Hollywood is fighting to stop an exodus of filmmakers who are being lured from Southern California by subsidies and tax breaks.

Labour unions, studios and independent producers are urging California lawmakers to support tax credits for local production, after a bill sponsored last year by Assembly Speaker Fabian Nzqez failed to pass the state legislature.

The group wants California to match incentives being offered by more than 20 other states. Countries from Iceland to Chile also are chipping away at Los Angeles film and television production, the county's third-largest industry. Feature shoots have fallen 32 percent since 1996, according to Film L.A., a non-profit group that arranges local film permits.

Until recently, Los Angeles unions and politicians focused their concern on Canada, where a favourable exchange rate and government incentives helped attract scores of movie projects. As the Canadian dollar has risen and made location shoots less of a bargain, filmmakers have turned to other sites.

"Just as New York would never let Wall Street leave the city, we can't let the film industry leave Los Angeles," said Los Angeles City Councilwoman Wendy Greuel, 44, who is seeking to eliminate fees for filming on city property.

It's a big target for other states. Spending on film-industry payroll and purchases in California was $34.3-billion (U.S.) in 2002, 60 percent of the U.S. total of $56.6-billion, in the most recent figures from the Washington-based Motion Picture Association of America.

The number of days spent shooting movies, television shows and commercials in Los Angeles rose 4 percent last year, according to Film L.A. That compares with a 35 percent increase in New York City, after passage of laws in 2004 that refund filmmakers as much as 15 percent of production costs for crew and equipment. The city also offers free permits, parking and police on location.

Cities including New York, where Warner Bros. this year filmed the pilot TV episode of The Traveler, are courting producers more aggressively.

"It wouldn't have been worth it" two years ago, said Lisa Rawlins, vice-president of studio and production affairs at the Warner unit of New York-based Time Warner Inc., the world's biggest media company. "Pilots are always shot economically."

One challenge for the industry is to convince legislators from other parts of California that subsidies aren't a handout. Retaining production will provide economic benefits to the entire state, said Amy Lemisch, director of the California Film Commission, a state agency spearheading the lobbying.

A feature film with a $17-million budget generates about $1.8-million in sales and income tax for the state, the Los Angeles County Economic Development Corp. estimates.Film, TV and commercial production provides jobs for 241,000 people in Los Angeles County, including camera operators, drivers, carpenters and makeup artists. The industry trails only tourism and international trade, according to Los Angeles County Economic Development. Including music, the county has about 30 percent of all U.S. entertainment employment, with New York second at 10 percent.

New Mexico offered tax breaks, cheap hotel rates and a $7-million loan to lure the 2004 romantic comedy Elvis Has Left the Building, said Bob Darwell, 42, a Los Angeles entertainment lawyer who helped Capitol Films arrange the financing.Louisiana offers a transferable 25 percent tax credit on money spent in the state. As most filmmakers aren't based there, they sell the credit to a broker who resells it to a Louisiana company. The state also offers a 10 percent credit on salaries paid to Louisiana residents and a 4 percent sales- and use-tax exclusion that reduces the cost of equipment purchases.

"We have a very simple incentive package that can save 12 percent of the production's cost, we have trained crews that speak English, and if we don't have a piece of equipment, we guarantee that it'll be there in 24 hours," said Einar Tomasson, project manager of the Film in Iceland Agency, in an interview this month at a conference in Santa Monica, California, that also drew film commissioners from as far away as Chile and Australia.

The California Senate last year failed to vote on a bill by Nzqez, a Democrat representing central Los Angeles that would have provided tax incentives for local movie production.

Rather than trying to get the incentives passed as a standalone bill, Nzqez will seek to include them in next year's budget, said his spokesman, Richard Stapler. Budget negotiations for the fiscal year starting July 1 will begin next month.

"We get a lot of input from groups and individuals in the industry to keep this a front-burner issue for us," Stapler said.

 By Anjana Pasricha
New Delhi
17 January 2009
   
Hollywood studio Warner Brothers has made its first foray into film production in India with the release of a Hindi film, Chandni Chowk to China. Several big Hollywood studios are investing in India to tap the huge movie business in the country. The Hindi film Chandni Chowk to China, which was released Friday in nearly 30 countries, is the story of a simple, bumbling cook living in the crowded alleys of Delhi who is mistaken for the reincarnation of a Chinese warrior.The story is quintessentially Bollywood - the name popularly used for the Hindi film industry based in Mumbai.

The film is packed with breathtaking action, spectacular locations, bouts of laughter and heart stirring emotions which appeal to Indian audiences. It has a cast of top Bollywood stars.But there is a difference. It is the first Hindi film co-produced by Hollywood studio, Warner Brothers.Warner Brothers is among several Hollywood studios which have begun entering into joint ventures with Indian production houses.They are eyeing the huge movie audiences in a country of over one billion people, where watching Bollywood films is a passion which transcends its ethnic and linguistic divide. One of the producers of Chandni Chowk to China, Rohan Sippy, says India represents one of the world's big movie markets.   

"This is the one market which is a successful cinema market in the world, so they would obviously like to be a part of it," he said. "We have got a great cinema culture, we have loyal audiences, and great filmmakers of many, many years, it is such a prominent part of our culture, it is very healthy and vibrant, and hopefully will sustain for a long time to come."Hindi films do good business not just in India. They are also popular in other Asian countries, and with Indians living overseas.From left to right, actress Deepika Padukone, Warner Bros. President Alan Horn, and actor Akshay Kumar arrive at a screening of 'Chandni Chowk To China' in Burbank, California, 7 Jan. 2009From left to right, actress Deepika Padukone, Warner Bros. President Alan Horn, and actor Akshay Kumar arrive at a screening of 'Chandni Chowk To China' in Burbank, California, 7 Jan. 2009Warner Brothers plans to produce six more Hindi films in the next few years. Like Chandni Chowk to China, these films will be based on Indian stories, and be locally produced.

Film producer, Rohan Sippy, says it is important that the films appeal to an Indian audience. "Most important whoever is working on it, we must satisfy an Indian audience first, that is always the priority when we are making Hindi films, and then if we can extend that beyond to new markets that expand, that's wonderful," he said.For Hollywood studios the investment in India is relatively small. Bollywood productions are modest by Hollywood standards - the $15 million budget of Chandni Chowk to China is considered lavish in India.Warner Brothers is not the only Hollywood studio to invest in India. Sony Pictures, Walt Disney, and Paramount Pictures are also collaborating in film production in India.

Internet users would have their connections terminated summarily on the whim of the film and TV industry should it win its landmark legal battle against iiNet, legal experts have warned.

Seven of the world's biggest film studios and the Seven Network last week filed suit against iiNet, Australia's third largest ISP, in the Federal Court. They claim iiNet authorised copyright infringement by failing to prevent its users from downloading pirated movies and TV shows.

iiNet, and the industry body, the Internet Industry Association, say ISPs should not be required to take action against any customers until they have been found guilty of an offence by the courts. ISPs argue that, like Australia Post with letters, they are just providing a service and should not be forced to become copyright police.

Conversely, the TV and movie industry want ISPs to disconnect people it has identified as repeat infringers. There would be no involvement from police or the courts and the industry would simply provide the IP addresses of users they believe to be illegal downloaders. "To shift the burden of proof and require that ISPs terminate access to users upon mere allegations of infringement would be incredibly harmful to individual internet users in Australia," the online users lobby group Electronic Frontiers Australia said.

"Every citizen has a right of due process under the law and, when faced with having their internet service terminated, every citizen has the right to ask that the case against them be proven first."

The iiNet case is similar to the one the music industry brought against the Kazaa file sharing service in 2002, which ended in 2006 with Kazaa's owners handing over $100 million in damages. Additionally, in 2005, Stephen Cooper, the owner of MP3s4free.net, and the website's host, E-Talk Communications, were successfully sued by the music industry for infringing copyright by publishing hyperlinks to sites that contained illegal music.

But Weatherall said both cases were different because they showed a clear knowledge and encouragement of copyright infringement, whereas iiNet simply provides the internet connection and is in no way directly involved with illegal downloading.

Further, the Copyright Act and safe harbour provisions introduced with the US free-trade agreement provide some immunity for ISPs when it comes to the actions of their users. Nic Suzor, an Australian lawyer doing his PhD at the Queensland University of Technology and vice-chairman of EFA, said internet users would face "substantial hardship" if iiNet lost the case.

"ISPs will be terrified of being sued, and will likely disconnect individual users without taking the care to determine the merits of allegations of copyright holders," he said. "There will be no court processes, so individual users will have no ability to contest the allegations, short of suing their service providers. There will be no court processes, so the media will not fully report on the issues, and a lot of the injustices will go unnoticed." John Linton, CEO of the small ISP Exetel, said legal action by copyright holders was "inevitable" and the movie industry's strategy was to "take one or more smaller ISPs to court to test the provisions of the current newer clauses in the Copyright Act".

Unlike iiNet, Exetel forwards infringement complaints from the movie industry to its customers. Linton said iiNet brought the legal action on itself by failing to play ball. Peter Coroneos, chief executive of the Internet Industry Association, said the impending court battle would be "a very important test case for the internet industry in Australia".

The IIA board will meet on Wednesday to discuss a response to the case, which will be before the court on December 17.

It will be very interesting to see how this all plays out!!!