Photo by Piotrek Luszczak from Unsplash
The filmmaking industry comprises the technological and commercial institutions of filmmaking. It involves both a creative as well as a business element, and activities including cinematography, film production, screenwriting, pre- and post-production, and distribution as well as acting. Vancouver is the third-largest film and TV production centre in North America; according to CreativeBC, the industry brought over $2.4 billion to the provincial economy in 2021, providing over 65,000 jobs.
Key Takeaways (Industry Status?)
- Hollywood North: Foreign investment in production in Canada increased $286 million or 5% year-over-year to an all-time high of slightly more than $6 billion in 2019/20 – up 162% over the previous 10 years. Ontario and British Columbia together made up 68% of film production volume in Canada overall (Canada’s Film and Television Industry, Avison Young, 2020).
- Rebounding Growth: Although COVID-19 slowed job growth in 2019/20, as the industry added 244,000 jobs, a decrease of 5.4% YOY, job growth is expected to rebound (Canada’s Film and Television Industry, Avison Young, 2020).
- Good Outlook: The industry is likely to benefit from high demand for TV content, domestically and abroad. The ongoing fragmentation of TV audiences by consumption channel will further bolster the industry's negotiating power and expand the potential markets for its products (Film and TV Production in Canada, Shawn McGrath, 2021).
- Exchange Rate: The rate of foreign investment in Canadian production is inversely related to the strength of the Canadian dollar against the U.S. dollar, with investment rising as the Canadian dollars falls (Motion Picture Association of Canada, Profile 2020; Bank of Canada ; Statistics Canada, n.d.).
- Copyright Protections and Extensions: Advocating organizations like the Motion Picture Association of Canada are lobbying the government for copyright extensions that protect creative works and attract filmmakers to the country (Motion Picture Association of Canada, Government of Canada, 2021).
- Industry Trends: Future production levels look promising with streaming services like Netflix, Hulu, Amazon and more recently Apple and Disney+ having radically increased production output – challenging the traditional domain of studios and broadcasters (Canada’s Film and Television Industry, Avison Young, 2020).
Image by Frank Reppold from Pixabay
- Government Rebates: In British Columbia, the Film Production Services Tax Credit and the Motion Picture Tax Credit compose a suite of tax credits for production companies, strengthening Vancouver’s position as a filmmaking destination (Film Incentive BC, CreativeBC, n.d.)
Industry Performance Snapshot
During 2017-2023:
- Public funding accounted for over half the industry’s financing; this funding comprised a variety of tax credits, public broadcasting, and investments such as the Canada Media Fund (Film and TV Production in Canada, Shawn McGrath, 2021).
- In 2017, then-Minister of Canadian Heritage Melanie Joly announced the Creative Canada initiative, to support creators and deliver their content to domestic and international audiences. Its Creative Canada Policy Framework outlined the ways in which cultural industries are important to the Canadian economy and identity, as well as creating a set of principles around which the government of Canada could support these cultural industries (Creative Canada Policy Framework, Government of Canada, 2017).
- Though COVID-19 slowed job and production growth in the industry, families and individuals sheltering in place desired entertainment. Canada’s quick response to the pandemic and social distancing protocols made it much easier for many halted productions to resume principal photography in summer 2020 (Canada’s Film and Television Industry, Avison Young, 2020).
- Digital content presented various opportunities. The ease of manipulation and distribution encouraged companies to set up in-house distribution arms and bypass third-party material producer (Film and TV Production in Canada, Shawn McGrath, 2021).
- Media fragmentation became more pronounced than ever, with on-demand streaming services proliferating to create more channels for consumers to choose from than ever before (Film and TV Production in Canada, Shawn McGrath, 2021).
- Indigenous Canadians gained better representation on-screen with the Government of Canada’s pledge of $40 million to the Indigenous Screen Office (Canada’s Film and Television Industry, Avison Young, 2020), the establishment of Indigenous film celebrations like Simon Fraser University’s Skoden Film Festival (Skoden Indigenous Film Festival, n.d.), and educational materials such as the Vancouver Cinematheque’s Indigenous Voices study guide (Cinematheque, n.d.)
Industry Outlook
For the period 2023- 2027:
- Digital formats will continue to have implications across the media value chain as consumers turn to online channels, platforms, and streaming services, eroding distributor profitability (Film and TV Production in Canada, Shawn McGrath, 2021).
- Wages are projected to grow at an annualized 1.0% to 2026, totaling $2.8 billion, as workers in this industry operate increasingly complex technological land- and sound-scapes (Film and TV Production in Canada, Shawn McGrath, 2021).
- Agreements with growing players in the industry, such as Netflix’s deal with the Government of Canada to spend $500 million on productions over 8 years in return for tax incentives, will drive and offset uneven provincial tax credits (Film and TV Production in Canada, Shawn McGrath, 2021).
Business Locations
Vancouver is the third-largest film production hub in North America, behind Los Angeles and New York City. Over 400 productions are produced annually in the city. Vancouver also ranks as the world’s largest VFX and animation cluster, with more than 100 companies, and boasts the world’s second-largest VR-AR ecosystem (Canada’s Film and Television Industry, Avison Young, 2020).
Image by Brigitte Werner from Pixabay
Ontario boasts the largest share of production by province in Canada. The filmmaking industry employs a total of more than 30,000 Torontonians. (Canada’s Film and Television Industry, Avison Young, 2020).
Industry Trends and Challenges
High Competition and Volatility
With increasing market fragmentation as streaming services continue to produce and serve content to consumers on demand, more players are entering an industry previously low in concentration. This increases competition in this landscape, which may impede some independent filmmakers and producers or those just starting out (Film and TV Production in Canada, Shawn McGrath, 2021).
Digital Content
As mentioned above, the ease with which one can manipulate and distribute digital files narrows the market for third-party distributors. The added element of time-shifted viewing similarly poses a challenges to traditional advertisers even while it creates opportunities for consumers (Film and TV Production in Canada, Shawn McGrath, 2021).
Technological Innovation and Virtual Production
The market for virtual production services, including VFX, is projected to reach a value of $7.19 billion worldwide by 2029. This produces opportunities for the many VR, AR, and VFX companies in Vancouver, positioning the city’s already-robust film industry ahead of the curve (Virtual Production Market, NASDAQ’s OMX News Release Distribution Channel, 2023).
Cultural Industry Advocacy and Initiatives
Advocates of the creative industry in British Columbia continue to foster the cultural identity of the province and advocate for favorable conditions for cultural industries. For instance, Creative BC’s Creative Equity Roadmap, co-developed with Elevate Inclusion Strategies, educates and trains B.C.’s diverse and equitable workforce (Creative Equity Roadmap, Creative BC, n.d.).
Sources
Canada’s Film and Television Industry. (n.d.). Avison Young. Retrieved May 24, 2023, from https://avison-young-markets.foleon.com/ca-toronto/canadas-film-industry/home/
Creative Canada Policy Framework. (2017). Government of Canada. https://www.canada.ca/en/canadian-heritage/campaigns/creative-canada/framework.html
Creative Equity Roadmap. (n.d.) CreativeBC. Retrieved May 24, 2023, from https://www.creativebc.com/creative-equity-roadmap/
McGrath, S. (2021, November). Movie, TV & Video Production in Canada. CANADA INDUSTRY (NAICS) REPORT 51211CA / INFORMATION IN CANADA. Retrieved from IBISWorld database.
Film Incentives BC. (n.d.). Creative BC. Retrieved May 24, 2023, from https://www.creativebc.com/services/motion-picture-tax-credits/film-incentive-bc/
Indigenous Voices Study Guide. (n.d.). Cinematheque. Retrieved from https://thecinematheque.ca/assets/files/general/Indigenous_Voices_Study_Guide-reduced.pdf
Skoden Indigenous Film Festival. (n.d). Simon Fraser University. Retrieved May 24, 2023, from https://www.sfu.ca/skoden.html
Submissions: Consultation on how to implement Canada's CUSMA commitment to extend the general term of copyright protection. (2021, March 26). Government of Canada. https://ised-isde.canada.ca/site/strategic-policy-sector/en/marketplace-framework-policy/copyright-policy/submissions-consultation-how-implement-canadas-cusma-commitment-extend-general-term-copyright/motion-picture-association-canada
The film and episodic VFX market to create over $5 billion opportunity globally; adoption of AR & VR technology booming in the market. (2023, Mar 01). PR Newswire. Retrieved from ABI/INFORM database.
Virtual production market size worth USD 7.19 billion by 2029 | report by Fortune Business Insights: According to Fortune Business Insights, the global virtual production market size is projected to reach USD 7.19 billion by 2029, at a CAGR of 14.1% during the forecast period, 2022-2029. (2023, Jan 16). NASDAQ OMX's News Release Distribution Channel. Retrieved from ABI/INFORM database.