THE ECONOMIC ARGUMENT
Every international production that can be persuaded to shoot on location in a particular destination means a high-profile, low-impact injection of foreign currency that can create jobs, stimulate small business activity and potentially expose the country’s brand and positive images to a wider market.
In this first short video, you'll see some of the ways that the film industry has boosted employment opportunities in the city of Ouarzazarte in Morocco.
The main benefit to a local economy is that film production is DISINTEGRATED which means that film production companies do not typically own the tools of production. Instead, services, skills and labour are all bought in from the local community in to participate in the production process. This can result in significant economic impact along the value chain.
Jobs created directly for/by the film industry include:
The industry doesn't just work with people who make their living in the film sector, it uses the services of a whole range of local businesses, which in turn creates opportunities for a whole range of jobs. These include:
The sector’s expenditure on jobs and services is a direct investment of cash into the local economy. The average feature film will spend around $100,000 a day when in production. The average TV commercial can spend $150,000 in just two days and even the smallest still shoot will drop $50,000 a week into the local economy. Further, economic indicators estimate that for every dollar spent on the production, an additional $2.50 is spent in the wider economy, on hotels, restaurants, petrol, car hire, even shopping – a Multiplier effect of 2.5 to 1. In South Africa, the Multiplier for film is typically calculated at 2.89 to 1 - meaning that for every rand spent on film production, R2.89 is spent in the broader economy.
An excellent example of the kinds of economic impacts a film can have on employment and small businesses in the host community is the 2004 Tom Cruise movie, The Last Samurai, which shot in the Taranaki Region of New Zealand.
When you watch the following clip, consider all of the different elements that were likely manufactured or rented from New Zealand businesses, solely for the production of this film.....
At a rough guess:
And that's before we even consider the crew, actors and stunt people employed directly by the production, and the cameras, rigging, sound and lighting equipment.
And that's just for this ONE SCENE.
Very simply, this budget would not have been spent in New Zealand if the country had not prepared itself to attract and support filmmaking.
In fact, Film Taranaki, the local Film Commission, conducted an economic impact assessment on the film’s contribution to the economy. The research showed some remarkable benefits, including
Although nearly 47% of the spend was directly with the film industry, other major beneficiaries of the activity included Property Rental, Accommodation, Retail, Vehicle Hire and Construction. In fact, economic activities were reported in 13 of the region's 14 economic sectors.
In terms of Job Creation too, the film employed 1403 Full Time Equivalent jobs over a 12 month period (680 of those being direct impact.) The accommodation industry alone gained 260 jobs and the retail sector 134 jobs.
What's important to remember is that the Last Samurai was actually set in Japan. New Zealand however was able to play stand-in, because it offered equally good locations, great services and - most importantly - value for money.
Read through the following report and note the kinds of economic impacts throughout the economy - as well as how film is measured for its expenditure and other impacts.