Scheduling shifts, increasing content demand drive surge. Could it undercut efforts to expand California's tax credit program?
Television production in the Los Angeles region spiked in the second quarter, rising by 33.7 percent from the same period last year, according to a survey released Wednesday by permitting agency FilmLA.
With cable continuing to expand, the advent of premium streaming services like Netflix, its rivals and the networks struggling to keep up, the demand for TV content is surging. The survey, based on the number of permitted on-location shooting days, attributed the gains in part to production shifts, as the TV biz launches more shows in the summer.
The new figures represent a major turnaround from the first quarter, which was down by 9.2 percent from the same period a year ago. The second quarter was also way above, coincidentally by the same 33.7 percent, the sector's five-year quarterly average.
That's a good thing for a region that has been struggling to remain the primary shooting locale for TV and films amid increasing competition from other states and nations offering well-funded tax credit programs. On the other hand, the surprisingly strong second-quarter numbers could undercut ongoing legislative efforts to extend and expand California's own TV and film tax credit programs.
“When a number like this hits, opponents of the tax credits will jump on it and say it shows they're unnecessary,” FilmLA President Paul Audley told TheWrap. “But it's critical to note that we're barely above 50 percent of what we were in 2006-2008, the peak years for TV production.”
Permitted production days hovered near 7,000 annually during those years, rather than today, when the figure is around 4,000 days.
“As much as anything, it shows that there is a dramatic shift in the way that television is being produced,” Audley said. “It will be very interesting to see if this second-quarter spike comes out of the third quarter, which is traditionally strong, because of the numbers of summer shows shooting.”
The TV gains were nearly across the board. The on-location production of dramas was up 58.6 percent from the same period last year, reality shoots rose 64 percent, sitcoms were up 5.5 percent and Web-based TV went up 3.4 percent. The only sector losing ground was TV pilot production, which fell 26.6 percent.
The current tax credit program was a key factor in the surge; 43 percent of the TV drama production came from state-qualified projects including “Legends,” “Major Crimes,” “Murder in the First” and “Teen Wolf.”
Feature film production in the L.A. area declined 5.3 percent last quarter, with 10.8 percent of the production days attributed to films taking advantage of tax breaks, including “American Sniper,” “Entourage,” “Scouts vs. Zombies” and “The Purge 2.”
Audley says he hopes people will take the long view in terms of the TV production spike and the pending tax bill, AB1839.
“History teaches us how quickly apparent gains in local production can be swept away,” he said. “Strengthening the programs that make California competitive and attractive for filming is essential to our state's long-term prosperity.”