[ad_1]
While most industries are bracing for an economic slowdown with rising interest rates, Hollywood is experiencing an ongoing boom and its Los Angeles production hub has reached spillover levels.
The video streaming revolution has unleashed a wave of big-budget TV and film productions that mostly pile on top of existing Hollywood output and are the catalyst for expanding local soundstage infrastructure.
The Los Angeles area leads the world in soundstage capacity, with 5.4 million square feet of stage space, outpacing competing production centers: 4.7 million square feet across the UK, 3.3 million square feet in Toronto/Ontario Canada, and 2.4 million square feet in Canada Ft. New York. In Los Angeles, there are 398 studios in 57 facilities, according to FilmLA, a nonprofit production licensing agency.
The focus is on “certified” soundstages, which are permanent Hollywood installations with fire department approval, rather than multipurpose warehouses that require security approvals
Every use of movies and TV shows. Earlier this year, FilmLA estimated that a large number of buildings under construction or in the pipeline would increase the number of certified soundstages by 27% within a few years, in what the industry sees as a long-overdue expansion.
In Hollywood, “the soundstage has been under-built for years,” said Adam J. Fowler, a founding partner at CVL Economics, a West Hollywood consultancy active in the entertainment sector.
But now “we have a lot of industrial space that is being repurposed,” he added. According to most estimates, the sound field occupancy rate for the entire area is around 90%, which is basically full capacity.
lack of land
Due to the scarcity of vacant lots, a construction boom in the historic Hollywood workspace is targeting infill sites within the downtown area.
One such project looking to capitalize on growing demand is a studio program at the 8th and Alameda Street locations at the Los Angeles Times Printing House. Atlas Capital Group plans to start with six studios and eventually expand to 17 on-site
Also in the traditional workspace, a massive upgrade of the existing soundstage facility is underway.
Carl Muhlstein, international director at brokerage JLL, said the “biggest move remains the city-fill campus in traditional Hollywood production districts”.
“These are the heart of the ecosystem and the easiest places to interact with talent.”
But due to high demand and lack of space, companies are expanding from traditional areas to areas like the Santa Clarita Valley, Pacoima and even the Inland Empire. New ventures continue to infiltrate; in early October, Banning proposed a multi-sound stage facility called Super Studios.
Experts agree that there is little concern about overbuilding, as production needs are ongoing. As a major Hollywood TV series, it can be rented for years or even decades in the same studio for a long time.
One measure of the growing size of productions is that Los Gatos-based Netflix Inc.’s programming budget is heavily skewed toward originals, but also includes acquisitions of existing content, which now soars to $17 billion a year, About double the overall content budget in 2016.
Basic cable channel operator FX Networks now counts more than 500 big-budget, scripted prime-time TV series a year, up from 182 in 2002. FX Network publishes output figures for industry TV series annually.
The numbers are global, but Los Angeles accounts for a large portion. On the streaming side, these include streaming TV shows such as “Star Trek: Picard” on Paramount+ and the locally produced “American Horror Story” anthology on Hulu. Sound fields are also used in the production of music videos, commercials and industrial films.
private equity
Private equity firms – purely financial investors – are spearheading the construction and upgrade of soundstages, lured by an industry with strong production rental demand but insufficient infrastructure. They also focus on the industry’s fragmented operators and the expectation of an easy exit as one or more players acquire competitors to gain scale.
The biggest in Los Angeles appears to be Hackman Capital Partners and its MBS, which owns Culver Studios, Radford Studio Center, Television City Studios, MBS Media Campus, Raleigh Studios, Saticoy Studios and Sony Pictures Animation Studios. New York-based Square Mile Capital Management works with Hackman in the studio. Earlier this month, Hackman closed a $1.6 billion funding round from diverse institutional investors for its HCP Studio Fund. The HCP Studio Fund has a global focus, but will connect locally to Radford Studio and Saticoy Studios.
Last year, Hackman unveiled a $1.25 billion investment to upgrade TV City, a facility it bought in 2019 and was previously owned by broadcaster CBS.
leader
Despite chronic underinvestment in infrastructure, Los Angeles is well-positioned to maintain its lead in TV and film production. That’s because the industry’s ecosystem is anchored in the Hollywood area, led by five major movie studios: Walt Disney Studios and Warner Bros. in Burbank; Paramount Pictures Hollywood; Sony in Culver City Film and Television Entertainment; and Universal Pictures.
Their own brick-and-mortar studio produces a lot of productions and provides convenient logistical support for TV and film projects they produce in nearby studios. Executives don’t have to fly to the set if the production requires in-person inspections.
Another draw is California’s fiscal incentive program, which provides hundreds of millions of dollars in tax credits each year, and is authorized through 2025 and may be extended. California launched the program in 2009 to combat financial temptations in other states.
“The stool has three legs: incentives, staff and infrastructure,” said Hollywood treasurer Joseph Chianese. “Los Angeles obviously has staff. Infrastructure is being upgraded. In terms of incentives, state and The governor has clearly been improving the program, and it has bipartisan support.”
Chianese is Senior Vice President and Head of Production Incentive Practice at Entertainment Partners, a Burbank-based production financing, management and corporate services firm.
While there is a lot of positive economic momentum in the entertainment and streaming industries, some in the industry have complained that the government has put up unnecessary barriers. Some have complained that state and local governments are more concerned with supporting other programs, such as affordable housing, than helping big Hollywood employers fight government red tape. In addition, California has occasionally considered legislation to weaken employment contracts and talent exclusivity in the gig economy that covers part-time workers, annoying many in the industry.
The production boom has pushed up wages, and Hollywood is now talking up the idea of curbing the rising cost of content.
In terms of rich content spending, Netflix reportedly paid $465 million for Daniel Craig’s “Glass Onion: Mystery of the Knife” (and sequel rights), while the production of its predecessor The cost is only $45 million.Elsewhere, Amazon Studios spent
The report said its “Lord of the Rings: Rings of Thrones” miniseries cost $465 million, double the cost of a Hollywood sci-fi blockbuster. Streamers often hire expensive theatrical talent to produce productions made for streaming, such as The Irishman, the $170 million mafia movie driven by Martin Scorsese, Its cast is huge. Competitive pressure to drive spending remains intense, however, so Ari Emanuel, CEO of Beverly Hills-based Endeavor Group Holdings Inc., which owns talent agency WME, said at an investor conference in September: “Don’t break any Man’s bubble, I don’t see it. “
For an untitled streaming show produced by WME, the cost per episode reaches $17.5 million, about four times the cost of a typical hour-long cable or broadcast TV show, Emanuel said.
“Last time I checked, more,” Emanuel said dryly.
Hollywood has some real spending cuts, though. Major studio owner Warner Bros. Discovery is pursuing post-merger cost cuts, but sporadic cuts are the exception to the larger trend of escalating.
Philip Sokoloski, Vice President of Integrated Communications at FilmLA, believes the current boom in soundstage is critical to staying ahead of the curve in the region. An analysis by FilmLA found that since 2019, certified soundstage square footage capacity in the Los Angeles area has grown by just 4%, compared with 34% in the U.K. and 43% in Toronto/Ontario, Canada.
“If we don’t invest in modern soundstage infrastructure, we’re not going to attract the kind of projects we want,” Sokoloski said. “We require them to be globally competitive.”
[ad_2]
Source link