Testimony before the Pennsylvania House Tourism & Recreation Committee
May 1, 2009
Sharon Pinkenson, Executive Director
Greater Philadelphia Film Office
Good Afternoon Chairman Kirkland, Chairman Barrar, and distinguished members of the House Tourism & Recreation Committee. It is my pleasure to share with you today the history of the film industry in Pennsylvania and to provide you with some perspective on one of the fastest growing industries in our Commonwealth which started long before Rocky Balboa ran up the steps of the Philadelphia Museum of Art.
In 1996 the film industry celebrated its 100th anniversary, and it can be argued that it began right here in Philadelphia. Siegmund Lubin was a German immigrant who made his home in Philadelphia and began his first film studio in 1897 only 4 blocks from here on Arch Street. He was a motion picture pioneer, and considered by many as the first movie mogul, building an empire of six studios in five states. His first studio was at 20th and Indiana Streets in Philadelphia, and stood nearly intact until a decade ago when it burned to the ground in the midst of plans for its restoration. His second big studio, The Betzwood Film Studio, was located in Montgomery County near Valley Forge. Soon after Pop Lubin, as he was known, moved to Los Angeles for the warm weather along with the rest of the industry, and for the most part filmmaking remained in Hollywood until the 1990’s.
Pittsburgh and southwestern Pennsylvania also has a direct link to the earliest beginnings of the film industry in the United States. The Metro Company (later becoming MGM), the first theater and offices for Warner Brothers, the world’s first nickelodeon, and the first public television station all had their beginnings in southwestern Pennsylvania. In the earliest days of the industry Pittsburgh was a center for distribution and “film exchange” when shipping film long distances was more risky and, until the 1960s, Pittsburgh served as a major regional distribution office for Paramount Pictures.
I began my career in the film industry as costume designer and started in my current role as Executive Director of the Film Office in 1992. Prior to then no films were shot entirely in the Philadelphia area, not even ROCKY, or TRADING PLACES. But filmmakers came from time to time to shoot our spectacular skyscrapers, our picturesque small towns and old industrial cities. They loved our rolling hills, bucolic farms, iconic historic locations like Independence Hall and City Hall, idyllic university campuses and penitentiaries alike. We are blessed with a location perfectly situated in the middle of the east coast corridor with an international airport and a temperate climate. And we have a cooperative government and citizenry that welcomes them to our neighborhoods and institutions, great hotels and eateries, and exceptional cultural experiences. We have neighborhoods from every period in our nation’s history, and we have had the considerable pleasure of standing in for other places as well. And those are a few of the reasons why they come for the short term. For example, Philadelphia has doubled on film for New York countless times; as Paris recently in the soon to be released TRANSFORMERS 2; and as Washington, DC and the Naval Academy at Annapolis, MD. And as our film production incentives have time to work, our greatly expanded region is getting more and more film production activity. Reading is doubling for Vietnam in THE LAST AIRBENDER, and Bethlehem stands in for Singapore in TRANSFORMERS 2. And we’re even attracting foreign filmmakers to PA to shoot feature films, TV shows and commercials. The more that Pennsylvania is in film and on TV, the more the world gets to see our resources, our beauty, and our advantages. The intangible benefits cannot be overlooked.
Harmelin Media calculated a few years ago, “We've projected the media value of the "Pennsylvania" exposure in the movie WONDER BOYS. The movie -- released in February 2000 -- had an equivalent U.S. media value of $900,000 during its initial theatrical release.” So I ask you, imagine the media value of the movies PHILADELPHIA, THE SIXTH SENSE, or NATIONAL TREASURE and the civic pride they stimulate? It is beyond measure.
In the early 1990's, the US Federal government canceled investment tax credits. Shortly afterward and not coincidentally, the Canadian government began to offer an 11% tax credit to American producers who shot their films in Canada because they recognized the value of an industry that paid high wages to all kinds of workers and created a product that benefited Canada and polluted nothing. And the Canadian Provinces responded by adding an additional 11% upping the tax credits to 22%, and in Alberta and Saskatchewan the incentives were increased to 33%. First to bite were the producers of Movies of the Week, which up until then were the lifeblood of the Pittsburgh film industry; then the television series left, and then the rest of the independent and studio feature films. Before long, studios were built, crews were trained, and a robust Canadian film industry was born in the east in Toronto and Montreal and in Vancouver in the west. And the US film workers heard the loud sucking sound of the film industry moving northward.
This phenomenon was known as runaway production. Filmmakers no longer made decisions about where to film their projects solely based on creative options and the attributes of a location anymore. From that point forward, filmmakers acted like all smart business people. They chose their locations based on where they could get the best financial deal, save money and put the savings into making a better film. Incentives were popping up all over the globe in places like Ireland, Australia, New Zealand and South Africa. And the entire US film industry suffered.
Finally in 2003, buoyed by the outrage over loss of work from film crews and actors throughout the US, New Mexico and Louisiana were the first to offer incentives to the filmmakers to lure them back. A few other states, Pennsylvania included, followed in 2004. And we all experienced success in attracting production much to the consternation of California which dug in its heels and refused to recognize that that it would lose the business irreparably if it didn’t “even the playing field” by providing incentives to an industry that was known as Hollywood. Last month California, whose film workers were leaving in droves, announced just such an incentive.
And why do we want to lure the film industry to Pennsylvania? Because film productions hire hundreds of local residents as technical crew, as teamsters to drive the production vehicles, and local actors for both principal and extra parts. Jobs include painters, carpenters, electricians, hair dressers and makeup artists, animal handlers, teachers, tailors, camera operators, editors, artists, office workers, cooks, gardeners, set decorators, location scouts, and dozens more. They fill our hotel rooms, eat in our restaurants, shop in our stores, rent our cars and equipment and purchase our lumber and paint and tools and supplies. They run their considerable dollars through our banks, use our dry cleaners, our phone rentals and communications services, office supplies, caterers. And they pay our local and state taxes.
Paramount Pictures recently submitted an that described the impact M. Night Shyamalan’s film THE LAST AIRBENDER where many of you visited earlier today. Here are a few key points.
"Filming on location is a rather expensive and complex task – with an average shooting schedule of 75 days, a production must somehow manage in a short period of time to:
· Hire the necessary crew of an estimated 250 to 500 or more employees;
· Arrange for all of the equipment, trucks, hotel rooms, office space, catering, and set construction, to name just a few, and
· Secure all of the locations for filming (which can number more than 75), including parking for 1,000 linear feet of trucks and 150 cars each day, the signatures needed from affected residents and merchants, and all of the approvals from the various local, state, and /or federal government agencies. (note: one of our industry’s greatest challenges is convincing government agencies that measure time in weeks, months, and years, to accommodate production, which measures time in minutes, hours, and days.)
These tasks are compounded by the sheer size and scope of a film like The Last Airbender. The economic benefit of all of this work is clear in a direct and tangible way (the expenditure of millions of dollars, the hiring of hundreds of local workers, and the building of a production infrastructure) but also on a more subtle, long-term, and less tangible level (the exposure of a city on thousands of screens around the world, which builds pride and can encourage tourism).
Over the course of the anticipated 67-day shoot schedule while in Pennsylvania, seven months of prep, two anticipated months of strike, and eight anticipated months of post-production, The Last Airbender is estimated to spend more than $78.2 million in the local economy, including:
The economic benefit of all of this work is clear in a direct and tangible way (the expenditure of millions of dollars, the hiring of hundreds of local workers, and the building of a production infrastructure) but also on a more subtle, long-term, and less tangible level (the exposure of a city on thousands of screens around the world, which builds pride and can encourage tourism)."
The complete report can be found as an attachment to my testimony.
I grew up in a family that owned a small factory in Philadelphia that made neckties and like other factories in Philadelphia, it no longer exists. It is clear Pennsylvania has lost much of its "old economy" manufacturing business, most of which was centered in the southeastern and southwestern parts of the state, that will never come back. I urge you to think of filmmaking as manufacturing for the 21st century. Maybe we're not manufacturing moving parts anymore, but we are manufacturing moving pictures.
And now we’re building those "factories," which we call soundstages, and increasing suppliers of equipment and services, thanks to film incentives. The first tax credit program was passed in 2004, was amended in 2006, and was changed again to the program we have today, the Creativity in Focus tax credit program that began in 2007. It’s an excellent program, sustainable and highly thought of by the film industry even at 25%, but it’s far from the most generous. States like Michigan have instituted 42% tax credits with no annual cap to lure the film industry and there are now incentives in about 40 states in the US with more being added all the time.
But in Pennsylvania, there are 3 bills to suspend the program and even the threat of reduction or cancellation of the PA program has hurt our ability to attract the work. Were you the investor, would you complete plans to build a multimillion dollar soundstage like the ones planned for Delaware County and Montgomery County under those circumstances? For if the tax credits are canceled, the filmmakers will take their productions and the jobs, tax payments, investments and public relations bonanza to states with a more dependable program.
I thank you for listening and welcome your questions.
