Location filming for movies and TV commercials on the streets of Los Angeles, once as prevalent as the corner taco truck, is rapidly fading to black. Double whammies of the recession and out-of-state economic incentives for producers have caused on-location film shoots in the Los Angeles area to fall to their lowest levels on record.
Since the collapse of Southern California's aerospace industry a decade ago, the labor-intensive entertainment industry, in which hundreds of people are needed to make a single movie or TV commercial, has picked up the slack in the local economy. But as Hollywood and Madison Avenue respond to lower consumer spending by reining in production of movies and commercials, the pullbacks are having a dire effect on workers in the industry.
Despite a strong start to the year at the box office, studios are reducing the number of movies they produce and laying off thousands of employees in response to weakening DVD sales, declining local TV ad revenue and diminishing sources of financing.
Adding to the pain, advertisers, which have provided steady work for many actors and jobs for production workers, are making fewer commercials. They are trimming marketing budgets as consumers cut back purchases of both household and big-ticket items.
Los Angeles' entertainment industry lost more than 22,000 jobs in January alone, more than any other sector, according to the California Employment Development Department -- roughly 10% of the available workforce. The entertainment industry employs more than 200,000 people and pumps $20 billion to $30 billion into the local economy, the Los Angeles County Economic Development Corp. estimates.
"A combination of limited financing, reduced studio budgets and reduced ad buying are all hitting Hollywood at the same time," said Kevin Klowden, managing economist at the Milken Institute in Santa Monica. "The result is less production and clear job losses."
The latest indicator that Los Angeles' production industry is sharply losing altitude will come today, when the entity that processes permits for local film shooting reports a 56% plunge in activity for the first quarter, a new low. TV commercial production fell 34%, underscoring the deep cuts in advertiser spending that have occurred since the economy slipped into recession.
