California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

According to a recent report, on-location filming across all categories declined 19.4
percent in 2009 compared to 2008 in the state, the steepest year-over-year decline
since tracking began in 1993.

The nonprofit Film LA recorded 37,979 permitted production days (PPD) in 2009 compared
to 47,117 tallied in 2008 On-location feature film production posted a year-over-year
loss of 29.9 percent (4,976 PPD in 2009 vs. 7,096 in 2008), a decline which would have
been larger, were it not for the California Film and Television Tax Credit. Thanks to
incentive driven production, the feature category posted a fourth quarter PPD gain of
13.6 percent in 2009 over 2008.

The year 2008 marked a low point for on-location feature film production in Los Angeles,
and 2009 proved even worse. Nonetheless, the benefits of California’s film incentive
program -- begun July 2009 -- are now evident. Of the dozens of film and television
projects that qualified to receive the state credit, 17 have already pulled permits
to film in the Los Angeles area. Ten projects were features, films that would not have
been made in California otherwise according to FilmL.A., and these projects generated
nearly 300 PPD over the last six months of 2009.

The Commercials category finished the year down 12.0 percent over 2008 (5,292 vs.
6,016 PPD). Commercials have seen year-over-year declines each year since 2006.
However, the last two quarters in 2009 give cause for hope of a rebound. The third
and fourth quarters of 2009 saw Commercial PPD increases of 10.2 and 20.5 percent,
respectively -- figures that may indicate a recovering economy and willingness of
more companies to increase spending on advertising.

Television production posted an annual loss of 16.6 percent over 2008 (15,933 vs.
19,100 PPD). Each of the main Television subcategories saw annual drops, with the
sharpest declines experienced by the Reality and Sitcom genres. Reality was down
24.0 percent (5,007 vs. 6,592 PPD) for the year. Industry sources tell FilmL.A. that
many reality shows that filled the gap left by shuttered scripted programs during
the Writer Guild's strike were not renewed into 2009.

Sitcoms, which were down 36.4 percent (863 vs. 1,357 PPD) may have been more
restricted to stages in 2009 as a result of the increased expense of on location
production. Dramas were down 8.6 percent (6,154 vs. 6,736 PPD), this may be
attributed to changes in the primetime network schedule, and TV pilots finished
the year down 8.3 percent (802 vs. 875 PPD).

I am Tim Johnson and this has been the California Business Minute.