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Demand for Regional Studios and Virtual Production Facilities in New Zealand

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DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND A STUDY OF DEMAND FOR SMALL AND MEDIUM SIZED STUDIOS AND VIRTUAL PRODUCTION VOIDS IN REGIONAL AREAS OF NEW ZEALAND. FELICITY LETCHER FOR NZTE, JUN 2021 0 | P a g e DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND CONTENTS Executive Summary 1 A Guide to Regional Studio Development in 3 New Zealand Sources of Demand 6 Commercial Considerations 20 Studio Development Design 26 Virtual Production – A Tool of the future 30 Regional Specific Development Opportunities 35 Conclusion 38 Appendices 39 Resources and Studies 57 DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND EXECUTIVE SUMMARY INTRODUCTION • Locations that can be easily accessed within an hour of the proposed studio This study expands on the Olsberg NZ Film site. • Regional Government support for Studio study and focuses on the demand studios and the screen sector. for small and medium sized studios and • Creative economy and production virtual production voids (alternatively companies already operating called volumes or stages1) in regional successfully in the region. areas of New Zealand. • Crew who are living and available in the region. The proposed audience for this study is • Business supplies and support in both investors – including private corporate and industry specific and general support individual investors, iwi, regional and local are available in a region. councils who are interested in becoming • Focus and client base for the studio in a region is built off the factors above involved in small and medium sized studio and works closely with other studios development, particularly outside of being developed regionally and in the Auckland and Wellington. main centres of Auckland and A survey was conducted as part of the Wellington to provide a cohesive study which included interviewing a range studio network in New Zealand. of screen sector practitioners in New The study found that there is a great Zealand and internationally. This survey, interest in filming more regionally and alongside research and data from recent basing productions in regions if studios studies from other agencies has been were available. The regions that exhibited used to draw a picture of demand in strong response to the above factors and regional areas. interest from the survey were: Demand is growing for content • Bay of Plenty/Rotorua internationally and within the New Zealand • Christchurch domestic market. This demand has • Dunedin resulted in an increased need for studios • Queenstown for production activities. Studios in Auckland and Wellington have The study concludes that there is demand historically been warehouse refurbishment for regional studios in certain areas of New and have developed alongside strong Zealand which are already exhibiting key production slates or pipelines. In factors required for investment in studios to Auckland, the studio development has be successful. These factors include: been limited to stages only with ecosystems developing organically • Evidence of activity currently around these facilities. In Wellington, the happening in a region on an ongoing studios also house creative and basis with a mix of domestic and line equipment suppliers that are either production projects. independent or closely associated with 1 Virtual Production spaces are called either space in which LED screens and cameras are void or volume but refer to the physical stage used to capture performance. 1 | P a g e DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND the studios. Increasingly studios are now their pace with these developments. being purposed built in the main centres. Virtual Production including LED virtual Regional studio development may require production voids is accelerating in the a different, more deliberate approach post Covid environment internationally, that uses a mixed model of revenue, in with most traditional main screen centres order to help de-risk the investment for the such as London, Vancouver and Los investors and develop the screen sector in Angeles setting up stand-alone LED the region. To assist this, the study also studios. The study found that there is a recommends the development of real great deal of interest in virtual production time current production overview that can through the screen sector in New Zealand be viewed by all stakeholders in the sector and internationally. The demand in New and cover both domestic and Zealand is for the establishment of stand- international productions. This will enable alone voids in Auckland and Wellington. better decision making at production and The study also found that the regions investment level for the whole sector. should have the capability available to set up a modular Virtual Production studio if The study found that Virtual Production is a required. However, the overwhelming growing methodology internationally that requirement was for stage space and uses a range of tools to help support and accompanying production support in the streamline screen production. Many of the regions. tools have been developed in New Zealand over the years and it is important that New Zealand continues to keep up 2 | P a g e DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND A GUIDE TO REGIONAL STUDIO DEVELOPMENT IN NEW ZEALAND • A list of criteria that investors should use SPI Olsberg produced a study entitled to assess a region and its ability to New Zealand Film Studio Infrastructure support a studio development. Study (Olsberg NZ Film Studio) for New • An overview of potential studio models Zealand Trade and Enterprise (NZTE) on that would de-risk an investment in 22nd July 2020. The study was “a robust regional New Zealand. overview of production demand and • An overview of virtual production, and studio supply in New Zealand.”2 It included the responding demand for virtual looking at six key elements with regards to production facilities (virtual production voids) in regional New Zealand. the development of production facilities in New Zealand: PARTICIPANTS FOR THE STUDY 1. An overview of the global film industry. 2. Information on studio supply and In the survey conducted for this report, line demand in New Zealand. producers, producers, production 3. Analysis of key drivers in attracting companies, screen organisations and production, and New Zealand’s studio owners were interviewed about competitive edge. trends they had noted within the industry, 4. An overview of other critical strategic both domestically and internationally. issues information on success and risk factors in relation to studio facilities. Those surveyed came from line 5. A generic studio business plan. production, producers of TVC, TV, film, 6. Comparable case studies. gaming, E-Sports and online content. Regional film offices and studio operators This study provides potential investors with: in Auckland and Wellington were interviewed, and a total of 65 companies, • A background to the current demand made up of active users of producers and for content and studios in post Covid associated screen influencers sector – both internationally and participated. The interviews took place in domestically. person between January and March 2020. • An overview of New Zealand screen There was an online survey for those who funding and activity in the regions in were unable to speak to interviewers the last two years. directly due to production constraints. We • A summary of demand for small to medium size studios as assessed by this have in all cases kept comments study. anonymous.3 The survey is noted • A breakdown of interest in using a throughout this study as the NZTE Regional studio in regional areas as assessed by Studio Demand Survey 2021 (RSD 2021 this study. Survey). 2 SPI Olsberg – “New Zealand Film Studio 3 NZTE Regional Studio Demand Study 2021 was Infrastructure Study” ,22 July 2020 pg. 4 run by Felicity Letcher. (RSD 2021 Survey). Questions were compiled by NZTE and NZFC. 3 | P a g e DEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND This study focuses on productions and users that would use small to medium sized stages; determined to be T3 and T4 THE RHYTHM AND VISABILITY productions with studio sizes as a guide of OF DEMAND less than 500m2 for small studio and 500 – 2000 m2 for a medium studio. Forecasting demand in the screen sector is extremely difficult. It is governed by external factors such as: QUANTIFYING DEMAND • Funding rounds for NZOA, NZFC and TPK as no activity can happen before Demand is the most difficult issue to funding is confirmed. Projects are also quantify in the New Zealand screen sector. unable to commit to a timeline before The Screen Industry Survey conducted by they receive funding. Stats NZ was discontinued in June 2019, as • Seasons and time of year often dictate the sector began to grow significantly due when a domestic and line production to Amazon and Netflix Originals starting can film as we provide the opposite production in Auckland. This means there weather to the Northern Hemisphere. This often means that the bulk of TVC, is little retrospective data for the past two feature and TV production film during years that can illustrate growth. the summer months is location dependent. This leads to a heavy For this study, the following data was used consolidation of filming during the to determine demand trends: October to May period. • Feature films and television productions • Regional Film Offices permitting data coming in from offshore usually come for the past two years where available. to scout 3 – 4 months in advance of • Regional Film Offices enquiry records production starting. Once a scout has as at March 2021 indicating what been done, they will then confirm the production companies are looking for. production, location base and start • Compiled regional funding figures from crewing from there. This pre-pre- NZ On Air.
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