Hollywood remains a dynamo for the Southern California economy and is the area’s fifth-largest export business. The impact is both direct and indirect, according to a new report from the Los Angeles Economic Development Corp.In addition to accounting for 251,600 jobs in the greater LA area, there’s an important multiplier effect. “The entertainment business is like the center of a wheel with spokes extending out,” says Jack Kyser, chief economist for the LAEDC. “People say all the job growth here is in the construction industry, but it’s not.”For tourism, the area’s biggest business, accounting for over 500,000 jobs last year, one of the biggest draws is the presence of the Hollywood studios. “What drives a lot of our tourists to California is the motion picture industry, which also has a huge impact on our apparel industry as well as furniture, manufacturing and even jewelry,” says Kyser.In terms of overall economic importance, Hollywood ranks just behind business and professional services. But measured by jobs-per-industry, it falls after technology, direct international trade, and tourism.Most of the region’s employment is centered in Los Angeles County, which accounts for just over 240,000 entertainment industry jobs. Right now activity is booming, observes Kyser, because of a heavy television pilot season. Overall, however, jobs have dropped slightly because of the trend toward runaway production in feature films, as well as a slowdown in DVD sales.Right now, he notes, principal photography on 20 feature films is taking place in Los Angeles, and two in the rest of California. Another 30 films are being made elsewhere in the United States—with Louisiana alone accounting for three. And another 20 American films are being made overseas.Kyser hopes that California legislatures finally pass some tax incentive for making lower-budget films in the state, but thinks it may be hard to pass until after the fall elections.At the same time, the official numbers probably underestimate actual activity, the economist concedes. “We’re about 20 years behind in what we capture statistically in terms of the new technologies that are producing much of the new jobs growth.” He cites video games as one major area of employment that’s not on the radar. The adult entertainment business, he estimates, contributes another $4.5 billion in revenues that go unmeasured in official calculations.
Written by Jack Egan