Stagnating production sector feels effects of contracting broadcast industry

Like debt-ridden converged broadcasting companies and the struggling digital specialty television channels, the film and television production industry is beginning to feel the pinch of a downturn in global markets and a drive toward inexpensive programming. Things are apt to get worst this year, by many accounts. "Indications are that production will continue on the downturn. Things have gotten worse this year," Pat Fern, president and CEO of the Banff Television Foundation, tells Canadian Communications Reports. He gave an overview of the state of the film and television production industry as revealed in the report Profile 2003, which was released at the Canadian Film and Television Production Association (CFTPA) conference last week. For the first time in a decade, the volume of film and television production in 2001-2002 did not increase, according to Profile 2003. Film and television production in the 12 months ended March 2002 remained at $5.1 billion, the level achieved in the same period a year earlier."There is no doubt that the Canadian independent production industry has recently been facing some harsh realities," CRTC chair Charles Dalfen noted in his address to conference delegates. He joked, "In fact, when I look at the titles of some of the American reality-TV shows, I feel that they might carry a certain resonance for you who work in this industry. Survivor. Fear Factor. Worst Case Scenario. Who Wants to Be a Millionaire." He pointed out that revenues were also flat for private English-language conventional broadcasters based on preliminary figures in the annual reports filed by broadcasters to the CRTC. "So were the amounts spent on Canadian programming. Profitability was down," he noted. "The picture looks better for the English analog specialty channels…Notably, they are buying more and more product. But overall, the tough times for production do not seem to be over." As a result, the mood at the sold-out, 600-delegate CFTPA conference was somber. Catherine Tait, founder of New York-based entertainment company Duopoly, moderator of a conference session on market trends and trade policy, resorted to urging panelists to try to be positive and to discuss opportunities and imaginative solutions. Yet, she opened the panel by listing off a slew of negative developments: a declining stock market, collapsing media giants, decreasing international sales, huge declines in the price paid for documentaries, a trend toward broadcasting old work rather than commissioning new shows, and a rise in reality television. Patrick Whitley, panel member and chair of the CFTPA’s industrial relations committee, urged the sector to pay more attention to foreign location production, which makes up about 35% of production activity in Canada. With more countries vying for Hollywood location shooting dollars, he urged Canada to improve its infrastructure and tax systems as well as boost marketing efforts to better compete with Australia, Eastern Europe and South Africa. "We are guilty of complacency and greed," he said. "Producers here thought that the U.S. producers would just continue to come here regardless." In a year of suppressed Canadian film and television production, foreign location television and film shooting also dropped slightly. It was down $2 million to just under $1.8 billion in 2001-2002 from the previous year, according to Profile 2003. The decline followed an increase in foreign location shooting of 17% in 2000-2001 and 37% in 1999-2000. "(Attracting foreign location shooting) has become more competitive than it has been and other people watch what Canada does, so I think it’s going to be tough. Some of the noise last year obviously helped the case of the Americans," CFTPA president and CEO Elizabeth McDonald tells CCR. "But I also feel the tax incentives were not as attractive as they were." She says that the CFTPA along with the unions and guilds have a proposal to simplify tax credits before the Department of Finance. "The proposal is to make the Canadian tax credit and the service tax credit work better. We’re absolutely united with the unions, the guilds and the American studios on the proposal," she notes. "It’s just a question of the government responding. Under the proposal, there would still be two tax credits but they would operate more similarly so that they would be more efficient." Ferns says foreign location shooting has been further cut back this year. "The administrative costs in Canada are probably higher than elsewhere, so we’ve got to get our act together and simplify and sort that out," he states. "You have to do so many different deals with so many different agencies in Canada…In other countries, it’s one-stop shopping." Foreign location television production in Canada grew by 8% to just over $1 billion while foreign location film production declined 10% to $737 million in 2001-2002 from the previous year, according to Profile 2003. The report also indicates that Canadian productions certified by the Canadian Audio-Visual Certification Office (CAVCO) declined 3% to just under $2.1 billion. In other bad news, the value of exports of Canadian film and TV productions declined by 14% to $2.3 billion. Nonetheless, direct and indirect jobs in the industry were up slightly in 2001-2002, rising to 137,800 from 134,400 in the previous year. "The industry is still a healthy one, but there are some trends which I find disconcerting, particularly the downturn in English-language drama, children’s programming, and the increase in in-house production by the broadcasters," McDonald says. (See story on pages 3 and 7.) Profile 2003 was prepared by Nordicity Group Ltd. for the CFTPA. It is the seventh annual edition of the report.

Stagnating production sector feels effects of contracting broadcast industry

News | 02/13/2003 5:00 am EST

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us