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Motion Picture Industry: United States
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There is concern in the motion picture industry over the number of films that are being made abroad. Tax breaks offered chiefly by English-speaking countries, especially Canada, have induced U.S. filmmakers to increasingly move the production of films to other countries. Production of many lower budget films, such as made-for-television movies, and commercials has been moved abroad to reduce production costs. In addition, more feature films are being made abroad, but mostly for artistic reasons. When a film’s production crew leaves, it takes with it large numbers of jobs that are filled at the site of the filming—most of the noncritical supporting actors and behind-the-scenes workers, caterers, drivers, and production assistants. To address this issue, several cities and States have initiated tax breaks and other incentives to encourage filmmakers to make movies in their locales.
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In 1966, the Production Code was abandoned completely and succeeded by the Motion Picture Code and Rating Program. Adopted to avoid a threatened state-controlled system, the program has characterized itself as providing guidance for parents, not for filmmakers. The program initially assigned each film one of four ratings: G (general audiences, without restrictions), M (mature audiences, parental guidance advised), R (restricted audiences, no one younger than 18 admitted without a parent or guardian), and X (no one younger than 18 admitted). The age limit may be adjusted by individual state rulings. M was eventually supplanted by PG (parental guidance suggested), PG-13, was introduced for films that might contain material inappropriate for pre-teenagers, and NC-17 replaced X, which had become associated with pornographic films.
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The motion picture industry in the United States is one of the most critical industries in terms of its contributions both to the economy and to culture. It enjoyed an all-time-high gross revenue of $64 billion in 2003. It is ... an example of a typical “experience product” market, characterized by product quality information asymmetry between firms and consumers. To help distinguish between sellers of high- and low-quality products before consumption, consumers in such markets look for credible information that firms can provide through the use “signals,” such as advertising expenditure, warranties, and brand names.
On July 20, 2007, Massachusetts enacted an Act Providing Incentives to the Motion Picture Industry (“the new Act”).  See St. 2007, c. 63.  This Act made revisions to statutory provisions enacted by a prior Act with the same title that was signed into law on November 23, 2005 (the “prior Act”).  See St. 2005, c. 158; amended by St. 2005, c. 167.  This Technical Information Release (TIR) discusses the statutory provisions as amended (collectively, the “Film Statute”), including an explanation of the provisions of the new Act and their effective dates.[1]
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The motion picture theatre industry comprises establishments primarily engaged in exhibiting motion pictures. This industry-based classification replaces the activity-based classification used in the past by the Culture Statistics Program. Some activity that had previously been excluded from the survey is now included, such as film festivals.
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Motion pictures in Washington employed 9,220 workers in 1998. Although motion pictures has a small employment base, this services sector has experienced robust growth over the last ten years. Since 1988, the motion pictures industry has grown at an average annual rate of 4.6 percent, compared to the statewide growth average of 2.9 percent. Such increases reflects growth in population as well as real increases in income and spending power.
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