast as extras. Other businesses not affiliated with the film see a rise in profits as well, stimulating local economy.
This stimulation will only last as long as it takes to film the movie, but North Carolina’s film office director has said that during the filming of Iron Man 3, 719 local vendors were hired, and 2,000 temporary jobs were created. The benefit for the area may seem short-lived, but one of the ideas behind film subsidies is not only to create these temporary jobs, but also to inspire a local film industry.
The downside of this is that while Hollywood still sees the majority of film production, they cannot compete with subsidies from other areas. Their budget, according to Bloomberg, is $100 million a year, while New York’s is $420 million. Hollywood also concentrates on smaller films, only subsidizing those that have a production cost of $75 million or less.
CelebrityBusinessAnalyst.com finds the debate about film subsidies interesting. As with most things in life, there are pros and cons for all sides involved. For the most part, it seems as though the tax refunds are mutually beneficial. States’ subsidies do a lot to inspire film industries in other states. While this might not be good for Hollywood, it’s a great thing for states that need a temporary boost.
Celebrity Business Analyst is a website that is interested in what it takes to make movies. The site analyzes movie stars’ salaries and the costs of film production.