Underscoring the cooling-off of Southern California's entertainment economy, shooting on the streets of Los Angeles dipped sharply last year as tighter spending sliced into film, TV and commercial production.
The numbers released Friday by Entertainment Industry Development Corp., which issues permits for about 80% of the shooting done in Los Angeles County, show an overall drop of 4% in production days, or days spent shooting in areas of Los Angeles outside of sound stages.
That marks the strongest statistical evidence to date that the soaring production growth Southern California enjoyed in the mid-1990s reached a plateau in the middle of last year as studios and producers significantly tightened activity amid pressure to contain costs.
Given the increasingly larger role entertainment is playing in the Southern California economy, the dip in production is not only an unwelcome development for the entertainment industry, but also for the region as a whole because thousands of small to medium-size suppliers and service companies do business with Hollywood.
For now, economists hope the flattening of Hollywood's production growth is a temporary pause. But, they warn, it could be extended depending on what happens to the domestic and global economies, especially in Asia.
"The two ifs are how the U.S. will do in the next 12 months, and the Asian crisis, which is showing its impact on the entertainment sector," UCLA economist Rajeev Dhawan said.
In addition to tighter costs, executives blame factors such as the weak Canadian dollar and tax breaks that encourage producers to shoot in Canada. Also, a threatened actors strike early last year disrupted production schedules.
The 4% drop in production days, which also includes such categories as photo shoots and student films, understates the decline in key areas that are more important to the region's economy.
Feature film shooting, for example, took a sharp 13% drop as studios cut their bloated movie slates. Commercials, hurt by the international economic troubles, fell 7.5%, while television dropped 4.5%.
Although activity remains high compared with historical levels, the numbers show the first drop in growth since production eased slightly in 1994 and mark a shift from past years in which it soared--nearly 30% in 1996, for example, and 27% in 1995.
"I think there's a risk of a ripple impact. When you cut down on feature films, that is where you can make big money when you are a supplier or a craftsperson," said Jack Kyser, chief economist of the Los Angeles Economic Development Corp.
Cody Cluff, president of Entertainment Industry Development, said at least 29 feature productions are scheduled to start filming in the area between now and March 1, a sizable number. But he added that they appear to be lower-budget productions than ones that usually film in the area.
He said some of the productions were postponed due to the threat of a strike by Screen Actors Guild members last year. Although a strike was averted, the possibility of one led some producers to put off production.