FEATURE - California pays to lure filmmakers back to Hollywood

By Dan Whitcomb

LOS ANGELES (Reuters) - After a decade of watching film production slowly abandon Hollywood, lured away by financial incentives first in Canada, then other U.S. states, California hopes to woo the movies back home.

But some worry that it might be too little, too late after the number of studio feature films shot in California has dropped to less than half of what it was in 2003.

Broadcast and cable television and commercial shoots, which had been more likely than feature films to stay in Hollywood in recent years, are also down significantly, with 44 of 103 pilot episodes shot outside southern California this year.

"In 2008 the worst numbers ever were recorded and the first six months of 2009 show a 50 percent drop from that. That can only be described as a disaster," said Paul Audley, president of FilmLA, the non-profit organization which coordinates film, TV and commercial production in and around Los Angeles.

Film production and its attendant industries generate $38 billion for California's economy and employ nearly 250,000 people, according to Governor Arnold Schwarzenegger's office.

Although it contributes less than 3 percent of state output, movie making also adds value to the tourism and entertainment industries.

Schwarzenegger, former star of "Terminator" who has championed the fight against runaway film production, in February approved California's first-ever incentives. The package is targeted at movies most likely to leave the state and includes a 20 to 25 percent tax credit.