MPA Report: Federal Film Incentive Could Double U.S. Production

The Motion Picture Association (MPA) released a report on Tuesday, March 12, 2024, projecting that the implementation of a federal film incentive by Congress could lead to a doubling of U.S. film and television production by the year 2032. This significant expansion is contingent upon the passage of legislation that would establish a federal tax credit for production activities.

The report, which was prepared by the independent consultancy Olsberg SPI, further estimates that a 20% federal tax credit would stimulate the creation of approximately 143,500 new production jobs annually. These jobs are anticipated to span various sectors within the film and television industry, including but not limited to, pre-production, principal photography, post-production, and related support services. The MPA is actively collaborating with a coalition of industry stakeholders to advocate for the adoption of this incentive.

The proposed federal incentive aims to bolster the competitiveness of the U.S. film and television industry on a global scale. Currently, many other countries offer substantial tax incentives to attract film and television productions, leading to a significant portion of U.S. productions being filmed abroad. The MPA's report suggests that a federal credit would help retain and attract productions within the United States, thereby preserving and growing domestic jobs and economic activity.

Olsberg SPI's analysis is based on economic modeling that considers various factors, including direct spending by production companies, indirect economic impacts through supply chains, and induced spending from employees. The projected doubling of production would represent a substantial increase in the economic footprint of the U.S. entertainment sector, contributing billions of dollars to the national economy. The MPA's advocacy efforts are focused on educating lawmakers about the economic benefits and job creation potential of such an incentive, drawing parallels to the success of state-level film incentives across the country.

The report underscores the critical role of government policy in supporting creative industries. By providing a predictable and competitive incentive structure, the U.S. can ensure its continued leadership in global film and television production, fostering innovation and employment within the sector. The MPA's call for a federal incentive is a strategic move to counter the growing trend of productions seeking more favorable financial environments internationally, aiming to secure the long-term health and growth of Hollywood and its associated industries.