Outsourcing in the Entertainment Industry

Like many industries, the entertainment industry is being affected by outsourcing, also known as ‘runaway production’. Because of government subsidies and lower production costs, film and T.V. production is moving outside of Hollywood and outside of the USA (James, 2012). This is making it so skilled craftsmen can’t make a living where they live, and need to move elsewhere and work for less money, or completely lose their jobs.  According to the 2001 report "Impact of the Migration of U.S. Film and Television Production". Department of Commerce Secretary Norman Mineta states, "Runaway film production' has affected thousands of US workers in industries ranging from computer graphic to construction workers and caterers. These losses threaten to disrupt important parts of a vital American industry." However, because the production is creating new jobs in these other countries, their economies are flourishing while ours is suffering.
Because movies are under pressure to wow their audiences with special effects that are better than other movies, the bar keeps going up, making costs much larger.  For example, the movie Aliens, produced in 1986, cost a total of $18 million, while a more recent movie with similar subject matter and special effects, Avatar, made in 2009, cost $237 million (IMDB.com). Sometimes movies don’t have a big enough budget to have workers located in their own country, requiring outsourcing. The governments of other countries make it less expensive to produce there than other places by offering subsidies. For example, Canada gives subsidies to movie studios that outsource their work there ("The Decline of Foreign Location Production in Canada"._. Another incentive to outsource to other countries is that labor is cheaper in these areas, due to the living expenses being much lower.  This allows companies to pay less to hire workers, keeping overall production costs lower and profits higher.
While runaway production is creating new jobs for other countries and strengthening their economy as well as helping studios to keep production costs lower, the true cost of outsourcing in the entertainment industry is that our economy suffers because of the loss of jobs and the weakening of this industry in our country.
Sources:
"Impact of the Migration of U.S. Film and Television Production". United States Department of Commerce. 2001. Retrieved 2014-3-4.
James, Kevin. Outsourcing Hollywood, Billions Leave Local Economy, Families
Separated.  Huffington Post.com. 2012.  Retrieved 2014-3-4.

"The Decline of Foreign Location Production in Canada". Government of Canada. 2005-05-24.