The Minister for Arts, Sports and Tourism, will propose the appointment of a film ambassador to Hollywood, following a series of meetings with executives of major studios to promote Ireland as a location for US movies.
Mr O'Donoghue said: "Attracting major film productions to Ireland is like attracting a major industry.This needs personal relationships, so we have to look very seriously at placing a film ambassador in Hollywood."
Mr O'Donoghue and Irish Film Board executives met heads of production from Warner Brothers, Miramax, 20th Century Fox, Sony, Paramount, Universal and Disney during two days in Los Angeles promoting Ireland's advantages as a film location. His visit comes against a background of a fall in foreign investment in the film industry in Ireland from €211 million in 2003 to €160 million last year, though 2003 was exceptional because of the making of the big-budget King Arthur in Co Kildare. There is also a tougher financial environment for US movie-makers filming abroad because of the weak US dollar "which is definitely a concern," said Mr O'Donoghue.
"One Hollywood production can make a big difference to the local economy," he added, noting that the filming of King Arthur meant €60 million was spent in Co Kildare. Last year three major Hollywood movies were shot in Ireland: Breakfast on Pluto, The Honeymooners and Tara Road.
Mr O'Donoghue also had discussions with executives from Avica, a technology firm that is working to digitalise the showing of movies in Ireland. Mr Nicholas Clay, chairman and chief executive of the Santa Monica-based firm which recently opened its European headquarters in Thurles, said it planned to convert all of the Republic's 515 cinemas to digital screening, with distributors paying the costs.
Mr O'Donoghue said the project would revolutionise the distribution process and quality of films shown in Ireland and "it would ensure that a cinema in Tralee would have the same immediate access to films as a cinema in Dublin".
He stressed that the extension of Ireland's tax-based incentive known as Section 481 from 2005 to 2008 was vital in attracting investment for Hollywood movies in Ireland. Under this scheme, which was to be phased out last year, Irish investors can write off 80 per cent of the amount invested for tax purposes.
Mr O'Donoghue will seek to increase the incentive by raising the cap on the minimum amount raised under the scheme. "If you want a high-budget film, the size of the cap could be the breaking point."
The Minister for the Arts underlined the skills of the professional base in Ireland where on average up to 20 features, 10 major TV dramas, 40 shorts and innumerable documentaries and commercials are shot in any one year.
He also emphasised that Ireland was English-speaking, had castles and churches, and the type of seascapes and topography that had made it a desirable location for movies such as Saving Private Ryan and Braveheart.
"They say all the world's a stage, but all of Ireland is a film lot," Mr O'Donoghue told a dinner in Hollywood on Tuesday hosted by Irish Consul General Donal Denham and attended by film personalities including actor Colin Farrell.