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HomeMy WebLinkAboutCAO-17-028 - Launching the Film, Music & Interactive Media OfficeREPORT TO:FINANCE AND CORPORATE SERVICES COMMITTEE DATE OF MEETING:APRIL 9, 2018 SUBMITTED BY:Cory Bluhm, Executive Director, Economic Development, 519-741-2200 x7506 PREPARED BY:Silvia Di Donato,Manager, Arts & Culture, Economic Development, 519-741-2200 x7392 WARD(S) INVOLVED:ALL DATE OF REPORT:March 26,2018 REPORT NO.:CAO-17-028 SUBJECT:Launching the Film, Music & Interactive Media Office RECOMMENDATION: THAT launched in 2018 for a two-year period, as described in Report CAO-17-028; THAT staff, over the two-year period, work with regional stakeholders and partners, such as the Waterloo Region Small Business Centre, area municipalities, Waterloo EDC, etc. to develop a collaboarion model advance the Film, Music & Interactive Media industry on an ongoing bases, as described in Report CAO-17-028; EXECUTIVE SUMMARY This report recommends that Economic Development launch a Film, Music & Interactive Media Office (FMIMO) that will provide focused industry development services to grow jobs and business opportunities within these sectors. Priority activities in the first two years will consist of delivering entrepreneurial services,programs and networking; inventory and access to related resources; assistance with sector based provincial & federal funding; and related city policy development. The timing is ideal for these focused services, as local strengths are are well positioned to take advantage of current technology trends requiring original creative content. Demand for artistic content in film, music and interactive media increases with the broad spectrum of distribution and platform delivery: mobile devices, home entertainment systems, through wearable devices, in public venues, and often integrated with live performance experiences. Revenue models have been disrupted entirely with streaming music, film and interactive content as the preferred consumer experience. Together with local technology industry advantages, FMIMO can maximize opportunities for networking, and the services would help transform independent practitioners and local artists into growing businesses. 7 - 1 To launch the office, a professional, experienced contract position will be created to lead the Office, with access to additional resources to support program delivery.Working closely with municipal partners and post-secondary institutions will complement individual strengths and maximize resources over the course of a two-year launch period. After the two year pilot phase, staff will work with the regional partners and stakeholders to coordinate longer term collaboration. This project will fulfill the Kitchener Economic Development Strategy (Make It Kitchener, 2016) action item, officer to facilitate cluster development and provide professional, craft and entrepreneurial And this project, by virtue of creative and cultural content creation, has the added impact of fulfilling both of the main goals of the Kitchener Economic Development Strategy: to generate careers and a diverse economy, and to make Kitchener a compelling city in which to live. BACKGROUND Film, music and interactive media clusters are targeted in the Economic Development Strategy (Make it Kitchener, 2016) because they make a strong contribution to the economy and deliver cultural experiences to inspire the community. From wearable devices to mobile platforms, to projections and live performances, there has been a transformation in how the community connects with artists. Stakeholder engagement, industry research and positive outcomes in other medium-sized cities indicate that now is the time to leverage local strengths for growing opportunities through the launch of the Film, Music and Interactive Media Office. Why Film, Music and Interactive Media? Locally there is an exciting opportunity for growth in these sectors, provided there is a focused set of services to grow opportunities for creative production. There are indications that, compared to similarly sized cities, these sectors may be under-represented locally.The risk is that without support,entreprenuers and creative talent will need to to leave the community for work in their chosen field. Globally, the film, music and interactive media industries are undergoing complete technological transformation. Production has been disrupted, as artists can now create, capture and edit audio and visual content almost anywhere with smaller and more powerful digital tools. Distribution is disrupted as independent artists can reach their audiences online directly through multiple platforms, screens and devices. Consumption is disrupted as online streaming replaces downloads and physical retail. This rapid disruption creates both opportunities and a risk opportunity for innovative companies and entrepreneurs to advanceplatforms, products, services and ultimately employment and artistic growth. Conversely, disruption can leave practitioners and companies open to becoming obsolete, and can result in communities missing the opportunity to experience industry growth. By virtue of consistent focus, the office would help cultivate an environment for success, to drive innovation and spark vitality in the community. 7 - 2 New revenue models within these industries also represent an immediate opportunity to connect artists with technology. For example, local research and development in blockchain technology included a recent hackathon that identified opportunities for digital creative content to be permanently encrypted with artist agreements to deliver revenue consistently. Any on-line use of film, music and interactive media (immersive games etc) production would maximize fair revenue distribution. See Appendix 1 for Industry Overview, summarized from the Ontario Media Development Corporation. Each sector is described below, identifying global trends and local opportunities for growth: Film: The Numbers - is Angeles and New York City respectively, having contributed $1.7 billion to the economy, and rising to 35,000 jobs in the province. The Opportunity platform providers such as Netflix, Hulu, Fibe TV, etc. and major studios like Time Warner, Discovery, etc., are investing billions of dollars to source and develop new film and and television content. While historically, these investments were targeted at existing production studios (in Hollywood, for example), today, these companies are searching the globe for fresh content and emerging content creators. With favourable Provincial tax credits available for production outside of Toronto, combined with decreasing availability of production space in Toronto, Kitchener and nearby areas are well positioned for spill over growth from the GTA. The Risk failure to cultivate a local film industry could result in local companies, talent and entrepreneurs exiting the region for other cities which provide the necessary services, resources and ecosystem Music: The Numbers - in Ontario, the music sector is estimated at 13,400 jobs in Ontario (MusicCanada 2013). Transformed by technologies in recording, production and distribution, Canada has experienced a rapid growth in on-demand streaming with a 76% growth in 2016 alone. Live music in Canada measures at 55% of music related consumer spending, which aligns well with local festival and tourism strengths. The Opportunity the region has a strong local music scene bolstered by numerous local festivals (such as the Kitchener Blues Festival) together attracting nearly one million over the course of a given year, with a majority based on music, and often located in Downtown Kitchener. The opportunity for growth exists in audience development, while supporting local musicians in gaining national and international profile. The Risk - musicians and music industry businesses need a robust industry with multiple opportunities to generate revenue, or they could be at risk of leaving the area to succeed in their chosen field. Focused support is needed to foster collaboration within the local music industry as there is an increasing market for integrated online, as well as immersive live experiences. Ensuring cross-sector collaboration with film, interactive media increases opportunity for film, online games development, marketing, advertising and other collaborative revenue opportunities. 7 - 3 Interactive Media: The Numbers - interactive media refers broadly to content created for mobile devices, tablets, game consoles and web applications. The industry represents $1.1 billion in Ontario revenues alone with 472 game development companies in Canada. The Opportunity globally, the rise of mobile devices and gaming consoles as primary viewing/interactive platforms has created growth and demand for mobile content, gaming and mobile based applications.Locally, the sector is gaining momentum through expanded post-secondary training at Conestoga College, UW Games Institute graduate programs, independent practitioners, and local leadership, by companies such as Electronic Arts. The Risk there are two prominent sides to Interactive Media the front-end creative/artistic work, and technology required to bring content to mobile devices and consoles. While the region is renowned for technology, and in particular, an ability to service the back-end, technology needs of interactive media, the region has struggled to grow the creative/artistic side of this industry. Failure to grow and develop the creative side of Interactive Media could result in lost job opportunities (an inability to capture the full spectrum of jobs) and the potential loss of companies, should parent companies look to consolidate their technolodgy and artistic operations in one location. Local Strengths: There are significant strengths to leverage in the community across film, music and interactive media: Strong technology sector: Technology continues to transform how creative content is produced, distributed and consumed across a growing arrayof digital platforms. Creating engaging, original content is more important than ever for technological success as artificial intelligence and automation shift the landscape from STEM to STEAM. (Science, Technology, Arts and Math) Another example of mutual benefit exists in digital monetization through blockchain technology. Connecting local technology with local content creators will further amplify mutual and unique benefit to the community, building resiliency in both technology sector and among artists. Start-up culture: A natural advantage exists with the local history of innovation and start- up culture, a concept perfectly aligned with the entrepreneurial independent artist. The natural advantage exists where content created for these sectors is increasingly consumed on digital platforms and devices, a sector that has a strong representation in the local start- up population. The connection with content is bound to strengthen entrepreneurial success for all related sectors. Talent: Each of three post-secondary schools has expanded their programming in the areas of content creation for these sectors. Wilfrid Laurier Film Studies has expanded in partnership with Vancouver Film School with joint credentials in academic study and film production experience. WLU also has grown their user experience design program and continue as leaders in music therapy -trauma therapy. Institute Immersion facility, and UW Arts-Business degree including the music program. 7 - 4 Festivals: As identified above, close to one million festival visitors are estimated region- wide, with a substantial majority powered by community events based on live musical performance in Downtown Kitchener. These events not only support the regional tourism brand and city profile, but also develop audiences to grow performance opportunities in venues across the region, many of which now integrate digital media experiences, film projection, interactive media, online gaming and wearable devices such as the MYO armband. These strengths must be leveraged to grow the sector, but the opportunity is time-sensitive. Launching the Film, Music and Interactive Media Office now with focused services will help build on local strengths to strengthen and diversify the economy and culture. Unique Regional Strengths: a significant benefit of Waterloo Region, is the unique assets and strengths of the various communities. For example, Cambridge has developed comprehensive strengths that support film production, Waterloo has developed strengths in technology, etc. A key goal of a FMIMO is to understand how best to collaborate so as to leverage the strengths of all of our communities. Stakeholder Consultation and Pilot Programs City staff has led, facilitated or consulted with stakeholders in each sector, beginning with Music Works Action Plan recommendations in 2012 (CAO-12-034). In 2015, extensive consultation occurred as part of the Economic Development Strategy (Make it Kitchener) to further develop themes that support artists. Staff has continued to expand consultation to include film and interactive media, based on stakeholder input. Specific feedback for film, music and interactive media emerged as compatible growth opportunities. To test the concept based on this consultation, staff has collaborated with community experts as possible to deliver workshops, programs and networking events to support these industries. Approximately 2,000 emerging and established practitioners and artists have participated over the years. Workshops and programs were delivered with municipal, academic and industry partners to serve the community as resources became available. Participation and further research indicated that there is a demand for focused services and resources, summarized in Appendix 2. REPORT: - year pilot phase to develop and deliver programs to grow these sectors. The purpose is to provide industry development services that capitalize on growth opportunities by building on local strengths, retaining talent and increasing local job/company growth experienced in the rest of Ontario and Canada. The office will develop metrics for the pilot period and utilize additional resources to implement the programs. Subsequently this report recommends that staff, over the two-year period, work with regional stakeholders and partners, such as the Waterloo Region Small Business Centre, area municipalities, Waterloo EDC, etc. to develop a collaboarion model to maximize the bility to advance the Film, Music & Interactive Media industry on an ongoing bases. 7 - 5 Proposed Services and Deliverables: Industry Development: Entrepreneurial Services, facilitated through collaboration, to independent practitioners and businesses in film, music, interactive media. Business skills development, facilitated networking and programs, etc. Sector Based Funding advocacy, identification and access to provincial (OMDC) and federal levels to increase the local share of available funding. Enhance National & International Profile through outreach and collaboration (e.g. with Waterloo Region Tourism, Waterloo Economic Development Corporation) Collaboration and Partnerships: Support regional collaboration to maximize regional strengths (e.g. film location database) Enhance Post-secondary relationships to support talent development. Industry engagement to connect independent practitioners for future growth. Policies and Metrics: Develop Industry Census & Results Metrics to survey and quantify practitioner and industries to determine needs and measure impact Municipal Policy and Programs, Review and recommend policies to support local and grassroots creators (e.g. shared services agreements for online film and media resources, music-on-hold, on-line FMIMO Industry Working Group to provide advisory input and stakeholder outreach. Given the limited initial resources of the FMIMO, staff anticipate the focus of active work for the first two years would be placed o Collaborative Approach Key to the success of the FMIMO, and key to advancing industry growth, will be to leverage the key strengths that already exist within the region and develop strong partnerships with key stakeholders neighbourhing municipalities, post-secondary instutitions, the Waterloo Region Small Business Centre etc. Collaboration and partnerships also allows for a spectrum of developing talent for robust industry growth. For example, local post-secondary schools provide training for emerging practitioners and artists. The Kitchener Public Library provides resources for developing artists, producers, filmmakers and musicians. As they become working professionals and entrepreneurs, the Film, Music and Interactive Media Office is there could support the next level of business development. Given the importance of collaboration, staff have engaged regional partners in the development of the FMIMO, to gain insight for the office and how best to coordinate service delivery, including staff from the Cities of Waterloo and Cambridge, the Waterloo Economic 7 - 6 Development Corporation, Waterloo Region Tourism, Waterloo Region Small Business Centre, Conestoga College, University of Waterloo, Wilfrid Laurier University and the t in Waterloo Region Report, local opportunities. Staff has also consulted with other cities which have established a city office to serve film, music and/or interactive or digital media industries. Focused service in medium sized cities such as Hamilton, London, Austin and Seattle have not only grown local industries, sparked investment and cultural opportunity, but have enhanced the national and international profiles of those cities, as shown in Appendix 3. Conclusion Given the opportunities for local industry growth, the risk of not taking a leadership role during a time of industry wide disruption, and the potential to leverage local strengths through collaboration, staff recommend initiating and piloting a Film, Music & Media Office for a two-year period. What Would Success Look Like After Two Years Three key outcomes of the FMIMO would be the following: 1) Clear and quantifiable local industry growth; 2) A firm understanding of the long-term regional growth potential for each of these industries, to determine the long-term need/opportunity of the FMIMO; and, 3) A collaboration model among regional partners and stakeholders to understand how to leverage existing local strengths. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: The Kitchener Economic Development Strategy (Make-It Kitchener) recognizes arts, cultural workers and content creators (including music, interactive media, and film and user experience design)as a vibrant economic cluster in and of itself, comprising a significant segment of the labour force. Specifically, this report implements the action item to "partner with regional municipalities to establish a music, film and media officer to facilitate cluster development and provide such as music, film, performing arts, and design." Further, the report aligns with the strategy skill development Development Strategy (Make-It Kitchener) and the Waterloo Region Economic Development Strategy are aligned with Ontario strategies to grow cultural and creative industries. The Federal government through Canadian Heritage has recently launched a creative industry vision and strategy and this office would provide project readiness for funding by other levels of government. Local provincial and federal funding will be amplified by the focused attention of these resources. 7 - 7 Arts and cultural industries leverage innovation throughout businesses as diverse as digital media and advanced manufacturing design. A critical component to talent attraction, retention and development, support for arts and culture activities helps to develop Specific actions Make it Spark-Support creative clusters such as music, film, performing arts and design. FINANCIAL IMPLICATIONS The City of Kitchener has allocated funds from the Economic Development Reserve Fund to take initial leadership of the project, subject to final Council approval. The Film, Music & Interactive Media Office would be launched with a one-time investment allocated at $260,000 for contract staff services and programming for a two-year pilot phase. COMMUNITY ENGAGEMENT: rts and Culture Advisory Committee have provided positive feedback and support for the concept of a Film, Music & Interactive Media Office. In-depth consultation engaged hundreds of stakeholders from 2012 to 2017. Staff worked with local industry professionals to gather panel experts and participants to produce multiple networking events, workshops and conferences to suit those identified needs. AACKNOWLEDGED BY:Dan Chapman, CAO 7 - 8 Appendix 1 Industry Profiles The following provides a summary of industry profiles and economic impact for Film, Music and Interactive Media. Data defines the provincial and national context for local industry growth potential. Data source provided by the Ontario Media Development Corporatin: http://www.omdc.on.ca/collaboration/research_and_industry_information/industry_profiles 7 - 9 FILM & TELEVISION INDUSTRY PROFILE America including all aspects of audiovisual content production and delivery value chain. The film and TV production sector in Ontario is mainly made up of small- to medium-sized companies producing a combination of their own proprietary productions and service productions with international partners. The province is also home to world-class animation and visual effects studios. In 2014-15, Ontario generated 38% of the national film and television production volume. Film and TV contributed $1.7 billion to the provincial economy in 2016 supporting 35,000 jobs. 140,600 full time jobs in Canada for screen-based media industry in Canada, film and television production continued to be an important source of employment and GDP in Canada in 2015-16. The production industry generated 140,600 full-time jobs The screen sector value chain generated $20.1 billion in GDP for the Canadian economy 35,000 jobs in Ontario $1.7 billion to Ontario's economy, fueled in part by significant provincial investments and the province's highly skilled workforce, increase of 3,200 jobs over the previous year $7.45 million in web series revenue, not included in Film/TV data 24% of creators report working exclusively in web series New monetization models have been emerging for interactive digital media in tandem with growth of new technologies and platforms. There is a proliferation of approaches to monetization of interactive digital media, from consumer-paid subscription models to content funded by brands. The videogame industry in particular has early adopters experimenting with models. In 2015, government- exceeded the $1 billion mark for the fifth year in a row, hitting an all-time high of $1.52 billion according to OMDC figures. Television was responsible for 83% of all expenditures, with $1.26 billion spent on domestic and foreign series, TV movies, mini-series, specials and pilots.11 Spending associated with foreign TV movies and mini-series production continued to grow (96%), buoyed by a number of high-value television series, including Suits, Beauty and the Beast, and Heroes Reborn. Domestic TV production remains an important component of these annual results with a contribution of $704.8 million in 2015. Notably, while the number of TV movies, mini- series, specials, and pilots only increased 5% over 2014 levels, budgets increased by 42% 7 - 10 MUSIC INDUSTRY PROFILE The Canadian music industry includes a wide range of artists and entrepreneurs, who create, write, produce, publish, and distribute original music. The industry includes musicians, songwriters, record labels, managers, agents, concert promoters, and music publishers. The market in Canada is dominated by the large foreign-owned record and publishing companies but has a strong independent sector comprising mainly small- to medium-sized companies whose lines of business range from artist development to publishing, managing, and touring. The vast majority of Canadian content is commercially released by Canadian-owned and controlled independent music companies. $45.6 million in Ontario wages, salaries, commission in Ontario record production industry alone usic industry was measured at 10,500 FTEs in 2013 (including direct, indirect and induced impacts), and resulted in $305.5 million in labour income In 2013, the Canadian sound recording and music publishing industry generated $165.4 million in total music publishing royalties and rights.16 From this amount, $64 million was generated from performing rights (38.7%), followed by $25.3 million from mechanical rights (15.3%). revenues Live music alone in Ontario generated $628 million from live music related activities, with almost 40% of those revenues generated via ticket sales http://www.omdc.on.ca/collaboration/research_and_industry_information/industry_prof iles/Music_Industry_Profile.htm The 2013 SOCAN annual report noted that it was the first year that the collective distributed Internet streaming revenues ($3.4 million in revenue), which coincided with a performing rights licence for YouTube and an agreement that made it easier to members to receive additional money for music posted to the video site. Tracking the growth of revenues through the annual reports for 2014 ($12.4 million), 2015 ($15.5 million) and 2016 ($33.8 million), Internet s fastest growing revenue source having overtaken cinema, private copying, and satellite radio revenues and likely to surpass concert revenues in the coming year. 7 - 11 INTERACTIVE DIGITAL MEDIA (Source, OMDC) The term interactive digital media (IDM) accounts for a range of digital content and experiences available through a variety of digital platforms such as mobile devices, tablets, game consoles, and Web applications. IDM in Canada is a growth industry that is quickly changing, driven by shifts in consumer behaviour and technology. The broader IDM sector includes companies that produce interactive content as well as firms that provide various types of products and services to enable the production of interactive content. These 1 Core IDM content includes, but is not limited to, video and mobile games, cross-platform entertainment, virtual and augmented reality content, web series, e-learning, and training products. 472 active studios in Canada, 20,400 directly employed and with an average salary of $71,300 per year for full-time workers Canadian interactive digital media products were responsible for $3.3 billion in Gross Domestic Product (GDP) surrounding area, with additional clusters of activity in Ottawa, Kitchener-Waterloo, London, Hamilton, and St. Catharines/Niagara Falls. million f 472 studios in 2015 worth $2.4 billion in 2015, up 50% since 2013 employing 20,400 FTEs directly employing 2,500 people with the provincial industry spending an estimated $265 million. In spite of its economic importance, recognition of interactive digital media as a distinct sector has lagged behind some of the other creative industries. Interactive digital media had not been part of the standard series of North American Industry Classifications and Codes (NAICS, NAPCS) tracked by Statistics Canada until the creation of NAICS codes for some digital media activity in 2012. Industry figures to date for interactive digital media have been captured by a combination of existing categories such as Software Publishing, Internet Publishing and Broadcasting as well as Computer Systems Design and Related Services. Most recently, through the Culture Satellite Account, Statistics Canada and its partners are measuring and reporting industries. However, the most recent data currently available is from 2010. The industry is attempting to address data gaps through the periodic publication of the Canadian Interactive Industry Profile, which surveyed the industry in 2006, 2008, and 2011 in an attempt to acquire baseline data about the industry on which to build. Additional efforts on a provincial level have included Interactive Ontario Economy (MODE) project, which is a database of companies creating IDM content in Ontario.12 7 - 12 Appendix 2 Consultation and Pilot Programs Since 2012, close to 600 artists, practitioners and industry professionals have participated in consultation or business develoment events related to film, music and interactive media. Many are community-driven, collaborative events that are based on expressed interest.More than 600 artists, practitioners, agencies and industry professionals attending one or more times to events. Total community participation is currently at close to 2,000 visits, excluding academic and ongoing events. Highlights include: 2012-2014: Music Cluster Action Plan 2012 OMDC tour of Kitchener and region, facilities and services MusicCanada EA Content Creators Roundtable, Site Selectors Tour of Kitchener Minister Chan Roundtable at 44 Gaukel (Ontario Music Fund) KOICon Music Industry Conferences ICTC National launch of Music A Catalyst for Technology Hubs KOIPlay Gaming Conference 44 Gaukel Post-Secondary academic curriculum and events (Conestoga, UW, WLU) CreateRegion Content Creator Workshop, 44 Gaukel Fluxible Conference launch support (ongoing) e Expanding Downtown Live concerts (ongoing) Kitchener Music City Roundtable at NXNE with MusicCanada 2015-2017: Make it Kitchener Arts & Creative Industry recommendations launched Kitchener Artist-in-Residence expanded to include music & performing arts (ongoing) Mastering of the Music Cities (Kitchener as one of 22 cities in focus groups) Waterloo Region Tourism collaboration projects (festivals, film, event calendars) OMDC Digital Media Content Creators Study (CEI, CoK, SBC) Music Mentorship Industry Workshops (CEI, CoK, SBC) Music Cities Workshops with Music Canada OMDC Kitchener Tour & Meetings OMDC/InteractiveONTARIO Workshops (annual) 44 GAUKEL, CRITICAL MEDIA LAB EVENTS (ongoing) BUSINESS OF SONG Workshops, including digital monetization, business process OMDC, Interactive Ontario Funding Workshops, Digital Dialogue (2016, 2017) FILMMAKING, MICROBUDGET Workshop SBC and KPL Bell/FIBE TV Community Programming Information and PitchFest 7 - 13 Appendix 3 Collaboration List The following image represents many of the organizations with which staff have collaborated over the years. Working together, hundreds of participants, attended stakeholder consultation, entrepreneurial workshops and informative events related to film, music and interactive media. 7 - 14 Appendix 4 Sample City Offices The following screen images give an overview of similar offices in other municipalities where there is a focus on film, music and/or interactive media as a business development services. Music Office LONDON, ONTARIO 7 - 15 Music Office TORONTO, ONTARIO Film Office TORONTO, ONTARIO 7 - 16 Digital Entertainment & Interactive Office VANCOUVER, BRITISH COLUMBIA 7 - 17 Office of Music & Film SEATTLE, WASHINGTON 7 - 18 ONTARIO FILM LIBRARY DATABASE 7 - 19 ONTARIO MEDIA & DEVELOPMENT CORPORATION 7 - 20