New York Production Weathers Production Slump With Incentives Increase But Future Still Looks Rocky

As someone who has spent years observing and analyzing the ever-changing landscape of the entertainment industry, I find myself intrigued by the recent shift from a seller’s market to a buyer’s market, as described by Hal Rosenbluth, president of Kaufman Astoria Studios. This transition is a testament to the dynamic nature of this industry, where demand and supply constantly dance in an intricate waltz.

Despite nationwide slowdowns due to budget cuts, potential strikes, and reduced new productions in 2021, New York continues to outperform other regions of the country.

Production rates across the state are approximately 75% of what they were in 2022, when comparing all scripted TV and film projects with an estimated budget of $10 million or more that started between January and July. However, it’s worth noting that this figure is notably higher than the rest of the U.S., which is currently at around 60% of its 2022 production levels. This observation was made by Alexander LoVerde, co-founder and CEO of ProdPro, an industry intelligence platform. In essence, these statistics demonstrate New York’s remarkable resilience amidst a difficult market scenario.

One major factor behind this is the enhancement of the state’s incentive scheme. Last year, tax credits for eligible costs rose from 25% to 30%, with an extra 10% in numerous upstate counties. Furthermore, certain wages above the line were taken into account, the annual budget grew from $420 million to $700 million, and the program was extended until 2034.

Despite the challenges posed by COVID-19, strikes, and production pauses, the world of cinema continues to experience its fair share of highs and lows. Interestingly, data from the NYC Mayor’s Office of Media & Entertainment (MOME) indicates that the number of city permits for public property shoots in April 2024 came remarkably close to pre-pandemic levels seen in April 2019 (827 vs. 900). However, a recent dip has been observed in August, with permit numbers dropping by a significant 41% compared to what they were five years ago (616 vs. 1,050). As a devoted movie enthusiast, I’m eagerly watching this rollercoaster ride of the film industry and hope for its continued growth and recovery.

One issue is that an increasing number of projects are being produced abroad because of labor instability. This predicament is what writer-director-producer Oren Moverman is currently grappling with, despite having completed 14 projects in New York. To secure funding for three new ventures, he’s had to seek financial backing from Germany, Japan, and the U.K., and film outside of the United States. As he puts it, those regions are likely the most favorable when it comes to financing such projects.

Despite some projects picking up speed, there’s been a substantial decrease in new series orders compared to the high point between 2021 and 2022, as mentioned by LoVerde. This reduction is due to streaming platforms and networks scaling back on content production, which is a response to Wall Street’s increased focus on profitability rather than subscriber growth. From 2015 to 2019, content spending skyrocketed as streamers were expanding their audiences, but the COVID-19 shutdown in 2020 disrupted this pattern. The need for original content saw a resurgence in 2021 with the arrival of new streaming services, but this trend began to change in 2022 following Netflix’s missed subscriber targets in Q2, leading investors to prioritize profitability over growth.

By early 2023, production levels had dropped significantly more than ten percent, and the strikes further sped up the reduction in investment on content. In 2024, cancellations and tighter approval procedures have become commonplace.

As a movie enthusiast, I’m thrilled to share that Bungalow Projects and Bain Capital Real Estate are set to expand the cinematic landscape of New York City! In the vibrant districts of East Williamsburg and Red Hook, Brooklyn, we can expect brand-new studios to rise in 2025. These studios will welcome filmmakers by the second quarter of 2027, adding another exciting chapter to the city’s rich film history.

The studio known as Wildflower Studios, led by Robert De Niro, officially opened in September. Recently, an episode for a series was filmed within its premises, and various parties are currently exploring the possibility of leasing its soundstages. As the last threat of a strike has been resolved, managing partner Adam Gordon anticipates increased production activity. However, he acknowledges that numerous factors need to fall into place before this can happen.

The adjacent property to Wildflower on the Queens waterfront is Borden Studios, slated for a debut by the end of this year. According to Innovo Property Group’s principal, Graham Stephens, the developer is finalizing the facility with some remaining touches. As stated by MOME commissioner Pat Kaufman, these new soundstages represent an investment in the film industry that New York City is making. “Filmmakers have shown interest in shooting here already,” she notes. “We are optimistic that increased production will take advantage of these soundstages due to several factors, such as expanded state tax credit, simplified filming process, and a growing workforce.

However, conversations with local filmmakers and industry leaders paint a less optimistic scenario this year. Hal Rosenbluth, president of Kaufman Astoria Studios, explains, “While New York’s production industry infrastructure remains robust, it seems to have shifted from a seller’s market to a buyer’s market.” In simpler terms, there are now more shows competing for studio space in the tri-state area compared to before, when all studios were fully booked. The future direction of this trend as we approach the new year is uncertain, according to Rosenbluth.

Doug Steiner, proprietor of Steiner Studios, currently running at around 80% capacity, commented, “Following the writers’ strike, our bookings picked up incredibly quickly. However, we’re now beginning to see a decrease from that initial surge of pent-up demand. Things are somewhat sluggish in New York right now. The shows we’re receiving have fewer episodes and there’s an increase in limited series, which represents quite a shift.

He’s opening up his 30 Brooklyn stages to keep things busy. “We’re pretty nimble on filling our space, whether it’s commercials, music videos or concert rehearsals. [But] I think there’s going to be more battling between New York and New Jersey, which is getting a lot of location work now.”

Robert Halmi, owner of Lionsgate Studios Yonkers, stated, “Approximately 1,500 productions have been commissioned this year, but many have been dispatched to the U.K., Canada, and other locations due to potential strikes. As a result, we’ve seen very few new shows requiring space in the first half of the year. However, things have significantly improved since then.

Nevertheless, he notes that several productions are contemplating delayed premieres because of the Thanksgiving and Christmas holidays. “Things aren’t quite as they were prior to the strikes, but they’re improving each week,” he says.

For producers seeking cost-effective options, it’s important to note that competition among facilities such as Steiner, Kaufman, Silvercup, and the latest Wildflower might lead to increased price negotiation. This is according to a facility manager’s perspective.

New York Production Weathers Production Slump With Incentives Increase But Future Still Looks Rocky

Chair of Post New York Alliance, Yana Collins Lehman, stated that following two hectic years, a sudden decline occurred in January 202X in New York’s post-production and VFX sector due to potential strikes by IATSE and Teamsters. This decline resulted in job cuts, temporary layoffs, and consolidation throughout the state. In 2010, her organization advocated for tax incentives in post-production that have now increased to 30% in the city and 35% in the state. Currently, they are lobbying for further modifications to these credits, which she anticipates will be implemented “in the upcoming year.

In addition, New York presents numerous budget-friendly opportunities for production. According to Lucien Harriot, president of Mechanism Digital, artificial intelligence is significantly expediting our processes while reducing costs, which has led to an influx of indie films in New York for us to collaborate on.

Due to the increased tax credits, it proved more cost-effective for a Netflix series producer (Alex Saks of Saks Picture Co.) to accommodate stars and crew upstate, rather than having them travel from the city on a daily basis. This was first observed in her 2002 low-budget, non-union horror thriller “Baby Ruby.” However, for her Jennifer Lawrence-led comedy “No Hard Feelings,” produced in New York City, she also benefited from the assistance provided by MOME’s concierge service. In fact, Alex had to relocate and obtain permits to shoot within 24 hours at least half a dozen times. Fortunately, arrangements were made to facilitate these changes.

To Kaufman, it sounds like wonderful news. “We’re blessed with excellent infrastructure that’s expanding,” she explains, mentioning Sunset Pier 94 Studios in Manhattan, the Sunnyside campus of East End Studios in Queens, and a number of other projects under development. In addition to these new tax incentives, her approach is simply, “If we build it, they will come.

2024-10-04 21:17

New York Production Weathers Production Slump With Incentives Increase But Future Still Looks Rocky

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