Movie-making Good For the Economy!
By Dick Rolfe, CEO – The Dove Foundation
Everybody, at one time or other, has dreamt of being in show business. Today, forty states are vying for the opportunity to be in the movie-making business. Each one is offering a wide menu of competitive incentives to lure Hollywood producers into their state.
Michigan is one of the recent entries into this arena. A little over a year ago, state lawmakers crafted one of the most lucrative incentive packages in the country. The Michigan Film Incentive offers up to a 42% return on every qualifying dollar spent making a movie or television show in the state.
Hollywood producer, Ralph Winter, a Dove Foundation advisory board member recently interviewed with Michigan Business Review reporter, Olivia Pulsinelli.
Winter’s comments are enlightening. They reflect the thoughts and concerns shared by many filmmakers who contemplate taking their “show business” out of California to another locale. This interview is a must-read for anyone affected by the current economy, suffering from high unemployment and business losses. Movie making could play a significant role in boosting the economy of states that are willing to compete for the business.
Luring showbiz means understanding business
(an interview with Hollywood Producer, Ralph Winter)
By Business Review reporter Olivia Pulsinelli
|| the left,
Former Michigan State Rep. Bill Huizenga
Producer, Ralph Winter
Producer Mark Clayman P
Michigan’s year-old film incentives have sparked debate in the state — but it’s sparked activity, as well.
What role do you think Michigan could play in the film industry?
“I think that producers around the world are looking for the best value for their money. So where Michigan can fit the bill, I think people will come.
“One of the first things you try to figure out when making your film (is) where am I going to shoot, what are the locations I need, what are the seasons I need, etc. Those things start to be the sort of general qualifiers, and then from there, you start to narrow it down, and you start to see where can I get the best services, where is there an infrastructure, a crew, soundstages and rebates. …
“All of those things are attractive to not just a Hollywood film producer, but any film producer; because that’s how you can get the maximum impact for your dollar.
“So typically, when we budget a movie, we try out three or four locations for the same shooting schedule. You might take a 50-day shooting schedule and say, ‘OK, what’s that going to cost me in Vancouver? What’s that going to cost me in Michigan? What’s that going to cost me in New Orleans?’ You make choices on those three locations based on what your story is. …
“I don’t want to be smart about it, but in and around Detroit, do you have enough crew there? That’s sort of a depressed area that’s fighting unemployment. Is it safe there? Are there soundstages? Is there crew available? Are there enough hotel rooms I can put my crew up? Is there something for my crew to do on the weekends? All that kind of stuff. Those kind of very practical things.
“We feel like where we bring a large movie, and we spent $20 (million), $50 million, there’s usually a multiplier of two to three times that amount, because we buy lumber, we buy groceries, our crew buys beer, we buy hotel rooms, we hire local crew, we rent equipment, we rent cars. … So it multiplies through the community.
“Hopefully, you make it attractive for people to come, and you get more of a benefit than the rebate you’re handing back over.
“The more you can measure (the multiplier), the better off you’re going to be, too. I think then you’ve got a justification for continuing the rebate or for justifying it to your legislature. And testimonials from business people who’ve had a good experience with it go a long way in saying, ‘Yeah, let’s keep bringing in new business into Michigan because it builds my business, it helps my profit line.’”
What do people in Hollywood or others in the industry think of film incentives?
“We’re upbeat on the incentives. I think that, again, it has to be compared as a package. … If you don’t have any crew, you don’t have any soundstages, then I have to fly those people in — it’s expensive, and it starts to offset the benefit of that incentive.
“You’ve got to look at the whole package; you’ve got to look at all those things together. How easy is it to get the rebate? Am I waiting two years until I qualify and get all my marbles lined up in a row? All those things play into it.
“And frankly, it’s kind of the same whether you’re an independent filmmaker or a studio — you’re making the same kind of comparisons.”
Is Michigan getting any kind of attention in Hollywood?
“It’s getting attention unfortunately because of the auto market and how that is depressed, and therefore maybe they want our business more.
“And you represent the middle of the country, so you have that middle-of-the-country look, so you’ve got to have a script that does that. If I have a script that needs a desert or an ocean scene, I’m probably not going to come here. Jungle? Probably not coming.
“And some of it depends on budget. If I was going to shoot ‘Wolverine’ here — no pun intended for University of Michigan — I would have to have a compelling reason, because I can find a neighborhood that looks like Middle America in Vancouver. There I get a tax incentive, and I get an exchange rate. So you have to beat some of those incentives to actually attract people.”
How well is Michigan promoting itself to the film industry?
“I think Janet Lockwood (director of the Michigan Film Office) is doing a good job on that.
“You’ve got 40 some other states trying to do the same thing, so how do you make your state stand out? … Relationships with studios are probably the quickest way to do that. And then just make sure you’re available and connecting with filmmakers who would be thinking about or leaning toward being here in Michigan. …
“Again, remember it’s a busy market, there are a lot of people doing the same thing. New Orleans and Boston and North Carolina and Vancouver are just as anxious to get the studios’ business as Michigan.”
A group of senators has proposed capping the incentives, but others say even the idea would deter filmmakers from coming here. What do you think?
“Well, it’s a little bit of a deterrent because you don’t know if you’re going to fit in (under the potential cap) … and you need to plan and do your location scouting four to six months in front of shooting. Can somebody assure me 10 months out that I’m going to qualify?
“I don’t want to start down the path of six months of preproduction and scouting and four months of shooting only to find out that I’ve missed the deadline or that now I’m not qualified under the cap. Why would I take that chance? Why would I start down that path? I might as well go someplace where there is no cap or I know I’m going to get the incentive.
“I understand it’s easy for me to say that — it’s harder for the state legislature, because they want to know how much are we really allocating to this program. So I get that.”
Winter suggested finding some way to assure filmmakers they will qualify under a potential cap if they meet certain milestones.
“It’s basically about just wanting to get the best return on your money. So you put yourself in my shoes — you try to figure out how do I spend the least to get the most on screen? Because it’s show business — you have to understand the business part.”
Even if Michigan were to build up a film-industry infrastructure, would it still always need the incentives to bring films here?
“It’s an interesting question. … Are you heading down a path that you can’t turn back from? And the answer to that I think is, ‘do you want to be in the film business?’ I can shoot a movie anywhere — I’ve shot all over the world. So the question is really: Do you, Michigan, want the film business? Do you want to attract and tell stories and develop filmmakers in Michigan? It’s up to you guys.
“You might be on a path that locks you into having incentives, but it’s a changing world. The culture’s changing. … It sounds like (saying) ‘We’re just throwing our money away.’
“And the question is, Are you? Are you developing filmmakers? Do you want to develop filmmakers? This is a world that uploads 57,000 hours of video to YouTube every week. The culture is telling stories. The culture is using video and film and technology to tell stories. Do you want to be a part of that, or do you want to be an observer?
“So yeah, you might be on the path that once you start the incentives, you’ll have to keep them up. But maybe not if you’re able to develop writers, directors, financiers who say, ‘Let’s make our own movies in Michigan. Let’s train on Hollywood movies that come to us, and we’ll build up an infrastructure of local talent that can write and direct and finance and distribute our own movies.’
“Because the day’s coming where it won’t matter where you’re based. The movie
companies came to California for the sunshine. … Now, technology allows us to make movies without that overabundance of sunlight — now it doesn’t matter.
“It’s up to Michigan to decide what they want to do.”
Published by permission Michigan Business Review ©
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