Motion Pictures
Overview
Motion pictures are a part of the burgeoning entertainment and electronic media industry. Entertainment covers recorded music and filmed entertainment, which includes movies and series television programming, whether shown on movie screens, broadcast on network or cable television or viewed on videocassettes. For the motion picture industry—the oldest medium within this broad entertainment and electronic media industry, the primary segments include: motion picture and video tape production, which includes the production of theatrical and non-theatrical motion pictures and video tapes for exhibition or sale; motion picture theatres; and home video rentals.
The U.S. motion picture industry is the world leader in terms of size and revenues, and international markets are critical to its continued success. U.S. films, videos and television tape are shown in over 100 foreign countries. In a number of developed country markets, the theatrical exhibition of films has declined, while other means of exhibition—videocassettes and cable, have grown. In many of these countries, U.S. films have also acquired a share of box office receipts equal to or higher than that of domestic films—a situation that encourages protectionism. However, foreign markets have recently increased their own domestic production, reflected in increased share of box office receipts and admissions.
U.S. Box Office Receipts and Home Video Sales & Rental
Receipts,
1989-1998 (Millions of 1998 Dollars)
Source: Motion Picture Association of America
For more detail of above graphic
Recent years have seen merger and acquisitions that have led to gigantic entertainment companies such as Disney, Time Warner, News Corporation (Fox), and now Viacom-CBS. These companies account for about three-quarters of the industry’s revenues. Most observers view such mergers as necessary to reduce costs, especially related to film production and distribution. However, the result of these mergers and acquisitions are conglomerates that produce content (i.e., film media) and distribute it through as many channels as possible.
Besides, it is doubtful that film companies have made much progress in reducing costs. According to the Motion Picture Association of America (MPAA), the average cost of producing a motion picture was about $53 million in 1998, double of what it was in 1991. Furthermore, growth in the number of new releases by MPAA member companies has slowed dramatically in recent years. Independent (smaller) film companies, which rely less on well-known and highly paid stars, are affected less by these cost trends, although they continue face marketing problems. Based on continued growth from independents, releases by all U.S. companies rose from 460 in 1997 to 490 in 1998, an increase of 6 percent.
The cost of distributing films, which often is handled by film production companies or their subsidiaries, has risen over the last several years, especially the costs of printing (i.e., making prints of films) and advertising. According to the MPAA, the combined average cost per film to its member companies for advertising and printing was $25.3 million in 1998, up 13.5 percent from 1997. Distribution costs have increased every year since 1986.
Theatrical exhibition of films remains the principal method for introducing new movies to the public. For the last three years, box office receipts have shown strong growth and growth in admissions have rebounded. Specifically, box office receipts increased 8.6 percent (in real terms) in 1998 to $6.9 billion and are expected to exceed $7.3 billion in 1999.
The steady increase in the number of U.S. movie screens is also an indication of continued profitability for film companies and exhibitors. According to the MPPA, the number of screens was 34, 190 in 1998, up 8.0 percent from 1997. The number of screens has increased every year since 1990; similar small increases are expected over the next few years. Growth in multiplex theatres has particularly been a boon for many a downtown in recent years.
Worldwide demand for U.S. entertainment is vigorous and is likely to grow in the long run. Sales of U.S. entertainment both domestically and abroad will depend in part on how new technologies are used for the delivery of entertainment and the barriers that U.S. companies are likely to encounter in foreign markets, in addition to general economic conditions. New technologies include the Internet, DVD, and satellite delivery systems for programming. Many industry observers believe that within a decade the Internet will play a major role in delivering filmed entertainment to homes.
Motion Pictures and the Washington
Economy
Motion pictures in Washington employed 9,220 workers in 1998. Although motion pictures has a small employment base, this services sector has experienced robust growth over the last ten years. Since 1988, the motion pictures industry has grown at an average annual rate of 4.6 percent, compared to the statewide growth average of 2.9 percent. Such increases reflects growth in population as well as real increases in income and spending power.
Annual Change in Wage & Salary Employment of Washington
Total Nonfarm, Motion Pictures, and All Services, 1981-1998
Source: Washington Employment Security Department
For more detail of above graphic
Unlike the national industry, motion pictures in the state is dominated by the video tape rental places subsector, which accounts for over two-fifths of the sector’s total employment. In contrast, two-fifths of the national industry’s employment resides in motion picture production and distribution. Although volatile, motion picture production and distribution in Washington has been the fastest growing subsector during the last ten years. The other subsectors—movie theatres and video tape rental places—have experienced more consistent though slower growth.
Employment in Washington Motion Pictures Industry, 1988-1998
Source: Washington Employment Security Department
For more detail of above graphic
Motion pictures in Washington is largely composed of small companies. Similar to the state, 98 percent of all motion pictures establishments employ 100 or less workers. Yet, 53 percent of all motion pictures workers are found in establishments with 100 or more employees.
Size of Establishments of Washington Motion Pictures Industry,
1998
Source: Washington Employment Security Department
For more detail of above graphic
Note: Due to nondisclosure, information on employees for size category of 500+ employees is shown in the size category of 250-499 employees.
Average covered wages for motion pictures workers was $14,096 in 1998, nearly 60 percent below the statewide nonfarm average of $33,922. In 1997, motion pictures employees’ wages and salaries ranked at the bottom among all services, and substantially lower than the statewide services industry average at $35,966. Substantial wage growth has occurred in motion pictures production and distribution; between 1988 and 1998, real (i.e., without inflation) average wages and salaries increased by nearly two-thirds.
The distribution of hourly wages for motion pictures is dissimilar to the state, with a pronounced disposition toward lower hourly wages. Nearly three-fourths of all workers in the motion pictures industry earn $10 or less per hour, compared with 30 percent and 36 percent of all nonfarm workers and services workers in the state, respectively. In contrast, only 10 percent of motion pictures workers earn $20 or more; 28 percent and 25 percent of all nonfarm and services workers earn $20 or more.
Table 1
Real Average Wages for Washington Covered Motion Pictures
Workers, 1988-1998 (1998 dollars)
Sources: Washington Employment Security Department,
U.S. Bureau of Economic
Analysis
| Sector | 1988 |
1990 |
1992 |
1994 |
1995 |
1996 |
1997 |
1998 |
| Motion Picture Production & Distribution | ||||||||
$21,207 |
$20,644 |
$24,550 |
$27,654 |
$33,307 |
$35,576 |
$33,950 |
$35,094 |
|
| Motion Picture Theaters | ||||||||
$7,542 |
$7,660 |
$8,692 |
$7,780 |
$7,535 |
$7,417 |
$7,353 |
$7,637 |
|
| Video Tape Rental | ||||||||
$8,052 |
$8,574 |
$8,707 |
$8,854 |
$8,936 |
$9,088 |
$9,048 |
$9,153 |
|
| Total, Motion pictures | ||||||||
$9,795 |
$10,544 |
$11,536 |
$12,791 |
$13,227 |
$13,852 |
$13,526 |
$14,096 |
|
| Total Services | ||||||||
$21,420 |
$22,383 |
$25,617 |
$25,357 |
$26,490 |
$28,302 |
$30,653 |
$35,996 |
|
| Total Nonfarm | ||||||||
$27,244 |
$27,399 |
$29,012 |
$28,579 |
$29,046 |
$30,068 |
$31,504 |
$33,922 |
|
Hourly Wages for Washington Motion Pictures Workers, 1997
Source: Washington Employment Security Department
For more detail of above graphic
The labor force in the motion pictures sector is dominated by sales and service workers. Common sales and service occupations within this group are clerks and cashiers, fast food workers, ushers, and projectionists. Professional and technical occupations are also important in motion pictures.
Table 2
Occupational Profile of Motion Pictures Workers in Washington,
1998 and 2008
Source: Washington Employment Security Department
Estimated 1998 |
Projected 2008 |
|||
| Motion pictures, SIC 78 | Estimated Employment | Percent of Total Employment | Projected Employment | Percent of Total Employment |
| Managerial & administrative | 510 |
5.4% |
579 |
5.4% |
| Professional, paraprofessional & technical | 1,052 |
11.1% |
1,255 |
11.7% |
| Sales & related occupations | 4,572 |
48.3% |
5,009 |
46.8% |
| Clerical & administrative support | 373 |
3.9% |
404 |
3.8% |
| Service occupations | 2,014 |
21.3% |
2,521 |
23.6% |
| Production, operating & maintenance | 55 |
0.6% |
59 |
0.6% |
| Operators, helpers & laborers | 419 |
4.4% |
295 |
2.8% |
| Undefined occupations | 468 |
5.0% |
580 |
5.4% |
| TOTAL | 9,463 |
100.0% |
10,702 |
100.0% |
Contribution of Motion Pictures to the
Washington State Economy
Washington—as other states—have established film offices to promote the state for motion picture, television, and commercial production. These productions hire local cast and crew; rent, lease and/or buy goods and services; and add to the state’s economic prosperity with generated production spending. With over 2,000 hours a day of television programming to fill, along with the huge big-screen movie industry and the insatiable demand for commercials, there is a wide variety of films being produced today. With half of the 1,200 entries at the Sundance Film Festival now coming from outside Los Angeles and New York, film professionals are zooming in on Washington as choice locations.
Washington’s film office estimates that a single feature film can create an economic impact of $1 million to $6 million into the local community with 300-1,000 freelance cast and crew jobs created. Between 1992 and 1998, film studios and production crews have spent about $234 million in Washington. Production expenditures have declined by two-thirds since the 1994 peak to $23.1 million in 1998.
Film Production Expenditures in Washington, 1992-1998
(Millions
of 1998 dollars)
Source: Washington Film & Video Office
For more detail of above graphic
Compared to the nation, the relative importance of motion pictures to the Washington economy is low. Throughout the time period, the index of specialization for Washington motion pictures has remained well below 0.5 (an index of 1.0 signals the same importance of an industry for Washington as for the U.S.).
Index of Specialization for Washington Motion Pictures Industry,
1982-1997
Source: U.S. Bureau of Economic Analysis, Gross State Product series.
For more detail of above graphic
Outlook
Although motion pictures has outperformed the state economy since 1988, employment gains are expected to be relatively modest for the first two decades of the new century. By the year 2020, motion pictures are forecast to employ 11,139 workers, an average annual growth rate (2000-2020) of 0.7 percent. The bright sector in motion pictures is motion pictures production and distribution subsector, forecast to grow at an annual rate of 1.2 percent.
Washington Motion Pictures Wage & Salary Employment
Forecast,
2000-2020
Sources: Washington Office of Financial Management,
Washington Employment Security
Department
