Vancouver didn’t become one of the world’s leading cities for Digital Entertainment & Interactive overnight – it’s a result of over 30 years of innovation, hard work, and unwavering entrepreneurial spirit. This is the conclusion of a 2 part series where our DE&I sector expert Nancy Mott recounts how the sector started, where it is now, and what the future holds. 

 

 

 

Q: You spoke in the first interview about the tremendous success of the Digital Entertainment and Interactive industry over the years – has it been continuous growth year over year?

Nancy: Like the rest of the world, we were hit hard by the economic crash of 2008. We are primarily a service industry and our industry’s clients were financially challenged at this time, so this had a big impact on business.

Q: How specifically did the crash impact us?

Nancy: On the Film and TV side, Hollywood studios stopped green lighting projects and even pulled the plug on projects that were already approved, which was extremely rare. This also affected the VFX sector, as many were tentpole movies with proposed large post-production budgets. At the same time, many US cities announced film tax incentives that were more generous than our provincial incentives. In response, some jurisdictions in Canada, like Quebec and Ontario, increased their incentives as well. As a result, there was more competition as studios had more choices and more ways to save money.

Q: Were all DE&I sectors impacted the same?

Nancy: The Games industry was also hit very hard. The majority of games studios, like Ubisoft and Electronic Arts, were foreign owned and creating console games that had 20-30 million dollar budgets. So when Quebec introduced their lucrative interactive tax credits, companies that needed to cut costs moved studios and work to Montreal, which resulted in enormous investment. This also impacted our talent pool, many of whom had to go to where the work was. The silver lining was that many senior employees and executives, who had families and did not want to pull up stakes, stayed in Vancouver and opened their own independent games studios, however these came with substantially lower salaries. The 17.5% BC Interactive Digital Media tax credit was introduced in 2010. Although it was too late to prevent the movement east of console game developers, and loss of hundreds of millions of dollars in investment and talent, it did support the growth of these newly formed studios.

Q: If much of the business left Vancouver, how did the new studios stay afloat?

Nancy: It was a tough couple of years. The independent studios were able to eventually take advantage of the opportunities presented by the rise in mobile devices. By 2010, there were a billion mobile devices purchased worldwide. Vancouver’s studios were poised to create content for these devices. Mobile content is a lot cheaper and less risky than console to develop. So there was an increase in smaller contracts awarded to independent studios.

Q: What does the Vancouver Video Games industry look like now?

Nancy: There has definitely been a rebound. For example, EA Canada is back up to over 1,000 employees and continues to work on the world’s most popular console games, such as NHL Hockey, FIFA and UFC. A large portion of work is still service oriented. This creates a steady stream of revenue that has now enabled our Vancouver studios to invest in their own intellectual property. We are definitely seeing growth in development and ownership of IP with our Vancouver companies, like Hothead Games, Klei Entertainment and Roadhouse Interactive. Creating and controlling IP enables our companies to reinvest and grow.

Q: How have other DE&I industries been doing since 2008?

Nancy: Post 2008, there were a few tough years for the VFX and Animation industries as well. We began recovering in about 2011, when we saw more film projects being green lit and global studios making the decision to establish in Vancouver. The tax credits were a critical component to that decision-making process, as well as our talent pool, which now included the high-end animators from Games.

Today, we are proud to say that we work on some of the biggest projects and now have the largest cluster of visual effects and animation studios globally.

Additionally, Film and Television have regained momentum, with the growth of the tent pole movies as well as the addition of new content creators and distributors, such as Netflix and Amazon Prime. We remain a destination for television production. That is our bread and butter. The MPA has just released a report about the economic impact of the Warner Bros. series “Supernatural” which has been filming in Vancouver for 11 seasons. It has directly invested $500 million into the local economy and created 9500 jobs. We are also seeing a rise of feature film production. World of Warcraft, Steven Spielberg’s BFG and Dawn of the Planet of the Apes were all filmed here. In 2015, this represents over $2bn invested in Vancouver and the rest of the province

Q: You mentioned Games are creating their own IP. Are we seeing this in domestic Film and Television industry?

Nancy: Film and Television production in BC is still primarily service work. However, we are noticing a trend in increased domestic production and IP ownership. Based on the latest statistics from CAVCO, British Columbia independent feature film production increased by 23% to a 10-year high of $65 million in 2014/2015. There are local producers doing great things on the world stage. Bron Media received several awards at this year’s Sundance Film Festival for their feature film, “Birth of a Nation,” and negotiated the highest distribution contract in the festival’s history with Fox Searchlight. This passion project was made for a global audience. The Vancouver Economic Commission would like to support more local producers who would like to start shifting from being primarily service providers to IP producers and distributors. Ultimately, we would like to be seen as not just a service hub, but as a world class production hub. We know we have the ingredients to achieve this.

Q: How can we help companies create more of their own IP?

Nancy: We need to study all of the distribution models. We’ve been focused on traditional distribution, such as feature film and television broadcast models. There are a lot of new distribution models out there now, from Vice to Netflix, so we need to look closely at where the best opportunities are for individual local content creators. Ultimately, keeping IP ownership in BC will help support a strong and healthy ecosystem. We also need to market our city to investors. Success stories like Bron Media are going to put the spotlight on Vancouver as a major production centre and target for investment.

 

Missed part 1?