'Impact' crops up every once in a while in movie titles. Within recent memory we’ve had Deep Impact (perhaps Shallow Glancing Blow might have been more apt, for all the effect it had on audiences). Then there’s Double Impact, which serves up twice as much of Jean Claude Van Damme as any self respecting movie goer probably deserves. And who could forget Dirty Harry’s fourth outing in Sudden Impact?
The reason for this noun’s popularity is obvious enough: it conveys a certain kinetic energy, lending whichever film it adorns a flavour of dynamism and the anticipation of consequential action. Which is also why the term has found favour in policy and advocacy circles, deployed by trade associations, film commissions and other screen agencies around the globe in their efforts to marshal evidence in support of their cause.
The most recent addition to the literature was published a couple of weeks ago by the Motion Picture Association of America (MPAA). ‘The Economic Impact of the Motion Picture & Television Industry on the United States’ is the second of its biennial studies seeking to establish evidence of the instrumental value of the movie industry in the US. This follows similar studies in the UK (and elsewhere), most notably a report by Oxford Economics on behalf of the UK Film Council and Pinewood Sheperton, entitled ‘Economic Impact of the UK Film Industry’ (July 2007).
As one would expect, the MPAA pulls no punches in its press release. Headlined ‘MOTION PICTURE AND TELEVISION INDUSTRY ADDS JOBS, WAGES IN ALL 50 STATES’, it leads with the idea that US film and TV production is a nationwide enterprise, thereby deserving the support (including tax breaks) of every state in the union, and not just California and New York.
“People don’t think of the business of making movies the same way they think of other American businesses such as manufacturers or large retailers,” Dan Glickman (MPAA CEO and Chairman) is quoted as saying. “However, our industry in many ways is just like every other – we employ millions of people, we create jobs all across America, and yes, we too feel the sting of declining economic times.”
So the message is clear enough for those on Capitol Hill: in these economically straitened times, please don’t forget about the film and TV industries. In your haste to prop up the automobile industry et al, spare some thought for this other great, all-American enterprise.
It is plainly in the MPAA’s interest to present the best possible picture of the film and TV industries’ contribution to US output and trade, but that doesn’t necessarily invalidate the research.
To my mind it’s actually a rather effective report- clear and direct, with enough methodological detail in an appendix to satisfy the curious and establish its credentials. The study draws upon various data sets, filleted and collated by the MPAA, including information from primary sources, like the major studios and TV networks, as well as government agencies (e.g. the Bureau of Labor Statistics) and other proprietary data providers, and it uses input-output multipliers to calculate Hollywood’s impact on employment and economic activity.
In terms of the key findings, the report concludes that ‘the production and distribution of motion pictures and television programs is one of the nation’s most valuable cultural and economic resources’. Citing a range of indicators as evidence, the report reveals that in 2007 the motion picture and television industry was responsible for:
- 2.5 million jobs in the US (that’s 285,000 in feature film and TV production, marketing, and distribution; 478,000 in related businesses, including employees in cinema exhibition, broadcasters and cable companies; and 1.7 million employed in occupations indirectly linked, such as clothing retailers, catering, florists etc.);
- $41.1 billion in wages to workers in the US;
- $38.2 billion in payments to US vendors and suppliers, small businesses and entrepreneurs;
- $13 billion in income and sales taxes; and
- $13.6 billion in trade surplus.
These are indeed impressive headline statistics. And the report offers other fascinating insights. For example, production employees took home an average annual salary of $74,700 in 2007. That’s just over £50,000 at today’s exchange rate, which compares favourably with average feature production income on this side of the pond. Last year Skillset found those involved in making UK feature films took home on average around £28,000.
In keeping with its core purpose, the MPAA report provides a snapshot of production activity right across the US. Thus, we learn that Illinois, Texas and Florida are placed third, fourth and fifth in the production rankings, after California and New York (although it is not clear by what measures they are assessed as such).
Such is the strength of belief that production activity can have a beneficial effect on the local economy, forty states plus the District of Columbia have now enacted fiscal incentives to entice projects within their dominion. Such a strategy can pay dividends: for example, the state of Illinois, which hosted production of The Dark Knight, was home to 72 feature film and TV productions in 2007, with wages for those involved totalling over $1 billion.
As well as the bald numbers, the report is illustrated with a range of case studies. Returning to the previous example, The Dark Knight spent over $35 million in the Chicago economy, generating $17 million in payments to 793 local businesses including hotels, catering, office rental and building supplies (NB this is a film recognised as British by the authorities over here, which enabled it to benefit from the film tax credit available on UK expenditure).
Reference is also made to the positive effect of film and TV production on tourism, a theme explored in a study conducted by Olsberg SPI and published in 2007 by the UK Film Council (‘Stately Attraction: How Film and Television Programmes Promote Tourism in the UK’). According to the MPAA report, twenty years after Field of Dreams was released the eponymous cornfield in Dyersville, Iowa still gets around 65,000 visitors a year, bringing income into the area. If you film it, they will come.
The report is not, however, entirely without fault. To take one example, the authors claim that in essence ‘the motion picture and television production industry is largely entrepreneurial and dominated by small business and individuals.’ It is undeniably entrepreneurial, but I wonder in what sense is it ‘dominated’ by small businesses? The report is referring to the number of SMEs operating in the industry: 115,000 in total, according to estimates, 81% of whom employ fewer than ten people. Yet these businesses are highly dependent on a much smaller number of multinationals and corporate behemoths, those with the power to commission or green light projects and who effectively control the international means of distribution, including the studios, TV networks and larger theatre chains. Only in number do SMEs ‘dominate’ the film business; in all other respects it is the MPAA’s core membership, 'the six major producers and distributors of motion picture and television programs in the United States', that hold sway.
So what is the likely impact of this impact research? It's too early to say, and only the MPAA will be able to answer for certain. Over the coming months, lobbying for government favour and public money, in the US and in every other developed nation, will doubtless preoccupy film trade associations, screen agencies and the like. Yet one thing every party should bear in mind is that no matter how well conducted a piece of economic impact research, the methodology has inherent limitations. These are neatly summarised in a briefing paper issued by Screen Australia (when it was the Australian Film Commission) entitled ‘The Economic Contribution Of A Film Project: A Guide to Issues and Practice in the Use of Multipliers’.
With admirable concision, the paper concludes that ‘when using [economic multipliers] it must be recognised that they are estimates only and should be treated as such. To treat them as authoritative measures is a mistake but as a general indicator to suggest possible broader impacts, especially in the absence of the time and resources required to formulate more thorough studies or indeed in the absence of better measures, they are a comparatively simple and relatively effective measure’.
Simple + effective = impact.
