Film, video and audio-visual production

2004

The financial picture for the nation's 688 film, video and audio-visual producers improved in 2004 despite a substantial decline in production revenues.

Total revenues for the industry amounted to $2.9 billion, a 10.9% increase from 2001. The gain was largely due to growth in non-production activities such as broadcasting and film distribution.

Expenses did not rise as quickly as revenues due to falling interest charges, and stable levels of depreciation and other expenses. As a result, the profit margin for the industry was 4.6% in 2004, well above the margin of 1.2% three years earlier.

Revenues from film and video production, a key source for producers, fell 10.6% between 2001 and 2004 to just under $1.5 billion. In 2004, production accounted for only 52% of total revenue, down from 65% in 2001.

This decline was due to falling domestic demand, since film exports increased 6.4% to $704.3 million. Exports accounted for 47% of the nation's film production revenues in 2004, up from 40% in 2001.

Closures of some large production houses, consolidations and scaled-back production activity by others likely contributed to the decline in earned production revenue.

In addition, Canadian households are spending less on video rentals on average, according to data from the Survey of Household Spending. Movie theatre attendance has also gone down from 2002 to 2004. Perhaps these indicators of sluggish consumer demand give some insight into why production revenue fell in 2004.

Revenues from television productions falls, but still dominates

Revenues from television productions declined in 2004, but they still dominated total production revenue.

Film and video producers reported television sales worth $1 billion in 2004, down 10% from 2001. With overall production revenues falling by the same degree, television productions maintained their two-thirds share of total production revenue in 2004.

Increased competition from other entertainment sources, as well as increased viewing time on lower-cost variety and game shows (including reality) may have had an impact on television production revenues. This is especially the case for costly productions, such as movies-of-the-week.

In addition, producers earned $209.6 million in sales to advertising agencies in 2004, the highest amount ever recorded by this survey since its inception in 1972. This was an increase of 20% from 2001. As a result, the share of production revenue earned from advertising agencies rose to 14.0% from 10.2%.

Theatrical feature film revenue grew in 2004, and its share of production sales climbed to 6.2% from 4.5%.

The five largest producers earned 42.5% of all production revenues in 2004, down from 47.8% in 2001. This reduced concentration was due to scaled-back production activities by some producers, while others got out of production altogether.

More full-time employees, but firms relying more on freelancers

Employment in the industry fell 3.6% in 2004, entirely the result of a 16.3% decline in the number of part-time employees. The number of full-time employees increased 6.8%.

As a result, full-time employees accounted for nearly 61% of all workers in 2004, up from 55% three years earlier. This contrasts with the national labour force trend, as full-time employees constituted a marginally lower share of all employees in 2004 (82.0%) than in 2001 (82.3%).

The number of freelance workers hired rose by a strong 18.8% over this period to almost 31,000.

Companies paid $771 million in wages, freelance fees and benefits in 2004, up 29.3% from 2001. Fees to freelancers accounted for 47% of the total, up from 43% in 2001.

Producers in British Columbia are catching up

Film production was dominated by companies in three provinces — British Columbia, Ontario and Quebec.

Film producers headquartered in British Columbia earned $268 million in 2004, 29.4% more revenues than in 2001. This was due to growth in existing large companies and the emergence of some new mid-sized players.

Producers based in Ontario saw their production revenues fall by 19.2% to $748 million, while those in Quebec declined by a much smaller 2.4% to $424 million.

Ontario's share of total production revenues fell from 55% to 50%, while Quebec's rose from 26% to 28%. British Columbia made the most inroads with their share climbing from 12% to 18%. This does not include foreign location shooting in Canada.

Despite this three-province concentration, Saskatchewan producers also saw substantial growth in their industry as production revenues rose 67.2% to $15 million in 2004.

British Columbia producers saw their profit margin do an about face, rising to 5.4% in 2004 from a 7.0% loss in 2001. Ontario film producers earned a profit margin of 2.7% in 2004. Although this was comparable to what they earned in 2001, it was much lower than the 8.6% earned by Quebec producers. Profit margins are calculated including all sources of revenue earned by producers, rather than just production revenues.

Definitions, data sources and methods: survey number 2413.

Selected information is now available in Film, Video and Audio-visual Production: Data Tables (87-010-XIE, free) from the Our Products and Services page of our website. These tables include breakdowns of data by province and region of Canada and by type of film producer.

For general information, contact Client Services (toll-free 1-800-307-3382; culture@statcan.gc.ca). To order special or standard tables or to enquire about the concepts, methods or data quality of this release, contact David Coish (613-951-1075; fax: 613-951-1333; david.coish@statcan.gc.ca), Culture, Tourism and the Centre for Education Statistics.