The Statewide Effort to Turn Filmmaking into Hawai‘i’s Next $1 Billion Industry

Hawai‘i’s ocean, jungles and mountains have served as backdrops for Elvis’ beach parties, Spielberg’s dinosaurs, crime sagas and love stories.

The pace of offshore productions accelerated in 2006 when the state’s Act 88 expanded financial incentives to lure big-budget productions, and has rarely let up. “We had tremendous years in 2018 and 2019, each averaging over $400 million” in direct spending, says Georja Skinner, head of the Creative Industries Division of the state Department of Business, Economic Development and Tourism. In 2019, that spending translated into an estimated $707 million of economic impact and $43.7 million in state taxes, according to the division’s analysis.

Opportunities to export original productions are also emerging, as Hawai‘i’s talent “is rising to levels like it’s never been before,” says Skinner. “You have people not just here in Hawai‘i but all over the industry who are saying, in the world of global entertainment and the push for diversity, who has the greatest chance to export this in the U.S.? It’s Hawai‘i,” she says. “We’ve got to ride that wave.” So just how big can the industry grow? Could it get $1 billion big? And can it evolve into a more sustainable industry that captures well-paid jobs for local people while building an infrastructure for homegrown productions and digital media ventures to thrive?

That’s what Skinner and other advocates are trying to make happen. But some point to gaps in that infrastructure, as well as a piecemeal approach to funding local projects and incentivizing larger ones to come, that limit Hawai‘i’s prospects.

Productions Keep Rolling

The state’s creative sector – which also includes areas such as music, publishing, arts education and museums – is more formidable than people might realize, accounting for about 54,071 jobs in 2019, or 6.1% of all civilian positions. That figure trails state government and pre-pandemic tourism, but is ahead of construction, real estate, finance and a host of other areas, according to DBEDT data. Film and TV drives the creative sector’s recent job growth, with Hollywood productions serving as its engine. Many worked straight through the pandemic.

The Disney+ production “Doogie Kameāloha, M.D.,” created and written by Hawai‘i-born Kourtney Kang, started shooting on O‘ahu in early 2021, as did the teen horror series “I Know What You Did Last Summer.” The Netflix kids’ movie “Finding ‘Ohana” was made in 2020. “Temptation Island” filmed its third season in a Wailea resort bubble in 2020. In February, the new “NCIS Hawaii” TV series announced that it’s coming to the Islands.

And at the Hawai‘i Film Studio, located on a 7 ½-acre lot near Diamond Head, the reboot of “Magnum P.I.” wrapped up its third season in March. The facility is the only state-owned studio complex in the country and includes a satellite facility, the Kalaeloa Film Studio, at the old naval air station at Barbers Point.

Studio spending in 2019. Source: DBEDT’s “CostBenefit and Fiscal Impact Analysis of Hawai‘i’s Film Tax Credit in 2019,” published March 2021.

Both studios are overseen by Donne Dawson, the state film commissioner, who anticipates boom times ahead: “2021 is going to be an explosive year in film production and the entertainment industry, all around the world. The overriding fact is that there is an insatiable demand for streaming content now.”

Major out-of-state productions hire about 300 to 350 local people each, says Dawson, and generate a cascade of economic impacts. “Every sector of our economy is in some way, shape or form impacted by a television production,” she says, “whether it is carpentry, whether it is electrical, catering, child tutoring, wardrobe, technology. A production is like squid tentacles that go everywhere.”

 

Even local nurses, their hours slashed when the pandemic closed many private practices, found work testing cast and crew, says William Roehl, who was on the COVID-19 protocol team through the third season of “Magnum P.I.” He says the unit successfully prevented outbreaks while pouring money into local PPE purchases and lab fees.

As a production assistant, Roehl is a nonunion employee who earns minimum wage, which is far below what camera operators make, for example, and leagues below the stars. Friends steered him into the industry after his grant-funded research work in a UH science lab ended, and he sees the job as a stepping stone. Right now he’s talking with a producer about a reality-TV concept, co-writing a serial show with co-worker Dylan Chace Lee, and applying for work in props where the pay is better.

“People will say, why would you want to be a PA, why are you going to work for minimum wage? It gets your foot in the door. … We get this great chance to run around and talk to everybody, make those connections and build your circle. It’s very much the people that you meet and you connect with who are the ones to give you the jobs.”

Lee, also a UH grad, worked as technical director at Manoa Valley Theatre and shifted to the COVID-19 team when live performances were canceled. He’s also trying to switch from theater to screen acting and has auditions lined up for small roles, which are difficult to land in more competitive markets.

film industry salaries

How wages and salaries were distributed in 2019. Source: DBEDT’s “CostBenefit and Fiscal Impact Analysis of Hawai‘i’s Film Tax Credit in 2019,” published March 2021.

“The Hawai‘i film industry has a much lower barrier of entry than Los Angeles or New York,” says Roehl. “A small part in L.A. is going to have thousands of people submitting who already have credits.” In Hawai‘i, he says, a handful of film/TV credits can pave the way for a better agent, union membership and a big pay bump.

A local spokesperson for SAG-AFTRA, the screen actors guild, said that in a typical year around 625 performers work under union contract in Hawai‘i, though numbers dropped by 40% in 2020. Published pay rates vary wildly but can easily run to $1,000 a day for union actors. Other unions cover people working in equipment and construction shops, as camera operators, publicists and writers, and on directorial and post-production teams.

The huge variations between union and nonunion jobs, and full-time work versus seasonal work, muddles the employment picture. But a recent DBEDT cost-benefit analysis for big-budget productions finds that the splashiest and best-paid work is hard to get, with Hawai‘i residents scooping up only about 0.4% of “above the line” positions such as writer, producer, director or principal cast. At the opposite end, more than 23,000 “extras” were hired locally in 2019. About 4,000 jobs fall between those extremes, many of which pay well.

“Every sector of our economy is in some way, shape or form impacted by a television production. … A production is like squid tentacles that go everywhere.” — Donne Dawson, Hawai‘i Film Commissioner

Connie Florez, an independent producer, writer and director, and the founder of Hula Girl Productions, says union crew members on TV series can make six figures in a short season. But the hours are punishing. “You’re working five, six days a week, and your one day off, you’re sleeping and you don’t see your kids. … After four years or five years, many just burn out. And then I find them going into independent films and working with me.”

 

Made in Hawai‘i

Though overshadowed by their California peers, Hawai‘i’s cinematic storytellers are gaining national attention. Among dozens of examples is Honolulu native Christopher Makoto Yogi, whose most recent independent feature film, “I Was a Simple Man,” was shot on O‘ahu’s North Shore with actor Constance Wu and premiered at the prestigious Sundance Film Festival in 2021. The film was heaped with critical praise, from Variety to The New Yorker.

A new animated short, “Kapaemahu,” from the O‘ahu based team of Hinaleimoana Wong-Kalu, Joe Wilson and Dean Hamer, won top prizes at numerous film festivals and, in February, was shortlisted for an Oscar. Like Yogi’s film, the work is deeply rooted in the Islands. It recounts a Hawaiian legend in Ni‘ihau Hawaiian, the oldest continually spoken version of the Hawaiian language.

“Waikiki,” a grittier take on contemporary life on O‘ahu from Christopher Kahunahana, won the 2020 Best Feature Film award at the Hawai‘i International Film Festival. He’s now in talks with three distribution agents, says Florez, who worked as a producer and assistant director on the film.

In the personality-driven realm of social media, Bretman Rock from ‘Ewa Beach has racked up 8.3 million YouTube subscribers and 10 million on TikTok, while Hawai‘i Island’s Amy Bircher sold a script she developed in a local Creative Lab screenwriting workshop to Lifetime, which will air the story in December.

“In the last 10 years that we’ve been here, there has been a significant shift in the quantity and quality of filmmaking, media-making and storytelling,” says filmmaker Wilson, who relocated from the continental U.S. in 2011. His partner, Hamer, agrees: “You can even see it at the Hawai‘i International Film Festival. If you look at the program this year, a big chunk was films made in Hawai‘i, and they were there not just because they have to support local stuff, but because it was the most interesting part of the program.”

Many HIFF selections were made by graduates of UH’s 10-campus Academy for Creative Media programs, which are seeing record enrollments. In fall 2020, UH Mānoa had 301 undergraduate students majoring in digital cinema, animation and creative media programs – nearly double the number from 2017.

The program at UH West O‘ahu, which until recently occupied a handful of rooms, has expanded into a new $37 million facility; its student numbers are expected to match UH Mānoa’s in the next few years. It’s also the proposed location for a massive new film studio, a potential accelerator for Hawai‘i’s creative sector.

Whether that goal succeeds rests in large part on the tenacity of ACM founder and director Chris Lee.

 

A New “Transmedia Campus”

UH West O‘ahu sits near the end of H-1, in the dry plains below the Wai‘anae foothills. When I visited, red dirt from the mountains was blowing along the main throughway to the campus and new plantings were trying to take root. A short distance away, four empty cars slid along the final stretch of the Honolulu Rail track in a hopeful test run.

This spare and unassuming patch in Kapolei is home to a glistening hub for new media, digital content and game design. It officially opened in February – while students were stuck at home and using Zoom – and rivals anything at the University of Southern California’s cinematic arts program, says Lee, the facility’s mastermind.

The cavernous space is equipped with $3 million worth of equipment. It houses a hangar-like soundstage with a 360-degree green screen. There’s a 100-seat theater with Dolby Atmos sound technology; a fully equipped maker-space; editing and sound-mixing studios; and fleets of slender iMac Pros, cameras and portable lights. In one room, projections of original animations sweep across the walls, like “virtual reality without the glasses,” explains Lee.

“We call it the Transmedia Campus, or the Campus for Content, because it looks at all the very disruptive changes that have happened in how you produce things and how you distribute them,” says Lee. YouTube, for one, delivers more than 500 hours of new video content every minute.

Though remote, the UH West O‘ahu facility is meant to anchor the ACM network, which includes a television production program at Leeward Community College, audio engineering at Honolulu Community College and UH Mānoa’s flagship cinema program. More broadly, Lee hopes the facility at UH West O‘ahu can help keep people working and well-compensated.

“After sugar and pineapple collapsed, Hawai‘i’s only major export has been our children,” says Lee, who himself left for Yale University and eventually a career in Hollywood as president of production at Columbia and TriStar Pictures and a lone Asian American executive in the industry. He brought his knowledge and connections back home, launching the ACM program at UH Mānoa in 2003.

But the West O‘ahu facility feeds into larger goals as well. Lee envisions a 120,000-square-foot studio complex situated on an empty lot next door, allowing film and TV productions to both shoot and finish their projects in the Islands, and funneling ACM students into lucrative jobs and opportunities to create their own digital media businesses.

 

Dreams of a Studio Complex

“We could have $1 billion in direct spend here,” says Lee. As it stands, the soundstage at the Diamond Head studio can only accommodate one production at a time, and most projects go elsewhere for post-production work – such as editing, adding music, creating special effects – taking a significant chunk of revenue with them.

In 2019, only four of 37 productions that reported their production days to the state film office stayed in Hawai‘i for their post-production work, according to a March 2021 report prepared by DBEDT’s research and economic analysis division.

“When I talk about a studio, it’s an idea factory. It’s about IP (intellectual property) and distribution through broadband,” Lee says, reciting a long list of manufacturers of physical products that skipped over Hawai‘i in their search for new sites. “I’ve always been about stuff that doesn’t require airlift or sealift, because that always puts us at an economic disadvantage. … The game that we have been in since 1906 (when Thomas Edison shot moving images of Waikīkī) has been content. And that happens to dovetail really well with the talent base of our students, too.”

Says independent filmmaker Edgy Lee: “It takes a lot of money. It takes a lot of faith. But I think the dream is viable. There are different aspects of the film industry, and the one that we are doing well is attracting outside resources to spend money here. But they leave. They don’t stay to finish the film.”

Like Chris Lee, Edgy Lee (no relation) spent years in Los Angeles, in acting and music production, before returning to the Islands and making a series of landmark documentaries: “Papakōlea: A Story of Hawaiian Land,” “Waikīkī: In the Wake of Dreams,” “The Hawaiians: Reflecting Spirit” and others. When we spoke, she was working on a short piece on the Native American Ute people for a Colorado health organization, the kind of public service work that many local filmmakers do.

She thinks a studio could play a big part in creating a healthier industry where “there’s commerce and there’s revenue and there’s a future. … You have a whole generation of people who’ve gone to film school and hit the ground with jobs in LA or New York or Chicago, and they don’t come home. So we’ve lost a whole sector of talent,” she says.

State Sen. Michelle Kidani championed funding for the new ACM facility at UH West O‘ahu, and supports building a studio there, which was selected as the most suitable site in a 2017 study. Kidani helped shepherd Act 275 through the state Legislature in 2019, which requires UH West O‘ahu to transfer land for the proposed studio to DBEDT’s Hawaii Technology Development Corp.

“It’s the most logical place to build a large studio complex,” she wrote in an email. “Having a film studio connected to UHWO furthers the opportunities for our homegrown talent to apply what they learn.” For it to work, the project still needs a public-private partnership.

 

The Issue of Incentives

Act 275 also increased the state’s incentive cap for all productions from $35 million to $50 million, with an expiration date currently set for the end of 2025. Although industry terminology refers to these programs as “tax credits,” they can also be used as “refunds.”

“After sugar and pineapple collapsed, Hawai‘i’s only major export has been our children.” — Chris Lee, Founder and Director, Academy for Creative Media

Here’s how it works: For every $200,000 in qualified expenditures made in the state, including salaries for cast and crew, a production can file to receive 20% back for costs incurred on O‘ahu and 25% on the Neighbor Islands. Payouts for each production can go toward taxes or as a refund and are capped at $15 million.

Not surprisingly, writing fat checks to Hollywood studios ruffles feathers, here and in other states where such incentives exist. A state audit in 2016 uncovered poor oversight of Hawai‘i’s program and a tendency to inflate the economic benefits of offshore productions. For now, the Hawai‘i Film Office has tightened its rules for what qualifies as production costs and is working to instill confidence in the program.

“There is by and large support for the tax credit in the Legislature,” says Dawson. “They have witnessed a quadrupling in the size of this industry. So the film industry, through the tax credit as an incentive for economic development, has outperformed.” Before a more modest version of the incentive program was introduced in 1997, annual spending reported to the film office never hit $100,000, according to a March 2021 cost-benefit analysis of the incentive by DBEDT.

Chris Lee emphasizes that incentives pay for themselves many times over, while scaling them back drives business away. “There is no industry in this country or this world that is not incentivized somehow,” says Lee. He says the state should eliminate the cap, calling it “a solution looking for a problem.”

His sentiment was validated by DBEDT’s cost-benefit analysis: It found that 39 productions fi led claims for $65.4 million in qualified expenditures in 2019, representing $73.4 million in lost gross domestic product. In turn, those productions generated $330 million in GDP, including spending on local wages, goods and services. That’s a net gain of $256.6 million, though not all of that money stayed in Hawai‘i.

A March 2021 brief from the UH Economic Research Organization recommends that the credit cap be raised to $75 million and the sunset date pushed to 2030, though Skinner from DBEDT’s Creative Industries Division would like the incentives extended for another five or 10 years beyond that. With the program currently set to expire in less than five years, she worries there is “not enough runway to either attract more television series or to issue an RFP to attract a public-private partnership to build a new studio complex.”

 

New Zealand’s Model

While other states and countries also wrestle with the right incentive formula, the success story most frequently mentioned is New Zealand. Peter Jackson’s “Lord of the Rings” movie trilogy, which opened in 2001 with an international cast but mostly local production crew, put the country on the filmmaking map.

It didn’t happen by chance. A 2012 report from New Zealand’s Ministry of Economic Development tracks key developments that got it there. In 1978, the island nation of then 3.1 million people established its fi rst fi lm commission and began funding original work. By the early 1990s, local directors such as Lee Tamahori (“Once Were Warriors”), Jane Campion (“The Piano”) and Peter Jackson (“Heavenly Creatures”) had broken into global markets.

The spigot stayed open for both producing and attracting productions. For example, the state-supported Māori Television Service was launched in 1994. The government started tax incentives and grants to lure large-budget productions and post-production work from abroad. A series of additional grants were started for domestic productions in the 2000s.

“Movies showcasing New Zealand culture and character would be virtually impossible to make if we were to lose this critical funding provided by the government,” wrote Jackson in a 2010 review of the New Zealand Film Commission.

economic impact of film/tv productions

The economic impact of film and TV productions. Figures are in millions of dollars and rounded, except for employment, which is in number of jobs. Source: DBEDT’s “Hawai‘i’s Creative Industries,” updated 2020.

The investments in talent and infrastructure spurred a wave of startups, such as Weta Digital, co-founded by Jackson, which launched in 1993 to produce visual effects for “Heavenly Creatures.” It expanded into a suite of Wellington-based companies that include a design studio, sound production, rentals and a massive soundstage.

By 2017, the industry had grown to U.S. $2.45 billion in gross revenue, according to the New Zealand Ministry of Business, Innovation and Employment, including both domestic and offshore productions shot in the country’s studios and otherworldly landscapes. The sector employs 14,000 people – with post-production professionals earning high-tech wages – and works in tandem with a larger ecosystem of businesses producing commercials, online educational materials, games and apps.

As in Hawai‘i, the industry also generates “spillover” benefits that are harder to quantify, such as meals, hotel rooms, lumber for sets, equipment rentals and many other on-the-ground expenditures.

“If you look at New Zealand, I think they’ve seen the possibilities of what can happen when you have a Peter Jackson, or somebody who can do a big film. It can really galvanize the local industry,” says Anne Misawa, an associate professor at UH Mānoa’s Academy for Creative Media and a screenwriter, cinematographer and producer.

Misawa co-produced Christopher Makoto Yogi’s “I Was a Simple Man,” which struggled for years to land financing. Yogi was one of her first students at UH Mānoa in 2004, when she returned home to teach at the new ACM program, then a grant-funded pilot program. Though the program has boomed, she leads camera and lighting workshops in a parking lot because of a lack of space.

For Yogi’s film, Misawa says, everything changed with the massive commercial success of “Crazy Rich Asians.” “That really shifted the funders’ point of view about what might be more commercially viable,” she says. “Even though Chris’ script is a very art film kind of script … I think funders saw it in a new light because of what was going on in the box office. And so the timing was right.”

Misawa would like to see government funds set aside for filmmakers to complete their projects. Yogi agrees that holes exist in the funding model, with locally produced feature films largely neglected.

 

Funding Avenues and Dead Ends

“Right now, how the industry in Hawai‘i is set up, there are paths to making a microbudget independent film or documentary or a very large studio movie,” Yogi explains in an email. “It is very hard to make something in the middle, as we did with ‘I Was a Simple Man.’ We had to forge our own path.”

The majority of his crew was hired locally, he says, which was important to everyone involved in the project. “We wanted to show that an independent film of this size was possible in Hawai‘i, highlighting local talent both in front of and behind the camera. Our crew ranged from old vets who’d been in the industry for decades to newly graduated UH students to folks like me who flew back home for the opportunity to work on something cool,” he writes.

In the documentary world, Pacific Islanders in Communications, in partnership with PBS Hawai‘i, has emerged as a major funder in Hawai‘i. Among their projects, the group helped produce “Kapaemahu,” as well as other work from the Wong-Kalu, Hamer and Wilson team. Their full-length documentary shot in Tonga, “Leitis in Waiting,” for example, was selected for PIC’s Pacific Heartbeat series and aired nationally in 2019 through American Public Television.

PIC also funds short films on the Pacific Islander experience, while local groups such as ‘Ohina Labs help microbudget projects get made and viewed in screenings, festivals and streaming services. The public-private Creative Lab Hawai‘i offers workshops and mentorships for writers, producers, animators, game app developers, musicians and others. In April, the Creative Industries Division opened a new multipurpose studio space – Creative Space Hawai‘i – at the Entrepreneurs Sandbox in Kaka‘ako, where users have access to screenwriting, editing and visual effects software.

Connie Florez of Hula Girl Productions credits the Creative Lab workshops for energizing the independent filmmaking scene and creating pipelines for local talent. Like others in the field, she spends time mentoring people, with a focus on how to create budgets and pitch projects. “I think our greatest weakness is that infrastructure part. How do you get money?” she asks.

All of these efforts are ultimately designed to help more people tell authentic Hawai‘i stories that resonate with a broader audience.

 

Original Stories

Even Dawson, the state film commissioner, who is a strong advocate of Hollywood productions in the Islands, admits there’s still work to do in shifting outside perceptions. “The film industry in Hawai‘i is over 100 years old, and people know us through this media,” she says, recalling “The Shark God” and “Hawaiian Love,” the first Hollywood films shot in Honolulu in 1913. “But for the most part, the world doesn’t know us at all, and that is incumbent on us, the Native community and the local community, to shed light on that.”

“There’s so little understood about Hawai‘i and the Pacific,” echoes Wilson. “It just feels so important that people here be able to help shape the narrative and the way these places are perceived.” His team is now deep into a new Hawai‘i-based project, with two recent UH Mānoa grads working on the animation.

Yogi says viewers have told him that his film, which chronicles the last days of an elderly man named Masao as he straddles encounters with his long-deceased wife and his complicated living family, opened their eyes to a Hawai‘i they never knew existed; some local viewers said it was the first time they had felt a deep connection to a film shot here. He urges the state to prioritize local filmmaking.

“In order to create sustainability, the work needs to originate from the Islands. And the only way to do this is to cultivate original independent voices in Hawai‘i. This means supporting independent films so that filmmakers can continue to grow and, as they grow, the homegrown industry grows,” Yogi says by email.

So many pieces are in place for the sector to take o  : the multi-campus Academy for Creative Media, state-sponsored workshops, an incentive program for big-budget productions, funding and distribution for documentaries about the Pacific, and a wealth of talented people.

But weaknesses persist: the lack of a major studio complex for lucrative post-production work, a looming expiration date on incentives for big-budget productions, and a paucity of funding for locally made feature films or original series.

If you look to New Zealand, support for every stage – from script to finished product – and a focus on original work that reflects the culture have resulted in a thriving, globally recognized industry. Connect them all together, and Hawai‘i’s industry could be poised to double in size, and move far beyond its current designation as “Hollywood’s tropical backlot.”

 


Selected Resources for Hawai‘i Film Industry:

 

 

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