How has the Film Industry affected the economy and how has COVID-19 played a role in it?

How has the Film Industry affected the economy and how has COVID-19 played a role in it?

Written by: Gavin Long 

Many of you or I'm sure all of you have been to a movie theater or seen a movie inside of a theater at some point in your life. When you go to the movie theater it’s quite an experience. You go up to the counter, buy your tickets from the employee, get your snacks from the food service people And go and sit down and enjoy your movie. However in 2020 and 2021 this experience was taken away from us due to COVID-19. And like we studied in class, this was considered a recession. Prior to the COVID-19 pandemic, movie theaters and Hollywood contributed $504 billion to the U.S. GDP or 3.2% of the goods and services portion of GDP. This overall is a major reason why the Film Industry has affected the economy and the Film Industry has contributed a decent amount to total GDP

Here is a visual image of the Film Industry before COVID-19 and what happened during the pandemic recession. 

However something important to note is that when other countries produce a film that it does not count towards the U.S. GDP. A film can only count towards GDP if it is American produced. 

Furthermore, another reason why the Film Industry has affected the economy is because of positive externalities. Movies are filmed in many different locations of the world. For example, Harry Potter, a very popular film franchise, was filmed in the United Kingdom and Ireland. The positive externality of filming in those locations is that both of those locations have increased tourism by 50%. Also, some towns inside of the UK and Ireland have increased tourism as much as 200%. This is a positive externality because now those towns have more people going there and they have currency to spend. If they were to spend then that would contribute to the GDP. 

Overall these are just a couple of ways the Film Industry can impact the U.S. Economy. Through contributing to GDP and increasing tourism which is a positive externality, the Film Industry has a lot to offer for the economy even though it lost some revenue due to COVID-19. Do you think that the Film Industry has contributed a lot to the economy?

Works Cited 

 Name. “Popular Movies Can Increase Tourism to the Film's Location between 25%-300%.” Champion Traveler, https://championtraveler.com/news/popular-movies-can-increase-tourism-to-the-films-location-between-25-300/. 

Norah, Laurence. “The Top Harry Potter Filming Locations in the UK.” Finding the Universe, 8 Dec. 2021, https://www.findingtheuniverse.com/harry-potter-filming-locations-uk/. 

Rosal, Mel-Leo. “U.S. Film Industry Statistics [2022]: Facts about the U.S. Film Industry.” Zippia, Zippia, 11 May 2022, https://www.zippia.com/advice/us-film-industry-statistics/.