Hollywood At Heart of LA, California & US Economic Backbone

FilmLAFor Filmmakers, Research1 Comment

Without a doubt, the entertainment industry is a fundamental and indispensable pillar of the economy.  That’s true not only in greater Los Angeles, but also the State of California and the entire United States.  Whether measured in terms of employment, the number of business establishments,  positive balance of international trade or as a source of tax revenue, the importance and impact of the industry at the local, national and international level is simply staggering.

Consider: there are more than 6,600 business establishments in California that service the film and television industry, which is triple the roughly 2,000 Starbucks locations in the state.  Combined, these entertainment businesses employ over 212,000 Californians. Moreover, many of these establishments are small businesses with fewer than 10 employees each.  In 2008, California industry workers earned a whopping and critical $16.7 billion in wages, much of which went on to find its way into California’s cash-strapped economy.

But the numbers get bigger.  Nationwide, the industry supports over 2.4 million jobs and 95,000 companies, 93 percent of which employ fewer than 10 people according to the Motion Picture Association of America (MPAA).  In 2008, the industry made payments of $40 billion to U.S. vendors and small businesses, paid $41.7 billion in wages to industry employees and generated roughly $13 billion for cash-strapped state and local governments in the form of income and sales taxes.  Such monies fund public schools, infrastructure and critical services like police and fire departments–all critical during financially difficult times such as these.

At the international level, politicians often speak of the need for the United States to remain or become more competitive.  Thus, in what should be a point of national pride, the fact is this: the U.S. based entertainment industry IS competitive, if not dominant.  In the global economy, the entertainment industry is one of the few American industries with a positive trade surplus, which is a colossal $11.7 billion.  According to the MPAA, the trade surplus is “larger than surpluses of the telecommunications, management and consulting, legal, medical, computer and insurance services sectors.”  Finally, in almost every major international market, US-produced entertainment dominates the international competition and accounts for 64% of the international box-office revenue.

There is no question the entertainment industry is one of the few remaining economic powerhouse industries to which the United States can virtually lay sole claim.  The critical question facing those in California, particularly in the Los Angeles region, is whether they want to fight for and retain the status as the Entertainment Capital of the World, or to cede the treasured resource to other states like Louisiana or Michigan and other nations like Canada or Romania.  If it’s worth keeping, and there’s no doubt it is, then it is worth fighting for.

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