Los Angeles County’s entertainment biz has lost nearly 18,000 jobs over the past year, due to the combined effects of the de facto strike, runaway production and the recession, according to an economic forecast due to be released today.
The UCLA Anderson Forecast estimates jobs in the Hollywood motion picture production business fell 11.8% to 133,600 in February from 151,400 in March 2001. And the UCLA economists believe many of the eliminated slots will not be filled again, due to the continued move of feature production to lower-cost locales.
“We don’t see a lot of these jobs coming back although we’re also not anticipating any more major losses,” said economist Christopher Thornberg. “It’s a reflection of the larger changes in the business with more of the jobs in Los Angeles in management, administration and design rather than production.”
Shrinking production jobs
Thornberg estimated the share of Hollywood production jobs has shrunk from 70% to 55% over the last two decades due mostly to the industry’s desire to hold down filmmaking costs. Economist Tom Lieser said the trend should not be viewed as Hollywood’s death knell, however.
“It’s inevitable that production will migrate to less-expensive locations, but that doesn’t mean the head office is threatened,” Lieser said.
Thornberg agreed, saying that the transformation of showbiz will not be as disruptive to the region as the aerospace industry’s downsizing in the early 1990s as the Cold War ended. “The trend is terrible for production people based in Hollywood, but the best analogy I can give is that Silicon Valley doesn’t make computers anymore because it’s less expensive to make them elsewhere, but it’s still the center of that world,” he added.
The UCLA estimate comes three months after the Los Angles-based Center for Entertainment Industry Data & Research released a report showing the migration of features — not even including TV films — to Canada has led to losses for the U.S. economy of $1.8 billion and of 22,400 jobs in the past three years.
Annual job drop
Thornberg noted the overall number of Hollywood jobs had been dropping by about 2,000 annually, mostly due to runaway production, before last year’s boom in shooting due to threat of strikes by writers and actors. But he pointed out that the relative ease of shooting features in non-Hollywood locations precludes any significant rebound in local feature activity.
“A film production is something that can be easily encapsulated and taken elsewhere, as opposed to TV,” Thornberg added, noting that activity levels for Los Angeles-based TV production will remain consistent in the foreseeable future.
UCLA also projected state nonfarm payroll employment will rise 0.7% this year and 2.2% in 2003. Its national forecast calls for a 1.2% decline this year, followed by a 0.1% decline in 2003.