FILM PRODUCTION IN L.A. DIPS 5 PERCENT AS TV INCREASES PRESENCE, CANADA LURES MOVIES AWAY.

Byline: GREG HERNANDEZ Staff Writer

Despite high-profile feature films like ``Spider-Man 3'' filming in Los Angeles this fall, location production in the region dropped by 5 percent in the third quarter, according to a report from FilmL.A. to be released today.

But television production, boosted by such locally produced shows as ``Ugly Betty,'' ``Entourage'' and ``Weeds,'' was up 15.5 percent. Overall, location shooting for the quarter is up 7 percent, which includes a slight rise in commercials.

``I think it's the ebbs and flows that we can expect but it is troublesome because these are the big job generators and the big tax revenue generators for state and local governments,'' said Jack Kyser, chief economist for the Los Angeles Economic Development Corp. ``We are being hurt by Canada again as a favorite location for feature film production. They had sort of waned but now they're waxing again.''

In all, third-quarter permitted production days were at 9,930 days, compared to 9,262 days 12 months earlier. This reverses a 7 percent year-to-year loss during the 2006 second quarter.

The report from the private nonprofit FilmL.A. states that feature films accounted for a total of 2,423 permitted production days during the quarter, compared to the 2,559 days recorded during the 2005 third quarter. Both figures are far below the area's peak in 1996, when 3,580 permitted days were recorded during the quarter.

In addition to ``Spider-Man 3,'' other features shot were ``Transformers: Prime Directive'' and ``Live Free or Die Hard.''

After a peak 10 years ago, feature film activity declined for seven consecutive years in L.A. as Canada, Australia and other countries offered attractive tax incentives and lured many productions away. In recent years, rival states including New York, Louisiana and Florida have made similar efforts to attract projects.

Of real concern is that for the first nine months of 2006, feature production days have been down each quarter in year-to-year comparisons and currently stand at 6,755 days year-to-date versus 7,438 days in the first three quarters of 2005.

``Television is helping the overall production numbers but the next layer down, features and commercials, are down overall so far compared to last year,'' said FilmL.A. President Steve MacDonald. ``I believe it is the fact that the talent and infrastructure for television is still largely here so that plays as an advantage in. But the fear is it won't remain that way long-term if budgets tighten and states continue to offer these incentives. TV shows will start taking advantage of the same incentives that feature films have ... for years now.''

Despite having a movie star governor in Arnold Schwarzenegger, Sacramento has not been able to gather up any state tax incentive for small-budget feature film productions.

TV production days jumped to 5,833 from 5,049 days in the same period last year. Dramas accounted for 36 percent but reality shows led with more than 41 production of all on-location television activity.

Among the other shows currently filmed locally are new network dramas ``Jericho'' and ``The Nine'' as well as the returning cable show ``Sleeper Cell.''

``All of these productions provide work and steady paychecks for local crews,'' MacDonald said.

greg.hernandez(at)dailynews.com

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