AICP survey: $3.5 BB for production; L.A. still biggest U.S. spot center

Everyone knows the commercial production industry is big, but how big didn’t hit home until the new AICP survey spotlighted its immense size.

According to the survey, direct production expenditures were a massive $3.5 billion. When factoring in additional expenditures, including talent and post, the total impact climbs to $5.5 billion.

What makes this number so astounding is that expenditures were reported by AICP’s approximately 250 general members and 250 associate members, a relatively small but elite and powerful group. It’s said that the general members account for 85% of all network television commercials.

L.A.-based Goodwin Simon Strategic Research conducted the survey over the direct expenditure period of July 1, 2002 to June 30, 2003. Its purpose was to provide a benchmark to measure the performance of future production.

Of the $3.5 billion, roughly $2.7 billion was spent on U.S. production. About $768 million was spent on overseas production. One in four shoot days, or 22%, took place outside the U.S. Canada continues to prevail as the most popular non-U.S. location of choice.

“There were no big surprises in the overseas numbers,” commented national AICP chairman Mark Androw of Chicago-based The Story Companies. “Advertisers go out of the country primarily to save on talent costs, and to a smaller extent, to save production costs. The other reason is going to the Southern Hemisphere in winter for the seasons.”

Vancouver accounted for 28% and Toronto 19% of overseas shooting days. Other shooting days by AICP members were Latin America, 11%; Australia/New Zealand, 9%; Central and Eastern Europe, 8%; the United Kingdom, 7%, and South Africa, 6%.

On the home front, Southern California is both the U.S. and the world’s busiest production center with 46% of domestic and 36% of all shooting. New York was next, with 23% of domestic production and 16% of all shoot days. Twenty-five percent of domestic production takes place outside of the major production centers of Southern California, New York, Chicago and Florida.

Other revelations: Seventy percent of shoot days are filmed on location … Agency late payments have become a serious problem, as 57% reported final payments were late and 44% noted an increase in the number of payment delays … 82% of bigger companies and 63% of California houses were far more likely to participate in domestic production incentive programs.

Extra. Chicago is the second largest advertising market in North America with an estimated $17.5 million in billings. Local agencies spend an estimated $450-500 million on spot production.

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