Tax and piracy pushing Hollywood to TV

Hollywood producers are finally getting a taste of their own medicine. For years aspiring actors, writers and directors have been enduring countless “don't call us, we'll call you” responses to auditions.

Well, what goes around comes around.

Not only is Hollywood losing productions to other states and countries at record rates, it can't even land a movie playing itself.

In the upcoming Marines vs Aliens feature Battle: Los Angeles, the title city will be played by none other than Baton Rouge, Louisiana.

But it shouldn't come as a surprise. In the current economy, production companies are looking for any and all ways to save money.

Louisiana is just one of a number of states that now offer huge incentives to production companies to film in their states.

Battle: Los Angeles will receive a 25% tax credit for all production expenses in Louisiana.

New Mexico provides the same incentive (this was one reason for attracting Transformers: Revenge of the Fallen there this year after shooting the prequel in Los Angeles in 2007).

If the production company had decided to film in Montana, they would receive no sales tax on all production spending and free office furniture to outfit their production company when they got there.

The result? Louisiana is now the third biggest production base for film behind the heavyweights, Los Angeles and New York.

California, as a result, has finally passed an incentive bill in late February.

Initially slow on the uptake, the Governor (yes the one that has the film industry to thank for his fame and position) has granted a five-year, $500 million tax-break, with an annual $100 million limit.

It’s a start – but by putting a cap on it, something that both Louisiana and New Mexico didn't do, it still doesn't have filmmakers beating down the door.

But unfortunately Hollywood’s biggest threat isn't New Mexico or Louisiana. It isn't even New York. It's not any other state or country taking their productions. And no, it's not the recession either.

It's video piracy.

In 2005, the major US motion picture studios lost around US$6 billion to piracy. That figure triples for the industry worldwide. This number includes both internet downloads and hard copy sales.

China and Russia are the biggest culprits and it’s no wonder – China limits the amount of foreign films allowed into the country each year and restricts the distribution of home video products.

Perhaps one of the worst examples came this year with the release of 20th Century Fox's X-Men Origins: Wolverine. In the first week of its release to the theatre, more than 1 million people had downloaded it online.

Countries are starting to take notice and 'torrentfreak.com' reports France has now passed a three-strike law for all piracy offenses.

What does all of this mean for Hollywood?

Los Angeles is quickly becoming a TV town. While film production is down 52% in 2009, activity for TV dramas and pilots shooting in LA have both showed gains of around 10% this year.

And actors are taking notice.

'A-list' movie stars are starting to jump off the film ship and onto the steady paycheck of TV. Toni Collette, Thomas Jane, Cliff Curtis and Joseph Fiennes have all joined or are continuing to headline shows off the silver screen.

And why not? HBO and Showtime have raised the bar in the quality of television and the major networks are following suit.

So now, instead of moving from city to city for a two-month film shoot multiple times a year, stars can be based in one place, shoot for 6 months with the possibility of stability if the show is a hit.

All that, plus 6 months off to either shoot a film, have a family or do absolutely nothing at all.

It looks like the landscape in Hollywood may be changing for good.

By David de Lautour

David is a screen writer and actor based in Los Angeles. He has appeared in numerous TV shows with his latest short film appearing in six film festivals around the world.