texas film incentives: a systems theory perspective

NOTE: this blog post is based on a 3 month long project evaluating TMIIIP using Systems Theory. I finished the project in late-April, and neither the report nor this post have been updated with any of the recently updated language from the bill. My plan is to update the actual report with the updated bill text that will be going to the Governor’s desk before we publish the report. However, I wanted to publish this blog post now since this topic seems to be in the zeitgeist this week.

Alright, let's talk about the Texas Moving Image Industry Incentive Program, or TMIIIP. Some of you are tired of hearing about it; others think navigating and understanding the world of film grants and incentives feels like a labyrinth and just won’t ever bother. The bureaucratic nature of these programs already favors faster adoption by studios over indies, which combined with their spending power creates a bit of a wrecking ball situation for independent producers and production companies. 

You're perhaps also wondering whether you can actually benefit from this program, if it's built to last, and if there's any way to make it work better for the smaller productions that are the actual future of our industry. So, let's dive in and see what's what.

The Wild Ride and How TMIIIP Got Here

The TMIIIP has been around since 2007, with funding levels bouncing around quite a bit over the years. Initially, there was a pretty high bar for staffing your production with Texas crew, 70% to be exact. Honestly, for out-of-state and big budget productions, that was a tough hurdle. The technically skilled workforce wasn't at the capacity level needed for sustaining simultaneous large productions. Some of us have been pushing for more emphasis on technical roles for years, yet the system kept churning out directors, writers, and actors instead of grips, boom ops, and gaffers.

This reality, in combination with a push from the studios, led to the in-state crew requirement dropping to 55% in 2023. The proposed bill will drop it even further to 35% from September 2025 until 2027, with a healthy chunk of change ($30MM) going towards developing a film workforce program with higher education institutions. The idea is to grow the local talent pool and to slowly increase the in-state crew requirement over time. Thumbs up for that.

Funding has seen a jump too. After a surge in productions during 2020, partly thanks to lax COVID rules, the program's budget jumped significantly to $200MM in 2023. And get this – between Sept 2023 and Sept 2024, $78MM was awarded, which is roughly 80% of the previous five years of grants combined! Now, the current discussion is ultimately centered around a massive $2.5 BILLION investment spanning the next decade, requiring consistent and sustained throughput from media producers.

Big numbers over a long time. But does that translate to big opportunities for indie filmmakers?

The Deck Seems Stacked: Studios vs. Indies

Here's where it gets a little less sunny for the indie crowd. The TMIIIP is tiered based on budget/spend. If your film has a budget between $250K and $1MM, you might get a 5% grant. $1MM to $1.5MM? That's a potential 10%. But hit $1.5MM and above, and you're looking at 25%. For the big studios, hitting that $1.5MM is a walk in the park. For an independent filmmaker? That's often a distant dream.

Think about it: a $10MM studio flick can snag a $2.5MM grant. You'd need 100 indie films with $500K budgets to equal that in grant money. Already, we have massive TV shows with $80MM budgets filming here, which could technically gobble up about 8% of the 2 year allocation on its own. The more you look at it through a systemic lens, the argument that this isn't just "corporate welfare" starts to appear a bit thin. Looking at data from January 2018 to September 2024 (the cleanest run of data currently available from the Texas Film Commission), indie productions only got 2% of the grants given to TV shows and 14% of the film grants. The system, as it is, seems to favor the big spenders.

On top of that, there's the influence game. Studios can roll in celebrities to lobby the legislature. Indie productions? We're often left navigating the maze of local film commissioners and groups like the Texas Motion Picture Alliance (TXMPA) to get our voices heard. When studios want something, they often get it; and what the larger studios need tends to outweigh what independent producers need. Because it’s politics, and money talks.

Is This Thing Built to Last? Sustainability in Question

With all this talk of big money and attracting major productions, a crucial question for indie filmmakers is: is this sustainable in the long run, especially for us? The program is intended to stimulate the economy and create jobs. The idea is that attracting productions leads to more in-state spending, more local sales and tax revenues, and thus a better ROI for the state. The proposed $2.5B over 10 years suggests a longer-term commitment than the previous two-year funding cycles. This makes Texas a more attractive and reliable place for productions on studio timelines to plan ahead.

However, the legislature still meets every two years and can change things up. If the program doesn't hit its ROI targets, funding could be slashed. Almost counterintuitively, this lends to the strength of TMIIIP as a complex adaptive system, demonstrating self-maintenance; guardrails like this are actually necessary to prevent the system from tipping into chaos.

We've seen programs in other places, like NYC, where the return on investment dropped dramatically leaving millions of square feet of previously used production and warehouse facilities largely abandoned. Or in California where L.A. is scrambling to simplify and streamline their program to bring work back. 

While the Texas program aims to avoid that, the pressure to deliver big numbers to justify the investment could mean continued focus on attracting large-budget projects that heavily contribute to that ROI, increasing competition between states, and potentially leaving indies in the dust.

Local communities are already pushing back against the construction of large studio facilities due to concerns about the impact on resources and infrastructure, like water and electricity demand. This resistance adds another layer of complexity to the program's future and where productions might land.

Shaking the System: Opportunities for Change

So, what can we do? The current system seems geared towards attracting big fish, but there are definitely opportunities to advocate for changes that could benefit independent artists in Texas. After months studying TMIIIP through the lens of Systems Theory and identifying the key points in the system where indies can leverage the most change, we recommend the following:

• Transparency: More readily available and transparent reporting on who is getting initially approved for grants, for how much, and if it was actually granted when all was said and done. It would be great to include a running list of reasons for declines as well. There are many ways to do this with integrity. This would help the indie community understand where the money is going and what types of projects are actually successful instead of relying on sporadic updates and word-of-mouth/rumor.

• Incentive Bonuses for Indies: Imagine getting a bonus grant for beating the in-state workforce requirements by a good margin, or a 2% bonus for production companies that have been around for at least two years and are owned by Texas residents. Or, what about offering these bonus incentives to smaller productions that don’t meet the budget requirements? This would directly benefit and reward local independent efforts. 

• Leveling the Playing Field: Removing the budget-based tiers for grants. This would mean a dollar spent by an indie filmmaker is treated the same as a dollar spent by a major studio, focusing the program on rewarding all levels of production equally.

• Clearer Guidelines: Codifying the criteria for what qualifies as "Texas values," "family values," and "faith-based" content for those specific bonus grants. This would remove some of the "black box" nature of these decisions.

• Earmarking Funds: Setting aside a specific amount of money within the TMIIIP specifically for non-studio, independent films. This would guarantee that a portion of the incentive money directly supports the indie scene. 

These aren't just wish list items; these are mapped out intervention points identified with Systems Theory. From the perspective of an indie film producer existing within the TMIIIP System, these are concrete ways the program could be adjusted to create a more equitable and supportive environment for independent filmmaking in Texas, while maintaining the overall stability and health of the system. 

And it requires the indie community to continue advocating and making our voices heard at the local and state levels.

Navigating the Chaos and Finding Your Place

The film incentive landscape, not just in Texas but nationally and even globally, is a bit chaotic. States are constantly changing their programs to compete. New York is throwing big money at it - $800 million per year. California is still outspending Texas, albeit with a smaller incentive percentage. The point being, everybody is reacting to Texas getting in the game. Small changes can have big impacts, and while there are patterns, it can feel unpredictable. 

International competition is also heating up as European countries tinker with their own incentive program requirements to redistribute long-term equity. In response, the Trump administration has been throwing around the idea of a national incentive.

And we’ve looked at it. However, given the steady stream of announcements that have been deemed unconstitutional or outside the authority of the Executive office, we are going to hold off from doing any kind of serious deep dive until there is actually traction and momentum around it.

But within all of this chaos, there's a chance to adapt and find our footing. The proposed changes in the TMIIIP, like the focus on workforce development and the longer-term funding plan, show an effort to create more stability and work toward long-term sustainability of the industry. But absent some sort of shift to focus on supporting and building out the infrastructure of “employers” in the local industry, the Texas-based production companies, we could be looking at a large group of skilled workers who can’t find work in ten years when the program ends and the studios leave.

As independent filmmakers, we need to stay informed, understand the dynamics at play, and actively participate in the conversation about how this program evolves. It’s about finding ways to leverage the existing system while pushing for necessary adjustments that acknowledge and support the vital role of indie film in the Texas creative ecosystem.

The future of the Texas film incentive program and its impact on independent filmmakers is still being written. It's a complex system with many players and influences, and to Texas’ credit, it is a stable, robust system; we just need to continue iterating to where it truly supports the Texas industry as much as it supports the studio system.

By understanding how it works, identifying its shortcomings for the indie community, and advocating for specific, impactful changes, we can work towards a future where the Texas Moving Image Industry Incentive Program truly benefits all filmmakers, not just the biggest ones.

Let's build something better, together.

Why Indie Filmmakers Should Embrace Strategic Foresight

Independent filmmaking is an exhilarating but often unpredictable journey. From securing funding and navigating production challenges to finding distribution and reaching an audience in a rapidly changing media landscape, independent filmmakers face inherent and high uncertainty. In a world where the only certainty is uncertainty, how can filmmakers not just survive, but thrive? The answer lies in leveraging the power of strategic foresight.

Strategic foresight is a practice that enables an organization – or in this case, an independent filmmaker or production team – to lay the foundation for future advantage. It's about developing the capability to understand and act upon future environmental uncertainty. It involves creating and maintaining a high-quality, coherent, and functional forward view and using those insights in useful ways. While traditionally applied in business and government, the methods and mindset of strategic foresight are remarkably applicable to the dynamic world of independent film.

Here's why hiring us and integrating strategic foresight into your independent film making process can be incredibly useful and beneficial:

• Navigating Uncertainty and Mapping Possibilities: Strategic foresight's primary goal is to map uncertainty. For filmmakers, this means moving beyond simply hoping for the best-case scenario. It involves actively exploring the range of plausible futures relevant to your project, considering the many potential futures that are objectively relevant. In a world where our actions in the present influence the future, uncertainty is opportunity. Strategic foresight helps you see these opportunities.

• Identifying Emerging Trends and Weak Signals: A core function of foresight is scanning the environment for signals of change. This isn't just about obvious trends like streaming growth; it involves looking for weak signals – subtle indicators that may influence the future even if currently underdeveloped or ambiguous. For independent film, scanning can reveal shifts in audience tastes, new funding models (e.g., decentralized finance, crowdfunding trends), technological advancements in production or distribution, changes in regulatory frameworks, or evolving cultural narratives. Paying attention to these signals can help you detect adverse conditions and establish an early warning system.

• Creating Alternative Futures and Scenarios: Strategic foresight doesn't aim to predict a single future. Instead, it focuses on creating alternatives and exploring multiple futures. This is done through various context-dependent methodologies. For a film project, this could mean developing scenarios around different distribution paths (e.g., traditional festival circuit, direct-to-fan distribution, platform-specific release), varying budget outcomes, or diverse audience reception possibilities. Scenarios open up the present, contour the range of uncertainty, reduce risk, offer alternatives, and create more flexible organizational mindsets. By considering a range of plausible futures, you can develop more robust and creative strategies to create, produce, and distribute your film.

• Developing Vision and Strategy: Foresight isn't just about understanding potential futures; it's about envisioning plausible future states. Filmmakers can use foresight to define their vision for the project, their career, or their impact. Once a vision is identified, backcasting can be used to determine the necessary steps and actions needed. This process helps translate abstract futures into actionable insights that can inform your strategic planning and development efforts.

• Enhancing Strategic Decision-Making: Ultimately, the goal is to make better strategic decisions by incorporating insights about potential futures into your process. Strategic foresight helps you improve the mental model of decision-makers. It provides a foundation for assessing options and developing plans.

• Challenging Assumptions: Foresight work helps to uncover unexamined assumptions about the future that might be preserving the current paradigm. Independent filmmakers often operate with implicit assumptions about how the industry works, who their audience is, or what is creatively possible. Challenging these assumptions can lead to new strategic options and ways to frame the problems you face.

• Building Adaptability and Resilience: By exploring potential challenges and opportunities, foresight helps prepare you for the unexpected. Preparing for potential "wild cards" or high-impact, low-probability events is a part of developing contingency plans. This preparation fosters a future-oriented mindset and supports effective decision-making in complex, uncertain environments.

• Identifying Issues and Opportunities: The insights gained from exploring futures can be reframed as either issues to be addressed or opportunities to be seized. This helps prioritize where to focus your limited time and resources.

• Fostering Learning and Networking: Engaging in foresight is inherently an ongoing learning process. It encourages continuous exposure to new ideas and trends. The process also involves engaging a broad network of people to handle the wide range of information and provide specific expertise. Building networks and intense interactions among stakeholders is a key requirement for successful foresight. This collaborative aspect can be particularly valuable for independent filmmakers seeking to build their community and find collaborators or mentors.

• Shifting Perspective: Strategic foresight can help shift attention from just the 'perceived environment' to the 'pertinent environment'. It opens pipelines to new ways of thinking and encourages divergent thinking about what could realistically happen.

Strategic foresight is not a crystal ball promising surefire predictions. It's a systematic approach of exploring the future to influence the present. For independent filmmakers navigating a turbulent industry, adopting strategic foresight provides valuable tools and a crucial mindset shift. It equips you to better anticipate and prepare for future opportunities and challenges, cultivate futures literacy, and increase the likelihood that your creative vision can find its place in the world.

A Manifesto for the future of film and media

The landscape of film and media is undergoing a radical metamorphosis, propelled by technological innovation, shifting audience behaviors, and a fundamental redefinition of how stories are told and consumed. This is not a gentle evolution, but a profound disruption that demands a new vision and a bold embrace of the future.

The End of Linearity, the Dawn of Immersion: By 2050, the era of linear television will be a relic, replaced by immersive on-demand platforms and personalized content ecosystems. Content will break free from the constraints of channels and schedules, flowing across devices and integrated with AI-powered virtual environments. We will step beyond passive viewing into interactive storytelling formats like VR and AR, blurring the lines between film, games, and reality.

The Hyper-Personalized Universe: Artificial intelligence will become the architect of our individual media experiences. AI will predict user preferences with near-perfect accuracy, curating and even generating personalized shows and advertisements in real-time, adapting to our emotions, behaviors, and contexts. Physical screens may become obsolete as wearable AR devices and holograms transform our homes, cars, and public spaces into immersive, personalized viewing arenas.

AI: From Assistant to Author: The creative process itself will be revolutionized by artificial intelligence. AI will not only support but also generate most content, from news and entertainment to advertising. Machine intelligence will play a dominant role in crafting narratives, monitoring engagement, and personalizing experiences at an unprecedented scale. AI systems will act as creative collaborators with human artists, generating films, shows, and interactive experiences tailored to shifting trends and real-time audience feedback. The rise of AI-generated actors will challenge our notions of performance and authenticity.

Commerce Seamlessly Woven into Content: The future of advertising lies in seamless integration into digital environments through real-time commerce media networks. Legacy TV companies will compete with global commerce platforms where shopping, advertising, and entertainment converge. Ads will become indistinguishable from content, powered by immersive commerce environments where viewers can instantly interact with products via AI avatars and virtual stores embedded within shows and events. Retail and commerce media will dominate ad spending, creating multi-trillion-dollar ecosystems.

New Economic Landscapes and Ownership Models: Traditional subscription models will evolve into freemium ecosystems, where consumers pay with data, attention, or transactions rather than currency. Micro-transactions and blockchain-based royalties will enable decentralized revenue sharing, empowering creators and consumers. Decentralized models of content creation, utilizing DAOs, will empower audiences to own and influence media properties directly, redistributing power. Independent filmmakers, empowered by AI-powered tools and blockchain financing, will thrive alongside the evolving major players.

Virtual and Mixed Reality as Core Platforms: The metaverse will evolve beyond entertainment into a primary social and economic space where education, commerce, healthcare, and media converge. Companies that adapt early to this landscape will capture unprecedented levels of audience engagement.

Navigating a Chaotic Yet Connected World: The film and media landscape will continue to exhibit characteristics of a chaotic system, marked by non-linearity, turbulence, and bifurcation. Small changes in audience preference or technological advancements will trigger significant and unpredictable shifts. The industry will likely reorganize into new, albeit still volatile, equilibria, balancing traditional models with emerging digital realities. Social media will remain an indispensable force, shaping marketing, talent discovery, audience engagement, and data collection.

The Imperative of Responsibility: As technology advances, ethical considerations and sustainability will become paramount. Media companies must address AI bias in content and advertising, ensuring the ethical use of AI to maintain trust and avoid regulatory penalties. Aligning with global sustainability goals will be crucial, especially as immersive technologies demand substantial energy. Sustainable media operations will be essential for public goodwill and compliance.

A Call to Embrace the Unfolding Future: The future of film and media will be shaped by tech giants and agile innovators who embrace technological change, new business models, and the convergence of media, commerce, and AI. Legacy companies must adopt AI at every level, integrate with retail media networks, embrace decentralized ownership models, and invest in sustainability to remain relevant. Independent filmmakers must adopt a futurist mindset, embracing foresight to navigate the chaotic realities and leverage emerging trends. The journey ahead is dynamic and uncertain, but by embracing innovation and responsibility, we can unlock unprecedented opportunities for storytelling and audience engagement in the evolving world of film and media.