For his next film - a $70 million comedy - director Harold Ramis wants to shoot in the back lots and sound stages that made 1Hollywood famous. But in hope of saving $5 million, his production company may decide to shoot in London.
"There are other considerations besides financial ones to shoot in London: scene painters, set designers, etc.," says Mr. Ramis, who directed "Groundhog Day." "But 5 million bucks is 5 million bucks. The savings is definitely a consideration."
Because of the lure of small savings like this - just over 7 percent - an increasing number of feature films are being made outside of southern California. That has Hollywood in a quandary over the future of one of California's key industries, one which had a major impact on the state's recent economic comeback.
According to two studies released this month, activity by film crews during the prime shooting months of September and October fell by 25 percent and 18 percent from a year ago. Television production, including commercials, also was down considerably.
"After what we've seen for the past few years, this is a very significant slowdown," says Jack Kyser, director of the Los Angeles Economic Development Corp., which did one of the studies. This year, the industry added only 3,000 jobs compared with 18,000 on average for the last five years.
Mr. Kyser and others see a whole host of warning signs they believe state officials and motion-picture makers should be concerned about.
The burgeoning number of networks and cable-television programs is fracturing production, forcing producers to work on smaller profit margins and move to low-cost states. Major studios are making fewer films knowing a larger number of them are not profitable.
The Asian economic crisis - boosting the US dollar - has made it cheaper to film abroad, says Cody Cluff, head of the Entertainment Industry Development Corp., which released the second study.
"This eventually will begin to affect the ability of American filmmakers to find financing," says Mr. Cluff.
For now, state officials are redoubling efforts to keep production in California, including streamlining permits, getting help with location shoots, talking to guilds and unions, and trying for government incentives.
When productions stay in state, money does too - about $100,000 a day, which adds three times that amount to the local economy by trickling down to industry-related firms such as costumemakers, set-designers, hotels, and restaurants.
"This is basically forcing us to raise our game," says Patti Stolkin Archuletta, director of the California Film Commission. "There is no question that lower-cost production in Canada, Australia, New Zealand, and Europe is beginning to erode our base in California. We are looking at everything we can to make California more user-friendly."
At the same time, Ms. Archuletta and others think the falling figures need to be kept in perspective. Worldwide, the industry brings in $40 billion a year; California's share of that is $27 billion.
"We still have over 75 percent of film production," says Archuletta. "But you can't stop because you're the biggest. We've got to stop this before it gets out of hand."