Hollywood — Is it the final frontier for a production company?
Is Hollywood still the Mecca of Film Production?
“Everyone who is doing anything in Entertainment is living in Hollywood! Shouldn’t I be there too?!” For the last ten years, as I’ve traveled abroad meeting with filmmakers outside of Los Angeles, I get this statement and question almost every time. Followed by, “How important do you think it is for filmmakers to be in Hollywood?” Let me just tell you that, when choosing where to locate a production company, the default location does not have to be “Hollywood.”
There are plenty of places outside of Los Angeles with access to funding, production equipment houses, generous tax rebate programs and expertise — Louisiana, Georgia, New York, Ohio, New Mexico and Minnesota (believe it or not), among others. However, before deciding on any of these states, filmmakers should start with a far more significant and fundamental question:
Where can we maximize our profits and keep operation costs low?
My company and I personally have advised many filmmakers and production companies, especially outside of Hollywood, that revenue streams and lower operating costs are far more important than funding. If you plan on shooting scripts that do not require specific terrain for the location, then does it matter if you are in Hollywood or not? With quality productions and profitability as the primary goal, your business plan determines the location-not the reverse.
A secondary concern is getting access to great talent, experienced crew and seasoned producers in the industry. Remember, we live in a virtual world, and the type of required expertise can often be tapped no matter where you’re located.
Seeking access to investors and financiers may also send people to Los Angeles. This high-demand and high net worth individual, however, is scarce everywhere — , especially in Hollywood. Los Angeles based Investors are constantly badgered and pitched to by filmmakers. Unless your production company business model specifically puts you there, it makes no sense to be in a saturated hub where everyone is looking for the same thing. And although you won’t find talent just sitting around waiting for you, it is available in other places. Investors and talent can be found outside of Hollywood, and you may be able to secure funding at a lower ROI percentage and attach talent at a lower cost. You’re also likely to find more loyalty outside of the oversaturated hub where everyone is trying to recruit away everyone else’s talent.
Cost of living cannot be dismissed, either, especially for the production company that is minimally compensated in return for a stake of what they hope will be the next big blockbuster movie. While I’m not suggesting locating a company on the outskirts of Dodge to take advantage of inexpensive living, if there is no gripping reason to locate to a swollen market for workspace and overpriced housing, then why give in?
The final part of the location equation is funding. My advice to filmmakers always is that they shouldn’t want just any money — they should want strategic and smart money — that means people who will give you complete autonomy and not expect a huge and largely unreasonable ROI. The best funding comes with great passion, belief in your efforts and partnership. Know your investors and put a great deal of effort into making a viable distribution plan that will translate into a solid return on investment for your investor and you.
There are more and more investors who are now willing to give film investments a serious consideration now in this Bull Economy, so much more than ever.
For production companies, the location decision should be based on many factors, rather than default to the glitzy and glamorous, Hollywood.
© Gena Vazquez 2019
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