Sharp decline in TV production is no laughing matter for L.A.

As if on cue, the recent report showing a 23 percent decline in TV pilot production for 2006 elicited collective hand wringing from local officials and studio types. They pointed to a familiar villain--regulatory and tax breaks from other locations.

"Aggressive incentives from other jurisdictions have now succeeded in attracting almost a third of the season's pilot productions," said Steve MacDonald, president of FilmL.A. Inc., the nonprofit organization that handles production permits and promotes local filming. "Without a significant response, we're not likely to retain a majority share for much longer."

But in the competitive TV programming business, market forces--not government incentives--wield supreme power, and right now the pilot market has turned away from Los Angeles. The FilmL.A. report bears out the marginal influence of governments, showing that while L.A. lost pilots, more were filmed in New York--a city hardly known for regulatory laxity.

From a "program manufacturing" perspective, what resources does Los Angeles possess that give it an advantage over other venues? It has a large pool of skilled writers and performers, sophisticated technical infrastructure and access to large-scale distribution channels. Those factors are critical for scripted dramas and situation comedies.

But the industry hasn't produced a breakout sitcom hit since the turn of the millennium. "That '70s Show" began in 1998, and "Malcolm in the Middle" debuted in 1999. Both shows aired their final episode last month. Soon the sitcom may go the way of the western, the dramatic anthology and the musical variety show.

All those genres require a combination of resources that Hollywood can supply, but the new reality and documentary formats have democratized TV production, making it economical to produce a show almost anywhere. Cheap video technology and lack of a strong union tradition in those genres further free these shows from a specific location. Many of them positively boast of their non-Hollywood origins, i.e., "Survivor: Exotic Location."

Additionally, the focus on L.A.'s declining share of the pilot marketplace ignores the growing size of the TV pie. According to the FilmL.A. report, production companies spent $370 million on pilots this year, of which Los Angeles garnered $216 million. In the old days of three major broadcast networks, it's doubtful they ever spent that much on pilots, even in inflation-adjusted dollars.

By FilmL.A.'s own calculations, the total number of TV production days (not just pilots) in Los Angeles has nearly tripled since 1994. That kind of growth comes from the strength of the market, not incremental bureaucratic shifts. Los Angeles still hosts more than half of new shows--a notable achievement--and if the industry can retrofit or invent a popular TV genre that plays to L.A.'s strengths, that percentage will only grow.