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
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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
site.
This study expands on the Olsberg NZ Film
• 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
1Virtual 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.
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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|PageDEMAND 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.
• A summary of demand for small to
directly due to production constraints. We
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|PageDEMAND 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. production period can last as long as
• Compiled regional funding figures from 16-20 weeks, to as little as 4 weeks.
New Zealand Film Commission (NZFC). • TV commercials have shorter
• Indication of attraction interest from timeframes from pitch to shooting,
NZFC. sometimes a matter of days, at most, a
• One-to-one interviews with 65 screen couple of weeks.
sector producers, line producers and
company directors from New Zealand, As a regional film office stated during the
Australia and the United States. course of this work:4
“(Local producers…) reiterated that
their pipeline is very difficult to
demonstrate and that all of this is
subject to change, and that they don’t
often know anything more than a few
weeks or a month or two in advance.”
4Quotes RSD 2021 Survey. Conducted in
person and online from January 2021 – March
2021.
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“Demand is elastic. Demand is linked main screen centres – Auckland and
closely to availability and to supply. If Wellington – as well as regional activity. It
there is no availability or supply and this would provide a spotlight on areas that
is a well- known factor by clients then
are increasing in popularity for filming,
there is no demonstrated demand.”
provided that those regions do have a film
Other respondents said: office with substantive proof of activity
(up-to-date and historic), and for regions
“There is no planning for the industry.
looking at establishing a film office, the
Why isn’t there transparency – if work is
data to back this business case.
coming in from internationals, why
can’t we talk about it? Everything gets A real time pipeline overview is
held very close.” fundamental in assessing demand for film
The industry tends to work informally studios outside of Auckland and
sharing ad hoc information about Wellington.
productions in a region or a studio, so that There is a real financial risk in building
the industry knows if it needs to start studio bases, which explains why none
looking elsewhere. However this system is have been built outside of Auckland and
informal and relies on one to one Wellington. There is a saying in the screen
information sharing which is increasingly sector internationally (and was iterated
inefficient given the amount of activity many times by the studio participants) with
that is now taking place in New Zealand. regards to building studios: “Build it and
they will come...” This saying
This study has highlighted the need for a
encompasses the difficulty in being able
New Zealand national “current production
to quantify demand for a stage or facility
overview similar to that published by
prior to it being built. The reality is that,
Creative BC. 5This weekly update provides
according to those studio owners and
the various stakeholders including studio
developers interviewed for this study, it is
owners, production companies, crew and
more complex than it seems.
suppliers with information that is needed to
make current financial and investment Failed studio developments in areas such
decisions. as Qingdao (China), Alicante (Spain) and
Syracuse (New York State) show that this
The lack of this kind of “single source of statement is too simplistic and does not
truth” means that there is a lack of visibility take into account of the complex nature
regarding what production is happening, of the sector, the timelines that it operates
when and where, and would clearly on and the level of income needed to de-
illustrate the actual activity levels in the risk an investment of this scale.
5https://www.creativebc.com/crbc-
services/provincial-film-commission-services/in-
production
5|PageDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
SOURCES OF DEMAND
MULTIPLE SOURCES OF Rubberband and Human Dynamo provide
a cluster around the studio site in Miramar
DEMAND AND USE OF STUDIO
– again all based in one place. Avalon
SPACE Studios is in Wellington and was built in the
1970s as the home of NZ Television
The development of regional studios
Broadcasting employing some 800+
cannot be viewed purely through the lens
people for many years. In 2013 it was sold
of a “Greenfields real estate” investment,
by TVNZ to private ownership, and more
such as a hotel or even convention
recently is focused on supporting NZ
centres. It is essential to look at the
producers as well as servicing a wide
different key factors that investors identify
range of international Film and TV
in a region when they are considering
productions. It also has a range of industry
developing a studio complex outside of
businesses on its premises offering a range
Auckland and Wellington. This report aims
of film production support services.
to reframe the lens through which a studio
investment should be viewed, the possible In Auckland, screen service companies
model for operating that will allow for have clustered around these studio sites to
multiple income streams to de-risk the provide an ad-hoc eco-system such as the
studio venture, and the central one that exists in Henderson West
importance of partnerships at a local and Auckland. When it was first developed,
international level for the success of the Auckland Film Studios had smaller film
investment. supplier tenants on site, which helped it to
provide support for incoming productions.
Studios that have been developed in
However, this ended as productions
Auckland and Wellington have been
became larger, and the demand for
created as standalone stages available
space increased.
for dry hire. Workshops and offices have
been assembled from pre-existing spaces The various studio spaces in Auckland
with singular production requirements in created from repurposed warehouses
mind. Stone Street Studio has been have been built on the back of television
developed with large feature films as the series repeat production cycles, with
pipeline, largely led by Wingnut Films and multiple producers and production
Pukeko with key associated suppliers Park companies.
Road Post, Weta Digital and Weta
Workshop. Other smaller suppliers such as Some historical examples of this are:
STUDIO BUILDING USE PRODUCTION
South Pacific Pictures Purpose built and Shortland Street,
(500m2, 700m2, 1500m2 stages, repurposed warehouses Outrageous Fortune,
production offices, mill and workshops) Westside, Broken Wood
Mysteries
Studio West Repurposed warehouses Power Rangers
(510 m2, 700 m2, 700 m2 stages, production
offices, mill and workshops)
Walls Road complex Repurposed warehouses Ash Versus Evil Dead. The
(2348 m2, 2358 m2, 2324m2 stages) Luminaries
Crown Lynn Repurposed warehouses Screentime productions
including The Gulf
6|PageDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
(approx. 1500 – 1700 m2 of office and
stage space)
Auckland Film Studios Repurposed warehouses Xena Warrior Princess, Jack
(1924 m2, 868 m2, 784 m2) and one purpose-built of All Trades, Legend of the
studio Seeker, Shannara
Chronicles
Once a television production has been REVENUE STREAM ONE:
“birthed” past the pilot and first season, it is
then often guaranteed longer production Leases for Media and Entertainment users,
runs. For example, The Brokenwood including those providing services to
production company tenants. These could
Mysteries, which started production in
include office space for production, content
2014, is now on season seven and
and screen companies, hot-desking for
broadcasted in seven different territories. creatives including directors and smaller owner
The last 17 seasons of Power Rangers have operator production companies,
also been produced in New Zealand since entertainment lawyers and accountants. It
2002. Such production streams can could also include “lock up space” for gear
provide solid pipelines of activity for that could be kept on site or near production
production and studio complexes. stages by Auckland and Wellington suppliers.
These would have more traditional office lease
structures, giving support and recurring
Another example is the studio campus
revenue streams for the campus.
model that is used more overseas in Los
Angeles, New York and Atlanta, which
It can also include creative tech companies
could be considered for regional studio such as animation, AR/VR and gaming. This
development. A studio campus encourages services and creative companies
development needs to be seen as to congregate in one area, and an ecosystem
separate and different to a real estate to be supported and developed. Click Studios
development for warehousing and offices. is developing along this model in Auckland6.
This type of model offers a unique blend of Opened after the first Covid-19 lockdown in
industry specific requirements; 2020, Click Studios is based on Unitec grounds
and provides a home for a mixture of guilds,
interconnected and complementary
screen practitioners, producers and gaming
services, a complimentary ecosystem of
start-ups. It is backing a model of community of
which screen is one of many screen clients with like-minded goals and
interconnected creative industry activities needs. It has a strong commitment to providing
being done on one site. internships and opportunities to those entering
the screen industry. It is already looking to
The mixed model approach has been expand to a second building and develop a
looking at studio developments in regional digital production studio facility.
areas outside Auckland and Wellington. It
involves different strands of income de- REVENUE STREAM TWO:
risking the studio development.
Education supplier to be on site – potentially a
mix of creative and technical. The education
These revenue streams include:
supplier possibly in the form of an established
polytechnic or university would provide a
cornerstone rental for the studio. It would give
6Click Studios https://clickstudios.co.nz. Click May 2021, illustrating strong growth in just 12
Studios is opening a second site in Avondale in months.
7|PageDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
students access to studio facilities, support REVENUE STREAM FOUR:
workforce development, and provide a
workforce pool on site for incoming Providing services and equipment that
productions. Students can be placed onto productions will use that are not available in
productions as part of the support package the region. This would include lighting and grip
given to productions coming into the campus. equipment, editing facilities, sound post-
recording booths and LED screens. Providing
New Zealander Bruce Sheridan (now the this equipment could be done in partnership
president of the International Association of with Auckland suppliers looking to expand their
Film and Television schools), conceived and businesses.
helped to create the $21 million dollar Media
Production Centre, at Columbia College, This report only looks at the traditional screen
Chicago which brings education and studios production demand (long form drama and
together based on a concept of modelling documentary and film), as the other sources of
professional practice within an education demand are project specific.
environment.7
REVENUE STREAM THREE:
THE MIX OF TELEVISION, FILM
Production tenants renting office, mill, AND COMMERCIALS IN THE
workshop, storage and production space. The DEMAND EQUATION
number of stages and accompanying support
space needs to be linked closely to the target When assessing the mix of production
market for the pipeline that they will service. activity that makes up demand, it is
Providing separate access and security is important to look at the length of time that
important to larger line productions. However, it each spends on production activity.
was indicated throughout the research for this
study that New Zealand producers are
interested in sharing facilities and resources in
the regions, creating more flexibility for tenants
and for studio owners.
7Summary from Bruce Sheridan’s submission to
Screen Strategy 2030.
8|PageDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
Average Use of Production Base and Stage Space:8
PRODUCTION TYPE TIME FOR PREP, SHOOT, AVERAGE STUDIO REPEAT BUSINESS
WRAP STAGE USE OPPORTUNITY
Television Commercials Prep (production 1 – 5 days Unpredictable Multiple
(T4)9 base) 1 – 2 weeks clients
prep, 1 – 5 days shoot,
1 – 2 days wrap
Online Content (T3, T4) 1 – 2 weeks prep, 1 – 3 1 – 2 days Unpredictable
days shoot, 2 days Multiple clients
wrap
Motion Capture for 2 – 4 weeks Unpredictable repeat
Animation (T3, 8 – 12 weeks prep, 24 – Motion Control Multiple clients
T4)/Gaming 52 weeks production, Capture VFX 6 – 12
8 weeks wrap days across 6 months
New Zealand Feature 6 weeks prep, 7 weeks 1 week and No repeat
shoot, 3 weeks wrap production base10
New Zealand TV Series 5 weeks prep, 14 19 weeks High repeat, same client
weeks shoot, 2 weeks
wrap
Line Production Feature 8 weeks prep, 8 – 10 28 weeks No repeat
T2, T3 weeks shoot, 2 weeks
wrap
Line Production TV Series 10 weeks prep, 10 - 20- 24 weeks High repeat, same client
T2, T3 week shoot. 4 weeks
Line Production TV Series 20 weeks prep, 40 52 weeks High repeat, same client
T1 weeks shoot, 4 – 8
weeks wrap
Line production Feature 20 weeks prep, 40 52 weeks No repeat
Film T1 weeks shoot, 4 – 8
weeks wrap
FUNDING AND ACTIVITY SNAPSHOT – NZOA AND NZFC
The latest funding figures from NZ on Air give an indication of where production companies
are based and the level of investment they are receiving from NZ on Air to produce New
Zealand content.
2019-2021 NZOA Funding % No. of Projects %
Auckland $169,838,888 81.7% 350 81.2%
Christchurch $18,030,995 8.7% 14 3.2%
Dunedin $2,543,060 1.2% 6 1.4%
8 Compiled from NZTE Survey for Regional Study Demand. Note all productions are different in terms of
length depending on budget and script.
9 T1 – T4 refer to Tiers of production and Qualifying New Zealand Spend. Refer to Appendix One.
10Figures obtained from NZFC for this study show that there were ten NZ feature films with NZFC
investment in 2019 - 2020. Of these, three features had no NZSPG with average budget of $898,000.
The level of the budget illustrates that many NZ feature films have a level of budget where they will not
use stage space preferring to shoot on location. However, they still require premises to base the
production for the duration of the prep and shoot of the feature.
9|PageDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
Featherston $150,592 0.1% 2 0.5%
Gisborne $50,000 0.0% 1 0.2%
Hamilton $400,000 0.2% 1 0.2%
Kaitaia $380,000 0.2% 2 0.5%
Nelson $329,931 0.2% 3 0.7%
Queenstown $499,107 0.2% 3 0.7%
Rotorua $469,118 0.2% 2 0.5%
Taranaki $1,795,000 0.9% 5 1.2%
Te Tau Ihu $206,133 0.1% 2 0.5%
Thames $178,054 0.1% 1 0.2%
Waiheke island $22,500 0.0% 1 0.2%
Wellington $12,836,374 6.2% 37 8.6%
Whanganui $99,000 0.0% 1 0.2%
This indicates that Christchurch and Queenstown – One Lane Bridge (Great
Dunedin (2nd and 4th respectively in terms Southern Television) is currently filming
of proportion of funding), have significant a second series in Queenstown. It is
based on location but is occupying
production companies already actively
business units as a production base.
producing within the region. As funding is
The production company is based in
going into a company, it is assumed that it Auckland.
is predominantly spent in the area.
Notably there are Whitebait Productions in Rotorua – Vegas (Greenstone NZ)
Christchurch and NHNZ and Animation wrapped filming early 2021 in Rotorua.
The Vegas title sequence was
Research Limited in Dunedin. Brown,
produced by TORO Studios in
Sugar, Apple, Grunt Productions are based
Gisborne. It is hoped that this will go to
in Taranaki and Steambox Collective in a second series. The production
Rotorua. company is based in Auckland.
The main production companies for
television are based in Auckland. While all
of them base most of their work in NEW ZEALAND FILM
Auckland, some of the productions are COMMISSION – PRODUCTIONS
based regionally. There has been a FUNDED & FILMED IN THE
notable shift in the last couple of years of
production activity.
REGIONS
Budgets for New Zealand features on and
For example:
SPIG productions show steady growth over
Christchurch – Kiri and Lou (Stretchy), the past two years. In the annual report for
Claymation animation is created in 2018/2019 for NZFC Commission total
Christchurch. The production studio is in budget of New Zealand films was $58.7m.
the Gate House supported by In 2019/2020 in spite of Covid this had risen
Christchurch City Council. All crew live
to $90m. Equity funding remained steady
in Christchurch. The production
at $16.1m in 2018/2019 and $14.1m in
company Stretchy is based in
Auckland. 2019/2020.
10 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
Money spent by SPIG productions rose by The following summary details filming in the
$8 million from $621 million in 2018/2019 to regions by projects funded by NZFC and
$630 million in 2019/2020 despite of Covid. the Screen Production Grant (SPiG)
While much of these productions are between 2015 and 2021. The total number
based in Auckland and Wellington, it does of productions in Dunedin is 12, followed
show the possibility of that money being by Christchurch/Canterbury with 11
spread to other parts of the country if productions. Combined with Queenstown,
regional studios were developed.11 Oamaru and South Island shooting, this
brings productions in the “golden triangle”
The number of productions that are
in the lower South Island to 35 productions.
shooting regionally, including international
projects, is a great key indicator of those Of further note, is filming in the Bay of
regional centres that are already seeing a Plenty, Rotorua and Central Plateau area
great deal of location filming activity, and which has increased over the past two
which would indicate suitability for years.
establishing screen studios.
SUMMARY TABLE OF ALL SHOOTING IN REGIONS BY PRODUCTIONS FUNDED BY NZFC AND SPIG
GRANT12
PERCENTAGE OF
REGION # PRODUCTIONS
TOTAL PRODUCTIONS
DUNEDIN/OTAGO 12 8%
CHRISTCHURCH/CANTERBURY 11 7%
QUEENSTOWN 9 6%
SOUTH ISLAND 5 3%
OAMARU 1 1%
WAIKATO 1 1%
ROTORUA/BOP 8 5%
GISBORNE 1 1%
NORTHLAND 2 1%
CENTRAL PLATEAU 1 1%
VARIOUS – NORTH AND SOUTH ISLAND 2 1%
TOTAL 53 33%
International projects are also looking at
the regions as part of their enquiry process.
11Figures from New Zealand Film Commission 12Information provided by NZFC on projects
Annual Report 2018/2019 p4 and 2019/2020 funded from 2014/2015 to 2020/2021 financial
pg5 years.
11 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
The NZFC confirmed the following in about stages (in any centre including
response to discussions around the level of regional) in their initial query.
enquiry from international clients.13
• Of 44 location presentations provided,
• In the 2020 calendar year 18 x 36 included images of regional
enquiries from international projects locations outside of Auckland and
included a request for information Wellington
In the RSD 2021 Survey, participants were asked where they felt studios should be built
regionally. The breakdown of answers were:14
REGION DEFINITELY YES DEFINITELY NO MAYBE
NORTHLAND 6% 23% 2%
HAWKES BAY 6% 45% -
BAY OF PLENTY 28% 23% 2%
CHRISTCHURCH 38% 26% 8%
DUNEDIN 43% 21% 2%
QUEENSTOWN 53% 17% 2%
CROMWELL/CLYDE 11% 53% -
HUNTLY/HAMILTON 9% - -
Participants were also asked if they were looking to film projects regionally in the next two
years.15 The results are as follows:
REGION NUMBER PERCENTAGE
NORTHLAND 2 6%
GISBORNE 2 6%
HAWKES BAY 2 6%
WANGANUI 1 3%
BAY OF PLENTY/ROTORUA 5 16%
CHRISTCHURCH/CANTERBURY 6 19%
DUNEDIN 5 16%
QUEENSTOWN 6 19%
WANAKA 1 3%
TOTAL PROJECTS: 32
13 As per NZFC April 2021. 15 These projects do not include line
productions and are at are a projected
14 From the RSD 2021 Survey
timeline only and are subject to financing and
funding approvals.
12 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
REGIONAL FILM OFFICES FILM SOUTHLAND FUTURE PIPELINE -
Unconfirmed
RECORDED ATTRACTION
INCOMING ATTRACTION • INT. FEATURE – July 2021 (location
shoot)
As part of the look at demand, it was
• INT. FEATURE – July 2021
important to get an up-to-date snapshot • INT. REALITY TV SERIES – July 2021
from the Regional Film Offices to see what (expressed that a studio would be
demand they are currently experiencing. utilised if available)
• NZ FEATURE – Spring 2021
A studio developer interviewed for this • NZ TV SERIES – Sept/Oct 2021
study observed: • NZ/Australian TV SERIES – Spring 2021
• INT. FEATURE – Feb/March 2022
“As a general proposition, facilities
• INT. TV PILOT – no dates specified
outside of areas with existing
• NZ FEATURE – no dates specified
production talent and infrastructure
• INT. FEATURE – Indie – no dates
have struggled economically given a
specified – (expressed that a studio
slow ramp up.
would be utilised if available)
“If you want a shortcut to assess • INT. FEATURE – Indie – no dates
existing demand for actual stages, the specified
quickest place to look is how many
industrial buildings in the area have
been converted to a production use. It CHRISTCHURCH
is the cheapest and easiest way of
• There are three features looking to
creating a controlled environment,
shoot in Canterbury in the next 12
even if it does not have large clear-
months.
span space. If there is little such
• Kiri and Lou – Season 5
converted space in an area, it means
that you probably will need time to
ramp up demand (assuming other
production resources are in the
community).” INTERNATIONAL DEMAND FOR
CONTENT
Olsberg Film Studio study noted that
REGIONAL FILM OFFICES consumer desire for content remains high
REPORTED THE FOLLOWING in spite of, and because of, the COVID-19
pandemic. Major producers remain
INTEREST IN FILMING IN THEIR
committed to future funding of
REGIONS: productions. Recovery timelines,
particularly in the Northern Hemisphere,
BAY OF PLENTY FUTURE PIPELINE - remains unclear in spite of vaccines now
Unconfirmed becoming available, and it is uncertain
what the continued effect may be on
• Sept to Dec 2021 Vegas 2 production financing timelines and
• Late summer / autumn 2022 - workflows.
Taupo District Feature Film - NZFC /
Co-production New Zealand, with its low rates of
• Summer 2022 Rotorua Feature Film community transmission and ability to film
• Summer 2022 Rotorua Steambox and keep workflow production high, is
Feature Film uniquely placed to become a resilient
haven for international productions and
13 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
those looking to purchase New Zealand where productions will look to film
made content. outside of Covid-affected areas.”16
International producers interviewed for this International producers interviewed for this
study noted: report indicated that there is a 7% plus
additional cost to the bottom line of a
“We are definitely experiencing production for Covid related expenses
increased demand. We are providing
such as PPE and additional crew. The
a base and consulting for a line
logistics of filming are also more
production currently. It will last this year
and next until the vaccine is up and complicated depending on what
working.” lockdown level a city may be in. In some
cases, facial condoms are being used for
“Yes, there is increased demand, but it
actors so that they can still perform
has been complicated by Covid.
intimacy scenes. None of these issues,
Filming is happening in Los Angeles but
costs or complications exist in New
under strict Covid protocols.
Productions and people are desperate Zealand.
to go to other places that are safe.”
In the report, Global Screen Production –
“There is very big interest and generally The Impact of Film and Television
an increase. A proportion of it has to Production on Economic Recovery from
do with Covid, as NZ is a clean place COVID-19 (Olsberg COVID-19 Recovery),
to be. There is a fear internationally of Olsberg SPI’s analysis17 found that 2019
a filming being stopped in the US, so
global spend on film, TV and documentary
coming to NZ safeguards a production
reached US$177 billion, with a total of 14
and ensures it can keep filming”.
million FTE jobs, 9.8 million indirect and
“There are over 60 productions at any induced jobs, and a total economic
time happening in Vancouver alone. impact of US$414 billion. The analysis also
There is so much content demand from found that 67% of average production
streamers.”
costs were spent on business services other
“Networks are doing a lot of than screen production.18
acquisitions and repeats of old
content. They are looking for well-
Olsberg NZ Film Studio Study notes that
priced content. Not necessarily 65% of this screen investment originated
premium content, as that comes with from the US, predominantly from streaming
higher risk. There are gaps in Q3 services, studio conglomerates and large
schedules.” tech companies. This is a 28% increase
from 2018 to 2019. Although 0.4% of
“There is increased interest in New
Zealand. There is envy due to your production investment originates from
Covid response. There is a long tail to Oceania, it accounts for 1% of the global
Covid – possibly a year and a half, spend – a positive difference of $US1.9
billion.
16Quotes Survey for NZTE Regional Study 18 The analysis also found that 67% of average
Demand in New Zealand. Conducted in person production costs were spent on business
and online from January 2021 – March 2021. services other than screen production. Global
Screen Production – The Impact of Film and
17 Global Screen Production – The Impact of
Television Production on Economic Recovery
Film and Television Production on Economic
from COVID-19 – Olsberg SPI pg.6
Recovery from COVID-19 – Olsberg SPI Pg6
14 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
Olsberg Film Studio report notes that increase in targeted broadcasting
Netflix’s international subscriptions now hours by cable and satellite TV,
outnumber their domestic (US) availability of low-cost internet access,
penetration of mobile devices along
subscriptions. Netflix Asian Pacific region
with the growing popularity of
(APAC), which includes NZ, saw growth of
streaming video. In addition, the
150% between 2017 and 2019. There is also demand for animation and VFX
alignment with customer spending on content to power immersive
theatrical, physical and digital home experiences such as Augmented
entertainment reaching US$101 billion – an Reality and Virtual Reality is growing
increase of 34% on 2015 levels. exponentially.”21
Global box office also grew by 3% from
pre-Covid-19 levels.19 While the future of THE IMPACT OF THE RISE IN
film post Covid-19 is unclear, films are still DEMAND ON NEW ZEALAND
being made and going straight to Video
on Demand platforms (VOD) as part of
This demand for content from international
studios’ distribution strategy. For example,
channels and streamers has seen some
Mulan and Wonder Woman 1984 were
noteworthy changes in demand that are
both released directly onto streaming
having a positive impact in New Zealand.
platforms in 2020.
Some recent examples include:
On this subject of demand Business Wire
• BossaNova, a London based content
noted:20
creation and funding outlet has
acquired 600 hours of content from
“With the growing internet penetration New Zealand production company
and access to multimedia devices, GreenstoneNZ and CJZ – including the
customers are spending more time on Border Patrol and Motorway Patrol
streaming digital content. Streaming franchises.22
video is the fastest-growing distribution • Hulu has picked up the rights to New
channel for animation and is witnessing Zealand transgender series Rurangi.23
double-digit growth and the same is • Stop frame animation series Kiri and
expected to continue. This growth is Lou was number one on CBBC during
attributed to the exponential growth in lockdown beating Peppa Pig24
the number of online video viewers • Libertine Productions Mystic TV series
throughout the world. was picked up for a second season by
CBBC, TVNZ and Seven Network.
The demand for animation, VFX and
video gaming has expanded with the
19New Zealand Film Studio Infrastructure Study - 22https://www.c21media.net/news/bossanova-
SPI Olsberg 22 July 2020 pg. 7 - 8 picks-up-cjz-greenstone-
content/?ss=Greenstone
20https://www.businesswire.com/news/home/2
0200131005198/en/Global-Animation-VFX- 23https://deadline.com/2021/03/hulu-new-
Industry-Report-2020-2025-Demand-for- zealand-transgender-drama-rurangi-streaming-
Animation-VFX-Content-to-Power-Immersive- 1234708883/
Experiences-such-as-AR-VR-is-Growing-
24https://www.stuff.co.nz/entertainment/tv-
Exponentially---ResearchAndMarkets.com
radio/300236175/kiri-and-lou-a-local-
21Refer to Appendix 4 for more detail on New production-to-be-ridiculously-proud-of
Zealand viewing figures.
15 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
The New Zealand television network TVNZ develop and commission new content
is also committing to increase local from a variety of sources across the board.
production in 202125 and beyond, and
As part of the Covid response in New
recent advertising for a Head of
Zealand, the government allocated an
Production for Discovery Channel (which
additional $50million dollars to the
acquired TV3 and Mediaworks in 2020)
Premium Productions for International
indicates that they are looking to increase
Audiences Drama Fund which is being
their content creation in New Zealand and
administered jointly by New Zealand Film
Australia. The Auckland Film Utilisation
Commission (NZFC), New Zealand On Air
report noted that:
(NZOA) and Te Māngai Pāho (TPK). This
“Increasing government funding for funding is the first injection of new funding
new domestic content will increase into domestic production in over ten years.
pressure on supply for stage space.”26 The fund intends to “…capitalise on New
85% of those interviewed for the RSD 2021 Zealand’s current production advantage
Survey said there was an increase in and support the sector with employment
demand for content from both opportunities, the Premium Fund will have
international and domestic customers. up to $50,000,000 available to invest. This is
a significant one off opportunity to drive a
Some producers interviewed have seen step-change for the sector by allowing
an increased interest in documentary and production at a scale and ambition not
reality content as it has a lower production previously possible.”28
cost and can often be produced from
archive material without Covid filming At the time of this report, any decisions
restrictions. have yet to be announced. However, it is
hoped that there will be at least three
Stan in Australia has indicated that it will major drama productions from this fund – if
also increase its commitment to not more – with funds needing to be
developing Australian drama and co- committed to production no later than
productions, for which New Zealand is early 2022.
eligible for. There is also diversity funding
being made available through Netflix,
which is looking at broadening the
diversity of stories and those involved in
REGIONAL INFRASTRUCTURE
production as a matter of priority.27 It is DEVELOPMENT –
projected by many spoken to for this INTERNATIONAL SPOTLIGHTS
report that content is lagging by about 12
months due to the shutdown and reduced
The Guardian newspaper article in
ability to film during the Covid pandemic.
November 2020 described the growth of
All of these signpost a willingness to
investment in studio development in
London. The article stated that, in spite of
25New Zealand Herald, TVNZ to splash cash on 27https://about.netflix.com/en/news/building-
local content, 27 February 2021. a-legacy-of-inclusion
26Auckland Film Studio Utilisation, March 2021 28Premium Productions for International
pg 2 Audiences Fund Guideline for Applicants
February 2021 pg 2
16 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
Covid-19, a 300-million-pound deal with examples in Australia and the United
Barking and Dagenham councils to build Kingdom (Melbourne Dockland Studios
studios in East London had been made. 29 and the new Belfast Studios are examples
of this). These regional economic agencies
“Film, and TV production in particular, has
recognise that studio projects deliver on
been on an absolute boom.” says Jason
wider regional economic development
Hariton, Chief Real Estate Officer at US film
strategy that provides and builds
studio operator MBS Group, which will run
employment and expertise in the creative
the Dagenham studio complex.
industries.
“The quantity, the budget, the amount of
films and TV shows being made in all the Instead of competing with major centres
[world’s] main production hubs is all of filming, studio complexes in the regions
increasing. In the fourth quarter this year, can develop alongside them as “value
we are setting a seven-year record for added” location opportunities,
quantities of productions serviced” he complementary to the main filming
says. centres. They look to capacity constraints
that are appearing within major filming
“We are seeing all the projects that centres to see how they can provide a
stopped when the pandemic hit starting solution.
up again and seeing new projects being
raced to market to fill the void, because of • Edinburgh City in Scotland has
all the content that was consumed. Even if promoted its ability to shut off large
you take [the pandemic] aside, the sections of the city easily for car chase
scenes, which is extremely difficult to
industry has been on an explosive upward
do in London.
path.”
• They also develop locally based
Regional infrastructure development has content and production companies.
Liverpool successfully developed and
had an extremely positive effect in parts of
shot Peaky Blinders in Liverpool (with
the United Kingdom, such as the
the additional support of a regional
development of studios in Yorkshire. In strategy from the BBC). This in turn,
fact, the North of England and Scotland developed the crew base in Liverpool,
are now being developed by Channel 4 and increased the interest and ability
as regional screen hubs to get away from of other producers and line
the constrained and “clogged” industry in productions to begin to base
London. Purpose-built sites in regions also themselves in Liverpool.
have high demand from local and • Areas in the United Kingdom have also
international producers, as well as good developed regional incentives to help
offset the additional cost of bringing
quality pop up sites.
crew into an area. Yorkshire has
offered local incentives which offset
Internationally many studio developments
the cost of bringing a production to a
have been actively supported by regional
particular area . This is equivalent to
or local councils in terms of full ownership NZ$2,500 per person30 and adds in
or public private partnerships, including
29Covid Pandemic fuelling growth of film and 30$2500 is the quoted cost by NZ line producers
TV studios in the UK, The Guardian, Mark of having a crew or cast member “on location”
Sweeney 7 November 2020 and includes the cost of their accommodation,
17 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
training and upskilling local crew as an warehouse, producers are more likely to
offset to this. choose the cheapest option.
Black box studio developments that are As part of building the respective business
just stages and workshops do not provide case for a studio complex in a region,
satisfying return on investment for average investors need to consider how they build
land and real estate developers when put up the value proposition regarding
up against traditional industrial warehouse equipment that any production will
and office tenants who are willing and absolutely need and have to bring into a
able to sign multi-year leases at stable region when they consider filming there.
yields for the investor. They also tend to still This can be done through:
be seen by banks and financial institutions
as real estate investments rather than • Developing relationships with
ongoing business investments. equipment suppliers to provide
equipment on a cost plus margin to
Successful studio developments for incoming productions and have it kept
regional New Zealand in the next ten years on site at the studio
should look closely at the local creative • Own equipment and provide it as part
industry and see how they can fit into and of the studio package
build on what is currently there and has
active demand This is explored later in the study in other
ways. It will in part de-risk the investment
and provide a much needed service to
COST SENSITIVITY
the production company/client.
As part of the survey, producers and line
producers were asked to discuss the rates Most producers and line producers
they had been paying recently for interviewed commented “It depends what
warehouse spaces and studios in it covers,” and “It needs to be cheaper
Auckland and Wellington. Warehouse than Auckland studios.”31 The cost of
availability prior to Covid-19 was less than taking a production to a region from
1% in Auckland and traditional Auckland or Wellington is considerable
commercial landlords were not interested including increased crew, transport and
in looking at short term leases that film and equipment travel costs. See later sections
TV clients were able to offer, preferring to in report.. However, the ability to solve
sign up two year leases as a minimum. these issues for a production and create a
Warehousing was also at a premium cost. revenue stream is extremely valuable to a
studio campus proposal.
Different regions are experiencing a
mixture of commercial real estate Aggregating costs from those interviews
vacancy – Auckland is at time of writing at reveals that productions are often paying
2.1%, Wellington 3.1% and Christchurch upwards of $20,000 to sound proof and do
5.3%. If commercial real estate is readily basic black out on a warehouse space to
available and considerably cheaper than film for 1 – 2 days. Producers and line
a studio campus that is a simple retrofitted producers in New Zealand are very
experienced in “making it work”, with
per diem and travel per week. Data from the Quotes Survey for NZTE Regional Study
31
RSD 2021 Survey Demand in New Zealand.
18 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
warehousing, old packing sheds and • $12,646 per week33
industrial units for offices. However, when
production is repeatedly happening in an When attracting offshore drama line
area such as Queenstown or Dunedin, the production, it is important as part of the
case to amortise that cost for productions business case to bench mark the facility
becomes more compelling. and services against offshore facilities of
similar scale and quality.
When aggregated the reasonable rates
for dry hire of a medium stage space When looking at this economic impact,
(1500 – 2000m2), production offices, mill screen production and accompanying
and workshops for drama was: studio development can be seen as similar
to investment in events, convention
• $3,068 per day centres and performing arts venues,
• $19,095 per week particularly in major regional centres such
• $62, 074 per month32 as Christchurch and Dunedin. Christchurch
for example already has an events
For TVC based on a small stage space (. incentive to attract events to the city, and
Dunedin has just advertised a new fund to
• $2,530 per day attract events to the city.34
32 Aggregated from 53 respondents to in on location outside of their production base
person and online survey. Not all respondents they would also require production space.
were able to give accurate figures. All used
34
examples of previous costings in 2020/2021
https://www.scoop.co.nz/stories/AK2102/S0052
from commercial rental or studio hire.
8/720000-regional-events-fund-for-dunedin.htm
33Note TVC’s require on average less space –
300 – 500 m2 and less time in a stage space. If
19 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
COMMERCIAL CONSIDERATIONS
FACTORS FOR INVESTORS TO CONSIDER
As a launch pad we looked at the Olsberg NZ Film Studio report that created an overview of
location decision factors when looking at a place to base a production:
Olsberg NZ Film Studio Report Overview of Key Production Location Decision Factors and the
New Zealand Offer
FACTORS35
1 Creative specifics of the project that will determine the locations and ‘look’
2 Actual budgeted line – item costs of production
3 Effect of a financial production incentive and exchange rate in reducing costs
4 Availability, quality, depth and skills levels of the workforce
5 Sound stage and studio capacity and quality; equipment
6 Variety and accessibility of shooting locations
7 Perceived ease of filming: ‘film-friendliness’
8 Effectiveness of support from national and local film commissions
9 Quality and variety of hotels, restaurants and other lifestyle factors
10 Personal preferences of key talent involved
11 Safety and security for personnel and equipment
12 Variety and availability of transportation options
13 Communications infrastructure including broadband
To test this in the New Zealand context, respondents were asked: What are the five key
questions producers ask themselves when looking where to base a production? A summary
of the answers were:
35 New Zealand Film Studio Infrastructure Study pg. 25 - 29
20 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
WHAT ARE THE FIVE QUESTIONS YOU ASK ABOUT WHERE TO BASE A
PRODUCTION?
30
25
20
15
10
5
0
As the graph illustrates, priorities for those interviewed for this study are very similar –
location/script, crew, studio, budget and equipment. An investor needs to include these
priorities as a starting point in creating their business case for regional studios in New Zealand
As part of the RSD 2021 Survey, those interviewed were also asked to identify the key
constraints existing in New Zealand. They identified the following:
WHAT ARE THE CONSTRAINTS IN GETTING PRODUCTION UP AND RUNNING IN NEW ZEALAND? 36
Lack of studios 32%
Crew availability 28%
MIQ 21%
Budget, incentives, money 13%
Respondents also noted the following: “It is becoming impossible to work
in Auckland. Parking and unit
“Permitting and locking down
bases are miles from location. A
streets is hard in Auckland.
production is up against time and
Wellington is really good. Regional
the traffic.”
is better for getting streets shut
down.” “It is becoming very expensive for
crew to live in Auckland and
Wellington, especially younger
36Survey for NZTE Regional Study Demand in New Zealand. Conducted in person and online from
January 2021 – March 2021.
21 | P a g eDEMAND FOR REGIONAL STUDIOS AND VIRTUAL PRODUCTION FACILITIES IN NEW ZEALAND
crew coming through. It is AUCKLAND FILM STUDIO
important that they can afford to
UTILISATION
live in the city they are working in.”
“Accommodation is very
The scope for regional development is
expensive now in Auckland and
backed up by the evidence that
Wellington and pre-Covid was
Auckland is currently at bursting at the
difficult to get”.
seams with activity and is forecasting
Olsberg NZ Film Studio study echoes this further growth. Traditional centres of
on-the-ground sentiment:37 Auckland and Wellington are
experiencing a surge in demand over the
“There may be scope for regional past two years that has led to current
development, particularly given the
studio facilities being at full capacity. A
amount of production in Auckland and
report on Auckland Film Studio Utilisation
Wellington, but this would only be
from Auckland Unlimited in March 2021 38
feasible with a robust facilities and
workforce development strategy. made the following observations:
Furthermore, the development of a
• Despite the impact of COVID, there
business plan would also need to has been a surge in international
reflect the upskilling required, and demand.
make provisions for alternative • All existing Auckland studios are full
revenues as the local industry is until February 2022.
developed. Such revenues can • Post Covid, productions are coming in
provide critical financial input and can with longer lead times which are
be developed from a range of allowing better supply management
sources.” amongst studio operators who can
now plan 1 – 2 years out rather than
Therefore, a good starting point for a the pre-Covid 3 – 6-month lead time.
studio business case is to look at what a Auckland Unlimited report made the
region can do to provide solutions for following international observations:
these constraints, as well as the role they
would play in what one interviewee called Average Los Angeles studio occupancy is
“Studio NZ”. How can they help address currently 93% (median of 89%)
film-friendliness (ability to film in an area), The following general notes were made
workforce development, growing the New about sound stage capacity in Auckland:
Zealand economy as a whole, and
• 100% increase in sound stage capacity
provide additional support to productions
since 2017.
who would like to film outside traditional • 91% average utilisation since 2014.
film centres but have budget constraints • 97% utilisation over the past two years.
that prevent them from doing that? • Film location permitting is at record
levels.
This data shows that line production and
domestic production already has reached
capacity in Auckland and will naturally
37New Zealand Film Studio Infrastructure Study 38Auckland Film Studio Utilisation 2014 – 2020
pg. 19 report from Auckland Unlimited, March 2021
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