‘Holy-wood” is Israel’s ticket to fame and fortune – or is it? A brilliant historian and dedicated public servant, deputy minister Michael Oren means to further Israel’s public image and economy through a plan to subsidize foreign movie productions in Israel.
In a Jerusalem Post interview, MK Oren states that he expects attracting major Hollywood productions will “break BDS [boycott, divestment and sanctions] and other attempts to delegitimize and isolate us.” Netta Koren, senior adviser to Oren, goes on to express what a positive role foreign filmmaking will play in burnishing Israel’s image internationally. “On a diplomatic level, this is a fantastic thing to do. Think of Israel’s bad reputation, but then an action film... shows Israel in a light that 90% of the world doesn’t see. You can imagine what a huge impact that’ll have,” said Koren.
Will it? In film and TV, the location is often less important than the setting. Gone with the Wind
, the iconic southern classic set in Georgia, was shot mostly in California.
The film which cemented Clint Eastwood’s status as an all-American star, the classic Western The Good, The Bad and The Ugly
, was actually filmed mostly in Spain. What was true in the earlier days of Hollywood remains true today – and even when the name of the city is in the title, that’s no guarantee that the film was shot there. Toronto, Canada, was the location for the 2002 musical Chicago, and Martin Scorsese’s Gangs of New York, which was set in a mid-1800s Big Apple, was actually shot in Italy.
To borrow a phrase, if a film is shot in Israel and no one knows it, does it advance Israel’s image? There are, of course, locales and sites which rise to prominence thanks to legendary film and TV productions.
A report prepared by consulting firm KPMG for Oren on the issue of film subsidies cites examples of remarkable tourism increases such as in New Zealand following The Hobbit
and Norway on the heels of Frozen
. However, these are undeniably the exceptions rather than the rule. When Hollywood churns out more than 500 films a year and the rest of the world produces a few times that number, the iconic productions are far outnumbered by the less memorable.
If there is a box office blockbuster shot in Israel which becomes a cultural reference point, Israel’s tourism could receive a boost. But how many of the well over a thousand movies produced every year achieve such renown? On the authority of the KPMG report, Oren goes on to claim that Israel will benefit economically from the movie subsidies. “Films will bring millions of dollars into the Israeli economy and create hundreds, maybe even thousands, of jobs,” said Oren.
The report, which had not been made public, claims that “every shekel of benefits given by the state creates economic activity worth three times as much.” They go on to claim that a NIS 7 million subsidy by the Israeli government (meaning, taxpayer money) would yield NIS 4m. in taxes and 160 full-time jobs. On the face of it, this claim raises lots of questions.
For a one-time investment, how long would the 160 full-time jobs last? If it really is the case that a government investment would yield such tax revenue and create so many full-time jobs, this would seem like an imperative investment. But this would belie the experience and analysis of others.
A recent article titled “Film Subsidies Are Real Losers” by A. Barton Hinkle in The Richmond Times-Dispatch
highlights a number of sources which cast a cloud of doubt over the profitability of such initiatives. A comprehensive report was issued just last month on this subject by the Joint Legislative Audit and Review Commission (JLARC ), a non-partisan governmental body created by the state of Virginia in the US and charged with analyzing, evaluating and overseeing state agencies, programs and policies.
The report on film subsidies found that the “incentives provide a low return in revenue to the state (20 cents per dollar invested for the tax credit and 30 cents per dollar for the grant)” and that the “tax credit and grant have a positive impact on Virginia’s economy...
but the impact is smaller than that of other economic development incentive programs.” In other words, there are better ways to invest taxpayer money.
The findings in Virginia are similar to those of other states in the US. Connecticut found a $0.07 return on every $1, Michigan $0.11 and New Mexico $0.14.
The conclusions of many states complement academic research on the topic. The conservative think tanks the Manhattan Institute and the Tax Foundation found film subsidies don’t pay for themselves or create long-term jobs. The progressive Center on Budget and Policy Priorities characterizes the subsidies as generous to movie producers at the expense of taxpayers: corporate welfare.
Leaving the economics aside, let’s return to the first and, for the Israelis who eagerly want to be accepted by their peers around the world, arguably the more important argument about Israel’s image. Oren stated that with the “Holywood” initiative, “We will put ‘made in Israel’ on countless screens around the world.”
Israel is, in fact, already doing that.
When this writer travels to New York City and gets in a cab, almost all of the drivers are navigating with Waze and about half of them know that Waze is Israeli. This is a product they interact with everyday, not a middling movie they watch once and that promptly fades from memory. From Mobileye, Wix and Lemonade Insurance to the USB flash drive and voicemail, there is a growing discovery of Israel through the technology and innovation Israel brings to the world. Whether high-tech, biotech, or fintech, “made in Israel” is increasingly on countless screens and minds around the world.
Foreign film and TV production subsidies may well help actors and producers from abroad better understand Israel, but their millions of viewers may not even know it was “made in Israel” – and if they do, it may not readily translate into travel packages and international support. Subsidies may create jobs, but big questions remain whether those are real, long-term jobs and at what price. And, if the Israeli government is acting as an investor for economic and diplomatic purposes, all options – not just the “Holywood” one – should be on the table.
Leave the fantasy for the big screen. Deputy minister Oren should widen his scope and consider other alternatives to advance the twin goals of securing Israel’s diplomatic and economic standing.
The author is the general manager of The Tikvah Fund in Israel. These views do not necessarily represent those of his employer.
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