Colorado could have a $1 billion-plus film industry with better incentives

Colorado’s film industry could surpass $1 billion in annual sales and grow into a nationally attractive scene for filmmakers if legislators can commit to offering more economic incentives, according to a study released by the state this week.

While Wyoming, New Mexico and Utah offer healthy incentives and production rebates that have made them popular filming locations for TV and movies, Colorado’s program has languished for years with little funding. That could change if the Colorado Office of Film, Television and Media had a bigger budget to offer prospective clients, according to the study.

“For more than a decade, Denver and Colorado’s filmmaking artists and professionals have been building growth and delivering a massive return to the city and state, despite considerable challenges,” said John Van Wyck, Cine Fe executive director and the study’s researcher. “This study shows what will become possible when we start investing time, attention and resources to help them grow.”

The state’s film incentive program currently offers a performance-based rebate for up to 20% of qualified expenses, according to the Office of Economic Development (COED). To receive a rebate, Colorado-based projects need to spend at least $100,000, while out-of-state projects are required to spend $1 million or more. Projects must employ a majority of Colorado residents in their crew and the spending must be audited.

“The incentive creates jobs for Coloradans and provides on average an 18-to-1 return on investment for the economy,” officials write on COED’s website. “The films also promote Colorado as a tourism destination.”

The program has come under fire from legislators in the past due to misallocation of funds and what some lawmakers argue is an ineffective and unaccountable system, The Denver Post has reported. Before the pandemic, the legislature was granting as little as $750,000 a year to the state’s film incentive fund, forcing the COED to shift money from other programs to keep the fund from completely collapsing and production crews disbanding because of a lack of work.

It was revived in late 2021, however, with a record $6 million boost. But that still makes it less than competitive with states that offer up to 30% in rebates or more, and that have budgets upwards of $100 million, such as New Mexico’s program.

“We wanted to hear directly from the filmmaking artists and professionals what their aspirations were and what challenges stood in the way, and then outline a path forward,” said former director of Colorado Creative Industries, Margaret Hunt, in a statement. “We found that this industry represents an incredible opportunity, both economically and culturally, and the industry’s success would benefit all Coloradans.”

The study found that between 2011 and 2019, employment in Colorado’s film industry grew at a rate of 43% — faster than the national film industry’s 30% growth, and faster than all Colorado employment growth (21%) during that time period.

However, “a lack of investment in infrastructure, support programs and incentives has made it difficult for members of Colorado’s film industry to grow their projects, companies and careers,” the study reported. “These challenges were exacerbated by the COVID-19 pandemic, which resulted in more job losses in Colorado’s film industry than in the industry nationally, underscoring both the need and opportunity for Denver and Colorado’s leaders to invest in Colorado filmmaking.”

Highlights include:

• Commercial video production is a bright spot, accounting for the majority of growth in Colorado’s film industry.
• Colorado’s film industry generated more than $1 billion in sales of goods and services, with Denver’s film industry accounting for about 79%, or $727.4 million, of that.
• As of 2019, more than 15,000 Coloradans worked in the film industry. Of those, more than 8,700 (or 55%) worked in the Denver metro area.

Regaining those is a challenge, the study said. The COVID-19 pandemic led to severe job and revenue losses in Colorado’s film industry at a greater percentage than both the national film industry and the state’s total job market, the authors wrote.

Between 2019 and 2021, Colorado’s film industry lost 4,092 jobs, and Denver’s film industry lost 2,200 jobs. That was a higher percentage than both the national film industry and the state’s total job market. Between 2019 and 2021, the Colorado film industry’s sales of goods and services fell 8.4%, from $1.04 billion to $960 million.

“A majority of interviewees told us how few jobs there were and how hard it was for them to grow their companies and careers,” said Michael Seman, assistant professor of arts management at Colorado State University and one of the study’s researchers. “At the same time, the economic data showed that despite those obstacles, Denver and Colorado filmmakers have nonetheless driven significant growth in employment and sales through their own ingenuity and creativity,” including freelancing or starting their own small companies.

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