Commercial production continues to suffer from post-strike malaise. (Up Front).

L.A.'s commercial production industry has yet to recover from the actors strike that shut down filming two years ago and may have caused permanent damage by shifting more filming overseas.

Commercial production is down 6.2 percent for the first seven months of the year, compared with the like period a year earlier, according to the Entertainment Industry Development Corp.

Those figures come despite national data indicating that after more than two years, the advertising industry slump might be showing signs of coming back.

"There was a trend toward global production, and the strike exacerbated that trend significantly," said Steve Caplan, a senior vice president with the Association of Independent Commercial Producers.

From January through the end of July, there were 3,370 commercial shooting days in Los Angeles County, 224 fewer than for the like period a year ago, although filming picked up somewhat during the summer.

Production is down 18 percent compared with the like seven-month period in 1999, prior to the actors' strike, which lasted from May to October of 2000.

The figures are more striking since all other types of production, including motion pictures, television and music videos, are off less than 2 percent from 1999 levels--and the latest national figures show spending for all types of media advertising was off only 0.2 percent for the first six months of the year.

And two longtime talent agencies representing commercial actors--DDK Talent Representatives and Abrams-Rubaloff & Lawrence--are closing their ad operations because of a slowdown in the local commercial advertising business they trace to the actors' strike.

Getting around strike

Gary Rose, an executive producer at Moxie Pictures Inc., a Hollywood commercial production company, said that while the effects of the recession and the terrorist attacks should not be underestimated, overseas filming got a big boost from the strike.

"At the time the strike happened it was very difficult for producers to shoot statewide," he said. "You would have picketing actors. It was crazy. Producers were forced to look at other places to shoot," he said.

What they found were adequately trained actors, as well as a burgeoning production industry, that has made great strides in Canada, Australia, South Africa and Eastern Europe.

"There is a pretty good talent pool, good enough to turn and smile at the camera, holding a cup of tea," he said. "And the production communities all over the world have become far more sophisticated and their crews deeper."

The higher cost of air travel is more than made up by favorable exchange rates, far cheaper labor and even less expensive hotels and meal costs than Los Angeles or other U.S. locales.

Rich Carter, owner of Gartner, a Santa Monica commercial production house, said overseas production now accounts for 30 percent of his business, compared with 10 percent prior to the strike, which at the time was largely done for creative reasons, such as to capture a landscape.

Advertisers, said Carter, have determined that certain commercials involving little or no dialogue are not worth shooting in the United States, where actors' fees and residuals represent a large portion of their costs.

Carter estimates that advertisers can save 25 cents on the dollar by using non-union talent in foreign countries.

"It doesn't take too much to figure you can either put that money into production or buy more media," said Carter, who dislikes the phenomena but says it is now a part of the production business. "The companies that have figured out how to produce overseas are doing well. Companies have offices and associates across the globe."

Ilyanne Kichaven, the spokeswoman for the Screen Actors Guild, which participated in the strike along with the American Federation of Television and Radio Artists, said the strike clearly caused producers to use non-union actors, but she believes that is a trend that will not hold up.

"Anecdotally, we were told that many of the commercials that were shot during the strike without union talent were canned and re-shot with union talent," she said. "The reason that people go to the Screen Actors Guild is to hire professional people who are able to do a job in a professional manner."

Vendors affected

Rufus Burnham, owner of The Camera House, a North Hollywood camera rental company, said runaway commercial productions over the past two to three years have hurt local vendors that supply equipment. Burnham said he has had to slash fees to hold on to business.

"The price cutting is happening in such a brutal manner. There is just so little work compared to what there was two or three years ago. It's take what you can get," he said.

Despite increased use of non-union commercial actors overseas, SAG data shows that the earnings of commercial actors made a slight comeback last year. Earnings were $563 million in 2001, up from $531 million in 2000 but still down from $630 million, pre-strike levels in 1999.

Commercial actors won an increase in their residuals from cable television, as well as a hike in their up-front fees, but Kichaven said the earnings hike is also due to increased filming.

Rick Colby, president of Colby & Partners, a Santa Monica advertising agency, whose clients include American Suzuki Motor Corp. and Wherehouse Records, said advertisers who once went overseas for creative reasons might now be thinking dollars.

"We have shot several commercials outside the country," he said. "In many cases you just shoot outside because you are getting a different look, but it now may be a money issue.

The EIDC and others have tried to counter the problem of runaway production through legislative efforts, but a bill that would have granted state tax credits to companies that keep at least half their production in California was defeated last month in Sacramento over state budgetary concerns.

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