With Hollywood in need of cost-effective programming as streamers begin to tighten their belts, local movie studio operators see an opening for Ontario as the major studios seek generous savings on currency and tax credit.
Ontario is expected to add an additional 2.3 million square feet of studio space over the next four years to its existing 3.7 million square feet of soundstages and production space. Amid speculation about whether the video streaming market is finally oversaturated, studio operators in and around Toronto don’t expect major streaming services to make major cuts in content spending — at least for the foreseeable future.
“Netflix, Amazon, Apple, they’re still in production. Filtering down [content] We didn’t feel any cuts,” said Paul Bronfman, chairman and CEO of studio operator Comweb Corp. THR amid talk of a fall in Hollywood spending just as the Toronto Film Festival kicks off.
“There’s a little more caution in the air, with what Netflix has been through for the streamers, a little more discretionary spending, but it’s not widespread in terms of deep cuts in production,” adds Rick Perotto, VP of business development at William F, come on. White International, supplier of soundstage and production equipment.
After Netflix recently posted its first subscriber losses and slower revenue growth, the video streaming giant said it would “backtrack” on “the growth in spending on both content and non-content.” This was followed by a series of layoffs and cancellations at HBO Max.
That sparked speculation in Hollywood amid Peak TV, and an arms race for streaming spend would tighten the belt across the industry. Karen Thorne-Stone, president and CEO of Ontario Creates, which markets the Los Angeles province, says the Ontario industry is taking the current disruption to the streaming business to heart.
“Change and evolution in this industry is a constant. What is important is that our services are structured in such a way that we can adapt and be flexible,” she explains THR. Thorne-Storne adds that Ontario will continue to zigzag in response to changing industry conditions.
“Our value proposition is strong enough that anyone who creates content will come to Ontario to do it because of the extraordinary talent we have, because of the incentives that are competitive and improving, and because we are responsive and agile,” she says.
That Ontario industry flexibility includes the province that forecasts to add an additional 2.3 million square feet of studio space over the next four years to the existing 3.7 million square feet of soundstages and production space.
“What’s exciting is that a large amount of stage space is being built in the greater Toronto area and beyond,” added Ontario Film Commissioner Justin Cutler. Cutler points to 54 live-action projects currently being shot in Ontario, a record for the local manufacturing sector.
To future-proof the provincial industry, Ontario Creates is at the forefront of training and hiring production staff and behind-the-scenes talent. “I know our unions and guilds are taking this seriously and have launched a number of outreach programs,” Cutler said.
Given the growing studios, local players are seeing major studios and streamers return to Ontario for stability after filming elsewhere around the world. “They’re going back to core markets, and Toronto is one,” said Eoin Egan, COO and co-managing partner at Cinespace Studios.
That means local production crews and creatives move from project to project to meet the demand from US producers to shoot locally. “A lot of line producers have been working back-to-back, which is great, and so are a lot of department heads. We see that trend continuing,” Egan added.
And as Hollywood streamers keep piling up content to keep subscribers, local studio operators are finding themselves spending more sensibly. “Better shows are coming,” said Michael Cerenzie, CEO and founder of Stratagem Studios. “There will be more discretion. That’s a good thing.”
Jason Ross Jallet produced actor-filmmaker Avan Jogia’s directorial debut and neo-noir thriller door mouse, starring Hayley Law, in Sudbury. He argues that new movie studios in northern Ontario are needed to move bigger-budget Hollywood projects north, far beyond Toronto.
“As the Ontario industry gets busier and busier, [greater Toronto] studio space is getting wider. There is great potential in Northern Ontario and that would add to the appeal of what we do,” Jallet said. THR.
Another potential growth opportunity for Toronto may come from increased production of tent pole features, which has shifted more to Vancouver in recent years as Ontario geared up for TV production.
Hollywood, meanwhile, will continue to come to Ontario for currency savings and generous tax breaks. “Those two things will continue to keep us in a good position,” said Peter Apostololos, president of TriBro Studios, of the low Canadian dollar and tax breaks.