Milken Institute Report Calls for Creation of ‘Media Cluster’ to Make Pittsburgh a Leading Entertainment-Media Hub

August 7, 2015

Regional Strategy Must Focus on Human Capital, Media Infrastructure and Statewide Incentives, Coordinated by Pittsburgh Film Office, for Metro to Compete at ‘Next Level’

PITTSBURGH – August 7, 2015 – (RealEstateRama) — For decades, Pittsburgh has thrived as a regional entertainment media center, and as the setting for popular movies and television shows including Silence of the Lambs, Batman and Mr. Rogers’Neighborhood. The metro area has seen a total film industry economic impact of $1 billion since the formation in 1990 of the Pittsburgh Film Office, which markets the southwestern Pennsylvania region to film and TV producers. But competition within the U.S. and from overseas challenges the city’s ability to attract movie and TV productions. Producers look for the right combination of local talent, infrastructure in the form of facilities and service providers, and financial incentives, when determining where to locate a project, be it a movie or a series.

According to “Strategies for Growing Pittsburgh’s Media Cluster,” released today by the Milken Institute, Pittsburgh already has a strong technology and media base that gives it a significant foundation to build on. But it needs a coordinated strategy to develop an entertainment and technology cluster that includes the best talent and an up-to-date media infrastructure in order to compete with cities such as Atlanta, New Orleans, Toronto, and even New York.

“Today, a metropolitan area must offer producers more than just low costs. A deep pool of skilled local talent, state-of-the-art soundstages and related facilities, and support services all are part of the package that filmmakers expect and require,” said Kevin Klowden, managing economist at the Milken Institute and coauthor of the report. “The experts we interviewed made it clear that sustained investment in retaining human capital and building infrastructure requires a stable commitment to film production incentives.”

Currently, Pennsylvania’s film production incentives are renewed annually, while many productions are budgeted on a five-year basis. The amount of money available through the incentive program is not consistent from year to year. These factors severely limit Pittsburgh’s ability to attract multi-year productions such as television shows. This issue, which affects the entire state, provides an opportunity for Pittsburgh stakeholders to unite and make their voices heard at the state level.

“With the success of the state’s film tax credit program, the amount of projects, new money, and jobs that come to the region each year has increased,” said Dawn Keezer, director of the Pittsburgh Film office. “The issue that we face now is that without Pennsylvania’s making a long-term commitment to the program of at least five years, there is too much uncertainty for long-term projects and new businesses to open in our region.”

The benefits of a strong media cluster can be directly found in how film productions impact the local economy. Using methodology from the U.S. Bureau of Economic Analysis, the Institute estimated that 107 new jobs are created for each $10 million spent on productions in the Pittsburgh metro. “For the entertainment industry in Pittsburgh, every dollar that is spent produces $1.27 for the overall economy,” said Klowden.

According to the report, entertainment is a very labor-intensive industry, with an employment multiplier effect of greater than 10, which is high when compared to industries such as computer systems design services (9.97), scientific research and development services (8.25), and oil and gas well drilling (6.57).

In its assessment of the Pittsburgh metro in entertainment media, the Milken Institute engaged producers, business owners and other decision makers, both in Pittsburgh and in Hollywood, to determine not only what Pittsburgh’s key comparative advantages are, but also what steps it must take to become home to a thriving cluster of media and related jobs. A cluster is essential, because it creates a critical mass of employers and skilled workers that provides both job and economic security. The Milken Institute report calls for the Pittsburgh Film Office to lead the creation of a stakeholder group to develop and advocate for a strategy to accomplish three main objectives:

Create and retain a skilled entertainment workforce. Unlike other cities, Pittsburgh does not need to develop new training programs for aspiring filmmakers, but instead must create a coordinated strategy to retain the graduates already produced locally. Pittsburgh’s workforce—both film crews and production service providers—enjoys a strong reputation in Hollywood. However, to attract and retain more skilled workers, a strong investment in the local infrastructure is needed to ensure that the workforce remains fully employed.
Invest in entertainment infrastructure. For Pittsburgh to consistently lure movie and television projects, it must have sufficient capacity to house and support a number of productions year-round, and not just when the weather is good. This means multiple soundstages and vendors to provide services throughout the productions. Although Pittsburgh has the core of this capacity, it pales in comparison to rivals. Purpose-built facilities would not only be vital in securing a steady flow of productions, but would also allow longstanding firms and new startups to cluster together and provide a broader economic impact for the entire metro.
Ensure political support and long-term commitment to film incentives. Sustained investment in retaining human capital and building infrastructure requires a stable commitment to film production incentives. This issue requires a concerted effort on the part of businesses, educational institutions and organizations, led by the Pittsburgh Film Office, to influence policy and restructure the incentives program so that production companies can anticipate costs in a reliable way.

“Highly regarded programs at Carnegie Mellon University, the University of Pittsburgh and Point Park University give Pittsburgh a significant advantage over many other centers of production,” said Klowden. “The goal of our report is to help the Pittsburgh Film Office, along with local universities and businesses, create a thriving entertainment media cluster. If Pittsburgh can present a strong clear vision for its media cluster over the next several years, it has a tremendous opportunity to thrive and grow to be truly world class.”

“Strategies for Growing Pittsburgh’s Media Cluster,” by Kevin Klowden, Kristen Harrisand Michael Lin, is available for download at no charge athttp://www.milkeninstitute.org/publications/view/730. The study was made possible with the support of The Heinz Endowments and the Benedum and Hillman foundations.

About the Milken Institute

The Milken Institute is a nonprofit, nonpartisan think tank determined to increase global prosperity by advancing collaborative solutions that widen access to capital, create jobs and improve health. It conducts data-driven research, convenes action-oriented meetings and promotes meaningful policy initiatives.
www.milkeninstitute.org
@milkeninstitute

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