The Motion Picture Association (MPA) released a significant report on Tuesday, projecting that U.S. film and television production could potentially double by 2032 if Congress enacts a federal film incentive. This study, prepared by Olsberg SPI, outlines the immense benefits the industry could reap from a proposed 20% federal tax credit.
Economic Impact and Job Creation
According to the report, a federal incentive could lead to the creation of approximately 143,500 production jobs each year, revitalizing the domestic industry that has faced ongoing challenges. Spending on film and television production could rise from $16.9 billion to an estimated $34.7 billion by 2032 with the implementation of this incentive.
Government Support and Legislative Momentum
The MPA is collaborating with a coalition of Hollywood unions to advocate for this tax incentive, aimed at enhancing domestic filmmaking opportunities. The proposal recently gained traction after receiving an endorsement from former President Trump last month, leading to increased attention within Congress. A bill is anticipated to be introduced by the end of this month.
Long-Term Production Growth
The Olsberg report—a culmination of several months of research—highlights the potential for an additional $125.3 billion in cumulative production activity from 2027 to 2035, resulting in a total economic impact of $249.1 billion over that period. Charles Rivkin, CEO of the MPA, emphasized the transformative potential of a federal incentive, stating, “This study tells us that we can bring more opportunities to life for people in all 50 states who bring great stories to life— the casts and crews, the set builders, construction workers, truck drivers, caterers, and more.”
U.S. Market Share at Risk
The report posits that the U.S. currently holds 34% of the global film production market and 42% of television production. However, without a federal incentive, these figures are projected to plummet to 25% and 29% respectively by 2035. Conversely, with the implementation of the incentive, the U.S. market share could soar to 65%, based on historical data indicating that a significant proportion of films have been produced domestically.
Competitiveness of U.S. Productions
The MPA study analyzed 20 films produced by member companies and found that a 20% tax credit would make 16 of them competitive for production in the U.S. as opposed to foreign locations, suggesting a promising increase in domestic film projects.
Global Competition and Future Considerations
In recent years, the number of national, state, and provincial incentives worldwide has surged from 86 in 2017 to 121 today, with new production hubs emerging in countries such as Ireland, Australia, South Africa, Eastern Europe, and South Korea. The Olsberg report assumes that external factors remain static and does not predict whether other countries might respond to a U.S. tax credit by enhancing their own incentives.
It is important to note that the study refrains from estimating the economic return per dollar invested in this proposed tax incentive, largely due to the incomplete details of the proposal. The measure will proceed to the Joint Committee on Taxation for an evaluation that will assess the financial implications for U.S. taxpayers.
Pictured: Charles Rivkin, chairman and CEO of the Motion Picture Association
