British Columbia film and TV production declines
Monday November 25, 2002VANCOUVER, British Columbia (AP) Movie and television production in British Columbia is likely to fall below $1 billion about $635 million U.S. this year for the first time since 1999, industry sources say.
The British Columbia Film Commission reports the number of projects for the first nine months of 2001 was slightly ahead of last year, but a senior industry executive says spending is down sharply and a union leader says unemployment in some sectors is approaching 50 percent.
``Our estimates are off by about 30 percent this year as far as overall revenues,'' said Bob Scarabelli, chief executive of Rainmaker Income Fund and a director of the Motion Picture Producers of British Columbia.
Film and TV production revenue in 2001 exceeded $1.1 billion after reaching $1.2 billion in 2000.
The decline this year reflects the effect of the stock market crash and terrorist attacks on the U.S. entertainment industry, responsible for about three-quarters of the movie and TV spending in the province.
Film commission figures indicate feature film production was up this year, including major projects such as the X-Men sequel, but the number of TV series and movies of the week declined.
Television is the mainstay of the Vancouver-based industry, the third largest film and TV center in North America behind Los Angeles and New York.
Scarabelli, who runs the second-largest post-production company in Canada, says Rainmaker's revenues are down about 15 percent.
``My peers across the industry are down 25 to 50 percent, so I've averaged out to 30 and said that's where we're at,'' he says.
Film and television employ about 25,000 people in the province, and unemployment among the approximately 12,000 unionized workers is running about 50 percent, said Tom Adair, executive director of the British Columbia Council of Film Unions.
``I don't think we're going to be close to $1 billion,'' Adair said.
The sluggish economy has made U.S. studio executives very risk averse, says Robert Routh, senior analyst for Arnhold and S. Bleichroeder Inc. in New York.
``The access to capital, I think, has been the biggest factor that is impacting film and television production everywhere,'' Routh says.
With a workforce of 160 people, Rainmaker has laid six and allowed contracts for four others to expire, has written down assets aggressively, is pricing its services more attractively and seeking to new clientele, such as Asian commercial producers, Scarabelli said.
``We have and will continue to expand into more independent and local Canadian production and land some of those projects,'' Scarabelli adds.
For workers, most of them behind the camera, the choices are more limited. Set builders might find jobs in construction, Adair said, but lighting, set decoration and other trades are more vulnerable.
``If they have to start selling their stock and selling their equipment because they can't keep pace, all that infrastructure starts to collapse,'' he said, ``and the infrastructure and all that is what you need for servicing a larger number of productions.''
If the slowdown extends much into next year, Scarabelli said, larger companies will have to cut services and smaller ones will consolidate or close.
``If you don't have the infrastructure to compete globally, then it really will start to deteriorate,'' he said.
Besides leaner economic times, competition for Hollywood dollars has increased from other areas such as New Zealand and eastern Europe.
``So we have to be more competitive in order to keep at a plateau or any kind of growth level,'' Scarabelli said. ``I think this has been a wakeup call 2002 in the industry in Canada.''
In a business that treasures labor peace, unions have negotiated though not yet ratified three-year agreements without wage increases in the first year, Adair said.
The Canadian government has dropped some tax incentives, but remaining tax breaks and a weaker currency still make Canada attractive, Routh said.
He said the biggest threat to Vancouver would be if California, seeing Hollywood's backlash against runaway production costs, were to match those incentives.
``Is that something that I expect?'' Roth said. ``No.''
(