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The Media

Th M di andd Entertainment
E t t i t Industry
I d t in i NYC:
NYC
Trends and Recommendations for the Future

October, 2015
Introduction

The media and entertainment industry is an important contributor to New York City’s economy,
providing high quality jobs which out-performed
out performed the US economy through the financial
downturn.

Since our last report in 2012 the industry in New York City has seen a period of steady growth,
particularly in sub sectors like scripted TV series which offer long-term and predictable
employment.

This report, completed in April 2015, serves as an update to our 2012 publication. The report analyzes

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the development and growth of NYC media in the period 2012 through 2014, by once again
examining different subsectors and identifying the latest trends that have shaped and will
continue to shape NYC
NYC'ss media and digital media sectors.

onsulting Group, Inc. A


Since its establishment in 1966, the Mayor’s Office of Media and Entertainment (MOME),
through its Office of Film, Theatre and Broadcasting (MOFTB) has served New York City’s media

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and entertainment industry – issuing permits, coordinating services and deploying the "Made in
NY" logo and marketing campaign for qualifying productions. Under the new mayoral
administration, MOME maintains its strong commitment to fostering the Media and
Entertainment industry,y, ensuring
g its services evolve to address the latest needs of companies
p
and workers living, working and operating within the city.

Media and Entertainment in NYC-Final.pptx 2


Executive summary (I)
Continued growth of filmed entertainment industry in NYC driven by strong expansion in scripted television
• NYC has benefited from this trend, with FTE (full time equivalent) employment growth of 3.1% per year 2011-14,
from 94K to 104K FTEs, and production spending growth of 6.4% per year, reaching $8.7 billion in '14
• Total number of New Yorkers employed in filmed entertainment has held stable at ~130K, with crews increasingly
able to work year-round on productions, building sustainable and predictable careers

TV is a standout success story, with 14.8% annualized FTE growth and 17.0% annualized spending increase
• Widespread adoption of new TV viewing platforms has intensified competition for TV audiences
• More networks now commissioning original TV content, including pre-existing cable networks (Bravo, Starz, AMC)
as well
e as new
e o online
epplayers
aye s ((Netflix,
e , Hulu,
u u, Amazon)
a o )
• New series typically 8-12 episodes (vs. traditional 20+ for broadcast), with increasing turnover of shows – proactive

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approach to attracting new pilots and shows will be important to maintain a strong pipeline of projects
• 2011-2014 saw a decline in head office FTEs for cable and broadcast of 3.7% and 0.8% respectively, as support
functions are consolidated and moved out of NYC
NYC, and companies re-orient toward digital / data-centric talent

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• In addition to production FTEs/spend, live TV filming estimated to generate ~$45M in tourism spend each year

Movie production in NYC much more variable, as a result of dollars being concentrated in 'tentpole1' films
the US2 , causing

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• F
Fewer but
b t larger
l major
j studio
t di movies
i produced
d d each
h year iin th i variability
i bilit in
i NYC movie
i production
d ti
• Decision to locate a production in NYC driven by a broad range of factors including: Script, cost, preference of key
talent, availability of stage, and potential complexities associated with filming desired action sequences and stunts
• Increasing fluidity between TV and movie production jobs helps buffer the workforce from this variability

1. A "tentpole" production is a movie or television show that supports the financial performance of a movie studio or television network 2. e.g., looking at the top 100 grossing movies each year '11-
'14 vs. '01-'04 , we see a 16% decline in the total number of movies released by the major studios and their subsidiaries, with a 33% decline in movies with budgets <100m
Media and Entertainment in NYC-Final.pptx 3
Executive summary (II)
NYC is one of only three cities in the world (along with LA, London) with a filming community large enough to
enable a production to be made without needing any roles to be brought in from outside – cast, ATL or BTL1
• IIn addition
dditi tot mainstream
i t productions,
d ti NYC also
l home
h to
t a thriving
th i i iindie
di movie
i scene, and
d th
the llargestt
concentration of documentary production in the US

Other media and entertainment in NYC


• Theatre
Th t iin NYC hhas seen a steady
t d upward d ttrend
d iin employment
l t (2
(2.1%
1% annuall growth),
th) and
d strong
t growth
th iin
revenues (up 5.5% per year 11 to '14) due to diversification of audiences and shows, and cross pollination of
stories and acting talent from TV and film
• Publishing FTEs (full time equivalents) stabilizing, with 0.4% annualized growth from '11 to '14. Revenues grew
2 2% per year iin th
2.2% the same period,
i d d
due tto di
digital
it l circulation,
i l ti pricing,
i i and
d iinvestments
t t iin online
li content
t t e.g., video
id

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• NYC ad agencies capturing strong growth as their industry consolidates, shifts to digital, with FTEs growing at
5.3% per year, and revenues rising at 11.8% per year from '11 to '14

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N
New media:
di Digital
Di it l media
di and
d entertainment
t t i t in
i NYC,
NYC and
d venture
t capital
it l funding
f di
• 2014 was a blockbuster year for funding of digital media and entertainment in NYC, with ~$1.5B of capital invested
• Job growth also driven by expansion of NY offices of big-tech players: Facebook, Twitter, and Google all have a
substantial Sales and Marketing presence in NYC, as well as growing Engineering teams.

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In aggregate, the Media and Entertainment sector remains a highly significant source of revenues and
employment for NYC
• Employs ~290k FTEs in total, and outperformed overall NYC and US economies through the financial crisis
• Industry across the US is increasingly aware of challenges of diversity, with stakeholders taking steps to address
the issue. But there remains much room for improvement, and an ongoing dialog on the topic will be critical in
ensuing commitments translate into outcomes
ATL =and
Media above the line, "creative"
Entertainment cast and crew; BTL = below the line crew
in NYC-Final.pptx 4
Defining boundaries of the Media and Entertainment sector
Sub-sectors in-scope for NYC market sizing and trends assessment

Other
Fil and
Film d TV t diti
traditional
l media
di N
New media
di O t f
Out-of-scope

Filmed Music
Advertising/PR Digital
entertainment
Includes commercials, TV Includes agencies Includes digital media and Live events
shows and films. News (advertising, media buying, entertainment companies, • Concerts
included under public relations, promotion, social media, and internet
broadcasting and cable digital and direct publishing, both
• Sports
marketing)g) p
established and start-ups
Associated
Broadcasting

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Digital arms of traditional subsectors
and Cable Publishing media not included realizing
Includes all TV stations,
Includes books, second-order
TV networks
networks, cable

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newspaper, magazines, Media/tech
M di /t h VC economic
networks, radio stations
and satellite. Does not news services (AP, and incubators impacts
include cable distribution Thomson, Bloomberg) Includes VCs that invest in
digital media and have a
presence in NY

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Included in
TV tourism1 Theatre2
employment,
Includes tourism Includes Broadway, other not separately
specifically driven by TV theatre analyzed
show
h ttapings
i

Key changes since 2012 report: Inclusion of tourism and theatre. Refocusing of digital section on media and entertainment only
1. Based on survey of TV show taping attendees. Includes only tourists citing taping as deciding or important reason to visit NYC. 2. Economic impact as estimated by The Broadway League.
Media and Entertainment in NYC-Final.pptx 5
Agenda
1 The TV and movie industry
• Economic impact in NYC
• Television:
– National trends
– Productions in NYC
– NYC tourism
• Movies:
– National trends
– Productions in NYC

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– NYC indie scene and documentaries
• NYC talent

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2 Other Media and Entertainment in NYC
• Theatre, Publishing, Advertising/PR agencies

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3 New media in NYC: Digital media and entertainment companies and funding
4 Total economic impact of Media and Entertainment in NYC
• Diversity in the US media industry
5 Positioning NYC for the future
Media and Entertainment in NYC-Final.pptx 6
1

Multiple reasons productions choose to film in NYC


Relative importance of each factor varies by production

Talent
St
Story Lead actor/director
NYC often explicitly based in NYC, prefer to
featured in stories: film locally, e.g.:
• Iconic US urban • Madam Secretary
environment, skyline • The Good Wife
• Rich real-life history • The Blacklist
• A 'walking city', lends itself • Unbreakable
to coincidence, storytelling Kimmyy Schmidt
• Center
C t off literature,
lit t

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journalism – concentration
of storytellers

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Crew base, State tax credit
Enables NYC to be cost
infrastructure competitive with other
• NYC has quality crew

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l
locations,
ti especially
i ll
and stage capacity to factoring in other savings:
support a great many • Little/no need to fly talent
projects per year – e.g., to NYC
the city readily hosted • Wide range of 'looks'
looks
46 TV shows in '14 may avoid relocation
costs

Media and Entertainment in NYC-Final.pptx 7


1
NYC filmed production industry has seen FTE growth from 94K
to 104K since 2011, bringing dependable year-round
year round employment

Filmed production work in terms of FTEs


(full time equivalents) continues to grow
(full-time Growth concentrated in TV
NYC FTEs (K) Annual Strong growth in filmed entertainment
120 growth (production), driven by scripted TV
3.1%
11- 14
'11-'14 • TV exhibiting consistent growth since 2011
104 renewal of tax credit; growth expected to
101
100 2.1% 97 -3.7% continue through next ~5 years
94
• Crews increasingly able to work all year on
87 86 88
83 0 8%
0.8% productions Total # employed is stable at
productions.
81 82
~130K, but utilization has strongly increased1

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80 78 78
72 • Film has been more variable: Strong in 2012
and 2013, with drop in 2014 as fewer
6 5%
6.5% blockbusters shot in NYC

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60

At the corporate level there has been some


40 streamlining of non-creative jobs
’02
02 ’03
03 ’04
04 ’05
05 ’06
06 ’07
07 ’08
08 ’09
09 ’10
10 ’11
11 ’12
12 ’13
13 ’14
14 • Dip in head-office
head office and news jobs at cable

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Example companies: networks (e.g., due to backoffice
Cable networks2 CNN Bravo FOX NEWS COMEDY
Channel CENTRAL HQ and news consolidation/offshoring of some roles)
Broadcasting2 4 NEW YORK WCBS-TV NEW YORK THiRTEEN FTEs only • Broadcast holding relatively stable, at 0.8%
Filmed entertainment1 Bravo STEINER
STUDIOS
AMC
NETWORKS
TIMES SQUARE
STUDIOS LTD  Incl. content for annual growth
broadcast/cable
1. Many people in the filmed entertainment industry are short-term employees. 130K total represents 104K FTE jobs, based on latest view of production and employment trends 2. Employees
engaged primarily in producing taped content are captured under "filmed entertainment". 3. Note that for Filmed Entertainment includes both core production and production relates activities.
Source:
Media andBLS data, BCG
Entertainment analysis for filmed entertainment. Note: Tax credit introduced 2005; expanded 2008; extended in 2011 through 2019.
in NYC-Final.pptx 8
1
NYC filmed production spending has increased 6.4% per
year since 2011, reaching a total of $8.7B in 2014

Filmed production industry Largely due to increased production,


spend in NYC also on the rise not cost rises

Spend ($B) Annual As with growth in FTE (full time equivalent)


growth employment, spending growth driven by TV
10
6.4% '11-'14 • Proliferation of networks commissioning
8.7
scripted content (2 in 2002, 18 in 2014), as
8 7.8 new platforms fuel competition for audience
7.2 7.3 -13.6%
6.2% • Unscripted has also grown rapidly since
6 3 6.3
6.3 mid 2000s due to reality TV
mid-2000s
60
6.0
6 5.5 5.6 5.4 6.6%

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4.9
4.6
Decline in spend for commercials
4.2 • Shift toward fewer, high-value productions,
4
with remainder increasingly
g y made in house

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by advertiser
17.8%
2
NY state tax credit remains a key enabler for
production in NYC
• Prior to incentive,
incentive productions would film

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0
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 elsewhere, only visit NYC for "beauty shots"
• Post-production credit has attracted projects
Other productions3 Film TV
Commercials News4
where primary filming was outside NY state
Stakeholder interviews suggest 2-3% annual
cost inflation across production types
Source: BCG analysis for filmed entertainment
Media and Entertainment in NYC-Final.pptx 9
1
Nationwide, we see strong shifts in filmed entertainment
toward scripted television series

Multiple changes in TV networks competing for audience by


how viewers experience TV investing in high quality scripted content

Content & channel "There's a drive for content because of the cable
fragmentation
g and internet platforms that didn't
didn t exist before
before"
• TV studio executive

Connected TVs "We've learned that... a [Netflix] viewer is going to


watch on average,
watch, average 2½ episodes a night"

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• Cindy Holland, VP of Original Programming, Netflix1
Place shifting
"The quality of TV has increased tremendously
because the content for mid
mid-budget
budget films is now

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on TV; that's where the audience has gone"
Multi-screening • Film studio executive

"With so much high-end scripted content, talent is

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f
flowing freely
f between ffilm and TV... no longer
Time shifting segmented between the two"
• Film location manager

"We hire the same people and shoot at the same


Interactive/personalized
production value as feature films"
content • Cable network executive
1. As cited
Media in The Hollywood
and Entertainment Reporter.
in NYC-Final.pptx 10
1
Several US cable networks, online platforms have recently
commissioned original scripted content for the first time

Timeline of original
g scripted
p content creation (nationwide,
( with illustrative show titles))

2010 2011 2012 2013 2014 2015


Amazon Alpha
Mozart
In The Jungle The Man In
The High
Instant Video House
Castle
Online
e

The A Hulu Original

hulu Battleground Awesomes Deadbeat East Los


High
Unbreakable
House Of Orange Is Marco Kimmy
NETFLIX Cards
The New
Black Polo Schmidt
Marvel

Daredevil
Girlfriend’s
Bravo

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Guide To Divorce
networks

Odd Mom
1 Out
CINEMAX
1 Hunted Banshee
From Steven Soderbergh

The Knick
Pre-exxisting cable n

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MTV Teen
Wolf
Awkward Faking It Finding
Carter
starz 2 Torchwood
Miracle Day
Boss
Da Vincis's
Demons Power

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ttruTV F i d Of
Friends
The People

Tvland Hot In
Cleveland
Happily
Divorced Kirstie Younger
Laugh More

Scripted content seen to "anchor" a channel's lineup by


creating loyalty among viewers/subscribers
1. Excludes Max in the Dark and Strike Back (since it aired first in the UK) 2. Half-hour and longer programming.
Media and Entertainment in NYC-Final.pptx 11
1

US scripted shows shifting towards shorter seasons


Short-run content originally limited to cable
cable, but broadcast now also introducing short-run shows

'TV
TV Guide
Guide' highly
highly-anticipated
anticipated debut shows in 2009 and 2014
- National, not specific to NYC productions

2009 2014
The
Accidentally Flash 'Black.Ish abc Cristela abc The Flash Gracepoint NBC
On Purpose
CBS Cleveland FOX Community NBC
forward
abc
Show
Cougar Melrose FOX THE CW The Mysteries
Full-length The
Forgotten
abc Town
abc Thegoodwife CBS Place
THE CW Forever abc Gotham
Of Laura

season Glee FOX Mercy


Ncis:
THE CW The Middle abc New OrleansCBS Marryme NBC Madam Secretary CBS
Ncis:
New Orleans
CBS
The Vampire Jane Th
J The
Modern Family abc Trauma NBC V abc THE CW Stalker CBS Virgin
THE CW Scorpion CBS
Diaries

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How To
Get Away
Short-run Bad
Judge
NBC Constantine NBC
The
Mccarthys
CBS With
The Beautiful Murder
season Life THE CW
Red Band State Of

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(b
(broadcast)
d t) b
abc Society
FOX Affairs
NBC M l
Mulaney FOX

The Affair SHOWTIME Happyland MTV Houdini


Short-run
Bored To H BBC
season Death
HBO White Collar usa
HISTORY
Intruders
AMERICA
Kingdom

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( bl )
(cable) D
DIRECTV
Survivor's
Remorse
starz Z Nation Syfy

Several cable networks sponsoring


original scripted content for the first
time (e
(e.g.
g History,
History Starz,
Starz Syfy)

Note: Full-length season is defined as 18 episodes or more; short-run seasons are fewer than 18 episodes.
Source: TV Guide 2009 and 2014 Fall TV Previews.
Media and Entertainment in NYC-Final.pptx 12
1

National trends reflected in NYC TV productions

NYC seeing more scripted shows ... produced and


produced, esp. short-run seasons... distributed by more networks
# scripted shows produced in NYC Networks sponsoring NYC-produced scripted TV
50 20 hulu
Long-run series Amazon
46 shows in instant video
Short-run series
2014 Starz

40 MTV
Blue Bloods 15 Tvland
CINEMAX

Royal Pains TNT


30 NETFLIX NETFLIX

A rights reserved.
VH1 Bravo
Thegoodwife 10 COMEDY COMEDY COMEDY
CENTRAL CENTRAL CENTRAL

20 AMC FOX tru tv


FOX USA FOX

onsulting Group, Inc. All


The FOX USA HBO USA
Affair HBO HBO FX HBO
30 Rock
5 FX FX THE CW FX
10 Power THE CW THE CW SHOWTIME SHOWTIME
Hope & Faith Nurse
Jackie FOX CBS SHOWTIME SHOWTIME CBS CBS
Rescue Flight Of The HBO NBC NBC NBC CBS NBC NBC
Law & Order Girls
Me Conchords NBC abc abc abc NBC abc abc
0 0

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’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’02 ’04 ’06 ’08 ’10 ’12 ’14

# scripted
11 12 11 17 15 18 23 20 21 24 27 29 46 # networks: 2 3 3 7 10 12 19
shows:

Note: Full-length season is defined as 18 episodes or more; short-run seasons are fewer than 18 episodes. Shows listed on left-hand-side graph are illustrative only.
Source: MOME permit data.
Media and Entertainment in NYC-Final.pptx 13
1
NYC TV production FTEs and spending has increased
substantially since 2002, accelerating since 2010
Both scripted and
unscripted TV have seen FTE (full ... with similar increases in total
time equivalent) employment grow... production spending

Annual Annual
T t l NYC FTEs
Total FTE (K) growth T t l NYC spend
Total d ($M) 17.0% growth
40 '11-'14 '11-'14
5,000 4,696
14.8%

31 4,000 6.9% 3,718


30 3,470 15 6%
15.6%
4.8%

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25
23 13.4% 2,595 2,495
2,931
3,000
20 1,967 2,543
20 19 1,608 2,067
18 18 2,129
16
15 16 2 000
2,000
1,688

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13 14 13 1,611

10 15.6% 17.8%
1,000
Scripted

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0 U
Unscripted
i t d 0
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14

Blue Bloods The Real Minuto Para


Scripted: 1hr dramas,
dramas Unscripted: Talk shows
shows, reality shows
shows, The Daily Show
WITH JON STEWART Housewives Ganar
OF NEW YORK CITY
30min series e.g.: The Good Orange Is The game shows and other types e.g.:
Girls Bethenny Wendy America's got
Wife New Black THE WENDY WILLIAMS SHOW Talent

Source: MOME permitting and city incentive application data; BCG Filmed Entertainment model. Spending estimates include 2-3% annual inflation.
Media and Entertainment in NYC-Final.pptx 14
1
Increase in TV production has provided opportunity for
crews to work year-round
year round by combining projects

TV p
production once highly
g y seasonal – now a y
year-round jjob for many
y
Jan Orange Is Jan Allegiance
The New
2000 2014 Black
Power
Oct April Alpha
Law & Order
Special
p Victims Unit House
Law & Order Oct April
Third Watch July

Most shows produced on established TV Thegoodwife


season, standardized across networks, Boardwalk
Empire
leaving crews with gaps between projects
Girls

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July

Film/TV Outside work / More 8-12 episode shows (e.g. Power, Girls – 10 eps. each),
vacation departure from established TV season allow crew to combine
TV show examples are illustrative only. projects into year-round employment

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Year-round filming schedule offers crews stability, even drawing talent from feature films
" Having so much work here, and getting more " TV has moved beyond formulaic content –
" Right now TV is so hot, it's easy for people because of how many writers, directors,
p y
employment p
per yyear, makes [[film/TV]] more of a
to work on show after show"
show

Copyright © 2015 by The Boston Co


'real job' and a sustainable life in New York" and producers are moving from feature
• TV producer films into high-end TV"
• TV producer
• Broadcast network executive

FTE1 growth has primarily manifested in greater utilization of


crews – total number of people employed stable at 130K
1. FTE = full-time equivalent (annualized). For example, a position requiring one person, fully committed, for 3 months would be 0.25 FTE.
Media and Entertainment in NYC-Final.pptx 15
1
Growing churn in TV requires continued effort to attract
pilots – as almost all shows stay in city where pilot was filmed

TV show 'churn' increasing: Higher Almost all shows stay in pilot city; NYC
turnover results in more pilots each yr is second only to LA, but room to grow

TV series survival rate1 , % # broadcast pilots3 ~5%


Almost all successful
100 100 pilots
il t stay
t in it 4
i same city

Move to new location


80 80 Stay in pilot location
~95%

Broadcast TV pilots, 2012-20143

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60 60
150 ~130

As fewer shows survive, need to


40 attract more pilots to maintain level 40

onsulting Group, Inc. A


100
of TV production in NYC Series
survival ~60
20 20 50
Pilots
~30
~20

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0 0 0
’08 ’09 ’10 ’11 ’12 ’13 ’14 LA New York Vancouver Other

Attracting pilots key to future health of NYC TV industry


1. "Survival rate" defined as the % of shows on air in a given year that were/will be on air the following year. Source: MediaRedef, originally from SNL Kagan/FX Research/NY Mag. 2. Source:
TV by the Numbers. 3. Source: The Hollywood Reporter pilot season roundup (broadcast only). Chart of pilots by location includes only pilots for which a filming location was available (~80%
of total pilots). 4. Comparison of final filming location to Hollywood Reporter pilot location
Media and Entertainment in NYC-Final.pptx 16
1
Live filming attracts many tourists to NYC; most are day-
trips, but overnight visitors typically stay 3-5
3 5 nights

% from outside NY metro varies Most "show tourists"1 are daytrippers from
significantly across shows surveyed region, but some do travel from rest of US
% by area of origin % of total audience
100 80
NY metro Show not a deciding reason for visit to NYC
Within region "Show tourists": Show was important or deciding
80 (NYS/NJ/CT/PA) reason to visit NYC
Other US 60
International
60

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40
2
29
40

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20 37
20
22
9
1

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0 0
Today Late The Saturday
Show Tonight Night Live NYS/NJ/CT/PA, Other US International
With Show incl. NY metro
David Starring
Letterman Jimmy Typical length 3-5 7+
F ll
Fallon Daytrip
of stay: nights days

1. "Show tourists" are tourists who indicated that their trip is entirely or mainly for the purpose of seeing the live taping. Today, Tonight, Letterman, SNL results weighted to reflect total mix of
shows taping in NYC, based on genre and ticketing policy (how far in advance tickets are issued, whether admission is guaranteed, etc.).
Note: SNL includes dress rehearsal and live show.
Media and Entertainment in NYC-Final.pptx 17
1

TV audiences generate ~$45M in tourist revenue for NYC


Conservative estimate of revenue generated from visitors who come to NYC to watch filming

14 shows filmed live in NYC,


with ~575k total yearly audience... ... stimulating ~$45M tourist spending
Studio Shows / Annual Assuming TV show attendees spend on par
audience year1 audience
with other "cultural tourists":
Letterman 460 190 87,400 • ~$250/day for international overnight
SNL 330 22+223 14,520 visitors, $375/day for domestic overnight
Tonight 290 190 55,100 visitors, $30/day (conservative assumption)
Today ~2002 260 ~52 000
~52,000
for daytrip visitors4
Survey of audience members indicated that

All rights reserved.


Rachel Ray 120 190 22,800
Wendy Williams 150 190 28,500 show was important or deciding factor for
Dr. Oz 180 190 34,200 ~50% of out-of-town4 visits ("show tourists")
• ~280k
280k additional tourist-days

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Daily Show 200 190 38,000
– ~110k overnight visitors, ~170k day-trips
GMA ~200 260 ~52,000
• $45M total additional tourist spending as
The View 185 190 35,150
a result of TV show tapings
The Chew 155 190 ,
29,450

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Does not include ~50% of out-of-town visits
Late Night 290 190 47,500
for which M&E was a factor in choosing
Kelly & Michael 230 190 43,700
NYC, but not a critical one
Meredith Vieira 180 190 34,200 • Including many overnight visitors, as most
Total ~575k day-trippers indicate M&E is deciding factor
1. Standard assumptions used to compute number of episodes. SNL based on permit data. 2. Estimated average. 3. SNL has 22 performances, plus 22 dress rehearsals (with separate audiences)
4. Excludes attendees from within the five boroughs, who are not counted as "out-of-town".
Media and Entertainment in NYC-Final.pptx 18
1
In movies, across the industry we see concentration of
dollars into large 'tentpole'
tentpole productions

7X growth in dollars spent on $150M+ budget As a result of piracy and


movies in 2011-2014 vs. in 2001-2004 internationalization
Piracy risk increases pressure
Total budget ($B) spent on top 100 grossing movies to generate revenues early at
per year, 2001-2004
2001 2004 vs. 2011
2011-2014,
2014 split
lit b
by b
budget
d t size
i
box office
10 • Audiences more likely to go
2001-2004
8 watch 'tentpole' movies in
2011-2014
8 theaters vs. at home
• Studios could previously rely

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6 on home video revenues,
5 5 eroded by piracy
4 4
4 3 3
3

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3
2 2
International audiences,
2 2 1 especially Asia, highly receptive
1
to movies with strong VFX
0 • >50% of revenues now

Copyright © 2015 by The Boston Co


$0M- $25M- $50M- $75M- $100M- $125M- $150M+ generated overseas
$25M $50M $75M $100M $125M $150M
Industry shifting away from
% change -9% -5% -27% -29% +32% +54% +697%
midsize movies
Total change '01-'04 vs.'11-'14 • Typically romantic comedies,
dramas
Source: IMDB, BoxOfficeMojo, BCG analysis
Media and Entertainment in NYC-Final.pptx 19
1
National movie industry also "de-risking": dollars flowing
into sequels and widely recognized characters, stories

Strong growth in dollars spent on movies with To enhance probability of


comic book/other known concepts in '11-'14 vs. '01-'04 large box office sales

Total budget dollars ($B), for top 100 grossing movies per year, Concentration of movies in
2001-2004 vs. 2011-2014
Remake 'known concepts' already
15 Sequel underway a decade ago
First time in a movie • Harry Potter, Lord of the Rings
series both released from 2001
10 10
10 9 • Resulted in large share of
8 production dollars in 'hit books'

All rights reserved.


5 2011-2014 has seen significant
5 4 expansion of this trend
3
• Diversification beyond books,
books

onsulting Group, Inc. A


1
into comic book characters
New concept Hit book Popular comic Other known concept
and other known concepts
Story/characters e.g., Harry e.g., Spider-Man e.g., TV, video game, historic e.g., Lego Movie, Ninja Turtles
Potter,
Potter Hunger event or sequel/ remake of
event,

Copyright © 2015 by The Boston Co


nott known
k
audience prior Games 'new concept' movies (Lara Overall growth in share of
to movie Croft, Smurfs, Noah, Dumb & spend on sequels/remakes vs.
e.g., Dumb & Dumber To) first-time productions
Dumber • e.g.,
g from 43% to 58% of
Concept familiar to audience
comic movie dollars; 64% to
% change -11% -23% +121% +34%
75% for 'other known concept'
Total change '01-'04 vs.'11-'14
Source:
Media andIMDB, BoxOfficeMojo,
Entertainment BCG analysis
in NYC-Final.pptx 20
1
NYC film production costs and FTEs (full time equivalents)
more variable than for television

NYC film production has ...as market segments between


been variable during the period... bigger blockbusters and low budget films

Shift in movie industry toward small number


Production spend ($M) FTEs (K)
of blockbusters and more low-budgetg indies
2,000
-13.6%
12 • Fewer mid-budget films (esp. romantic
6.1%
comedies), as studios squeeze budgets
10 • Talent, content shifting to TV
,
1,500 1,378 1,360
, 1,402 1,450
1 311
1,311 ... results in wider year-on-year
year on year variation in
1,262 1,257 8

All rights reserved.


1,044 1,064 movie production spend in NYC
• NYC filming typically dependent on1:
866
1,000 824 846 902 6 – Whether scripts ask for urban location2
vs BTL costs3
– Ratio of ATL vs.

onsulting Group, Inc. A


-8.6%
5.3% 4 – Preference of key talent to film in NYC
500 – Stage availability, given increased TV
2 production in NYC
– Ability of production team to work around

Copyright © 2015 by The Boston Co


0 0
the complexities of filming action
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’101 ’11 ’12 ’13 ’14 sequences and stunts in NYC
<10M >50M Some bigg films expected
p to film in NYC in '15
Spend FTE
$10M-$50M FTEs growth rate growth rate • e.g. Ninja Turtles sequel
1. Omits tax credit, assumed to remain stable .2. With notable exceptions e.g., 'Noah', 'This is Where I Leave You'. 3. ATL costs not eligible for tax credit.
Source: MOME permitting and city incentive application data; BCG Filmed Entertainment model
Media and Entertainment in NYC-Final.pptx 21
1
Production related activities also an important source of
jobs in NYC, contributing 37K toward the total 104K FTEs

Production related FTEs (full time ...compounding


compounding the importance of a
equivalents) grew 14% since 2011... strong NYC filmed production industry

Total NYC FTEs (K) Production related jobs include all direct
+14%
supporting functions for film production
40
37 37 • E.g. equipment rental, transportation,
35
35 33
construction, costumes, laundry, direct food
29 30
31 service, etc., often provided by small
30 28 28
2
27 businesses
businesses.
26 25

All rights reserved.


25 24
104K FTEs employed by the NYC filmed
20 Production entertainment industry in 2014 includes both
related
direct employment on a production
production, as well

onsulting Group, Inc. A


15
as these 37K production-related FTEs
10
This does NOT take into account the vast
5
indirect spend film brings to the city which

Copyright © 2015 by The Boston Co


0 further compounds the industry impact
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 • e.g. tourism, restaurants, hotels, etc.

Note: Production-related employment estimated by MPAA. Since not direct employment, excluded from BCG RIMS analysis.
Source: Production related jobs calculated based on MPAA methodology for NYS, conservatively estimating that NYC's share of state production-related jobs matches its share of direct state
production jobs.
Media and Entertainment in NYC-Final.pptx 22
1
In addition to 104K direct production and production-
related FTEs, filming supports ~20K
20K NYC jobs indirectly

After a production spends money in NYC, that money continues to ripple through NYC's
NYC s
economy – creating more economic activity and FTEs (full time equivalent jobs)

~$8.7B spent on NYC NYC vendors, crew in turn spend money on food, ...generating additional
d ti
productions i 2014
in rent products (some in-city,
rent, in city some outside) – l
employment t in
i NYC
$$ circulates through NYC economy...

• In-town BTL crew




In-town
In town ATL talent
Catering
... Indirect
support of

All rights reserved.


• Stage rental
additional
• ...
Inside NYC ~20k FTE
Crew member Deli owner pays Landlord pays
jobs in NYC1

onsulting Group, Inc. A


Direct support of buys lunch in rent in NYC... NYC college...
NYC...
~100k FTE (full time
equivalent) jobs

Copyright © 2015 by The Boston Co


Outside NYC
• Out-of-town ATL talent
... which includes ... and pays ... and takes a
• Out-of-town BTL crew
fruit from Long federal taxes vacation outside
• ... Island New York City

1. FTEs calculated using RIMS II Type I jobs multiplier (jobs-for-jobs), counting only direct employment (excl. production-related employment) and film ATL.
Note: Type I RIMS II multipliers used, as wages likely inflexible in short-term due to union contracts. Detailed industry multipliers compiled using 2002 Benchmark Input/Output Table and 2010
regional data (most recent detailed industry multipliers available from BEA).
Source: Bureau of Economic Analysis (Dept. of Commerce), RIMS division.
Media and Entertainment in NYC-Final.pptx 23
1

Indie scene is a key differentiator of NYC filmed production


Key contributing factors of flourishing indie scene in NYC – from interviews with industry leaders

Strong indie community Increasing affordability


Close knit group, with an indie 'mentality' Reduced cost of technology
• "Not competitive, people willing to help" • Previously needed lighting crew, grips, etc. - less essential
with new equipment
Distant from commercial lens of LA • Distribution, access to audience is now the key challenge
• "If you're in LA, you're signaling you want to be in the studio • "It's relatively easy to pull together a group of your friends and
system; NY makes movies for other reasons: art,art storytelling,
storytelling shoot something"
festivals, critical acclaim"

"...indie productions can access the same


"LA is consumed with the business of
exterior locations, same city 'energy' as a $100M
productions; NYC can focus on the craft"
blockbuster"
– NYC producer
– Union leader

All rights reserved.


Support from NY organizations Potential route into mainstream

onsulting Group, Inc. A


Festivals and awards: Tribeca, Gotham Awards, New York Film Some make a career from indie, prefer the "honesty" of the
Festival, NYC doc small-production world
• e.g., Patricia Clarkson
IFP labs and co-production market
...but many use independent movies as a chance to acquire

Copyright © 2015 by The Boston Co


State and city
cit support:
s pport State tax
ta credit;
credit MOME Permits and pro en skills,
proven skills as a path into unions
nions
location advice, Made in NY Media Center and location library

Film schools: High quality training "Indie movie industry... used as 'farm team' by major
studios, to test out talent"
–Indie
Indie post production executive
"Everything an indie film needs is here in NYC"
–Multiple interviewees

Media and Entertainment in NYC-Final.pptx 24


1

...and NYC dominates the US documentary industry


Particularly strong concentration of documentary production companies in Brooklyn Heights/DUMBO

Number of nominations received by production companies headquartered in each city, for feature-length
documentaries, at a selection of top-tier US award ceremonies, '11-'14: Academy Awards, Tribeca, Sundance, AFI docs1

B
B Europe
A
Sweden 3 1 Finland
Netherlands 8 Denmark
9 1 Lithuania
C UK 24 1 Poland
5
2 Germany
Belgium 11
1 Serbia
10 Unknown France 1 Georgia
Manhattan/ 2 Switzerland
A
US Brooklyn 3 Israel

S. Portland 1 Qatar
Canada 4 1

All rights reserved.


Cambridge 1
1 Seattle Boston 3 C Asia/Australasia
Georgetown 1 1 2
Newark 3 5
St. Paul 1 Philadelphia Other NY 1 1 1
1 Korea
Pittsburgh 1 1 1 1 1 China

onsulting Group, Inc. A


Wilmington 3 1 8
Chicago 4 1
Baltimore 21 5 3
1 Sacramento 2 4 DC 5
Cincinnati 1 1 1 India
7 Berkeley 3 Boulder Columbia 1 5 2
3 Silver Spring 2 1
9 San Francisco Wichita 2 Louisville Durham 3 96 3
1 2
1 Las Vegas 1 Philippines
13 2
48 1 Athens 2 1 1

Copyright © 2015 by The Boston Co


New York 3
Dallas 1 City 7
Los Angeles /
New Orleans
Santa Monica/ Austin 3 1 1 1 Melbourne
Venice 2
Houston
Miami Beach 1 Australia
3
2 US,
US state unknown
New Zealand 2
11 In NYC, unknown ZIP
1. First listed production company only; Some films nominated for multiple awards (e.g., in 2014: 1971, Dinosaur 13, Ivory Tower, The Overnighters, Virunga were selected twice). Each
nomination counted separately
Media and Entertainment in NYC-Final.pptx 25
1
Abundant local talent in NYC: Deep crew base and few
remaining gaps in post production. ATL varies widely by project
Response from expert interviews
Well established base of local NYC producers
producers, directors
directors, actors
• While ~70% of ATL is typically based in LA, NYC is home to most of the remainder of US ATL talent
• Strong film schools, Broadway provide a steady flow of future talent for NYC
• Out-of-town ATL typically relocates to NYC on a semi-permanent basis for television productions
– "Not hard to convince people from elsewhere to come to New York"
• ATL talent moving more fluidly than ever between film, TV, and commercials
Writing is a key role remaining strongly LA-centric (outside of comedy/variety)
Above the line • Small share of sitcom/episodic TV – with exceptions, e.g.: Boardwalk Empire, Blue Bloods, 30 Rock
• Perceived lack of 'critical
critical mass'
mass of TV writers in NYC – many feel need to move out West "to
to make it"
it
• Studios can be reluctant to locate writing rooms away from LA-based creative executives

All rights reserved.


Even with 46 TV shows, multiple movies in 2014, talent pool broad enough to staff crews locally
• Greater demand for crews
crews, but still possible to pull together a world class team

onsulting Group, Inc. A


• A limited number of roles typically less abundant in NYC, e.g. senior construction coordinators,
production designers, mechanical effects (typically come from LA for big movies)
Below the line
Possible to pull from Broadway talent too, as required

Copyright © 2015 by The Boston Co


Post production in NYC reaching scale, as a result of tax credit
• Strong multidisciplinary skills in NY due to co-location of commercials, branded content
• Post production is agnostic of where principal photography occurs; driven by location preference of
director. Growth of directing talent in NYC therefore benefits NYC post production industry
• Can be challenging to find senior freelance supervisors at present
present, but talent expected to scale
Post – by rising through the ranks, as well as relocating from other cities
production • Movies/TV increasingly reliant on VFX; talent expected to grow in near term, e.g. from SUNY Buffalo
Media and Entertainment in NYC-Final.pptx 26
Agenda
1 The TV and movie industry
• Economic impact in NYC
• Television:
– National trends
– Productions in NYC
– NYC tourism
• Movies:
– National trends
– Productions in NYC

All rights reserved.


– NYC indie scene and documentaries
• NYC talent

onsulting Group, Inc. A


2 Other Media and Entertainment in NYC
• Theatre, Publishing, Advertising/PR agencies

Copyright © 2015 by The Boston Co


3 New media in NYC: Digital media and entertainment companies and funding
4 Total economic impact of Media and Entertainment in NYC
• Diversity in the US media industry
5 Positioning NYC for the future
Media and Entertainment in NYC-Final.pptx 27
2
Strong growth in Broadway grosses, and steady upward
trend in overall theatre employment

Theatre employment, Broadway ticket ...Fueled by effort to expand audience,


revenues rising steadily... with new and varied content
NYC FTEs (K) Broadway gross ($B) Theatre, incl. Broadway, continues steady
16 2.5 Annual growth in employment
g p y and revenue
2 1%
2.1%
growth
1.3% 14
• Employment growing steadily
13 13 13 13 13 13 '11-'14
2.0
• Strong growth in ticket revenue
12 11 11 12 12 12 12 2.0% – Revenue outpaces growth in attendance
– Efforts to attract new audience p
paying
y g
5.5% 1.5 off, e.g. ¡Viva Broadway!

All rights reserved.


8
5.9% Cross-pollination with filmed entertainment
1.0
2.1% helps both industries connect with audience

onsulting Group, Inc. A


• Familiar
F ili actors, stories, i characters
h ffrom fil
film
4
0.5 or TV help attract new audiences, e.g.:
– Disney, Matilda bring children/families
– Rocky appealed to men, sport fans
0 00
0.0

Copyright © 2015 by The Boston Co


– Stars
St ((e.g. N
Neilil P
Patrick
ti kHHarris)
i )ddo
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
limited-run Broadway, attract fans to
Other theatrical FTEs shows – a trend initiated by '07-08
Dance company FTEs FTE Revenue writers' strike
Theatre FTEs growth
th rate
t growth
th rate
t • Broadway
B d shows
h adapted
d t d ffor screen, e.g.
Broadway grosses August: Osage County; Jersey Boys
Source: BLS (employment data), The Broadway League (Broadway ticket revenue). Note: BLS data includes direct employees of theatre and dance companies; it does not include other
ancillary industries (e.g. orchestras, law firms, accountants, advertising agencies), even if primarily focused on the theatre industry.
Media and Entertainment in NYC-Final.pptx 28
2
Publishing jobs in decline, revenues recovering slowly as
industry shifts to digital

FTEs still declining 2011 to 2014, but ... as digital revenues offset
less sharply than in 2002 to 2010... contraction of print sales and ads
NYC FTEs (K) NYC revenues ($B) Persistent challenges for industry with shift
80 55 Annual away from print sales and traditional
50
growth advertising
70
-2.0%
45
'11-'14 • Advertisers, readers shift to digital, mobile –
-0.4%
60 though print players remain most trusted
55 53 54 54 55 56 56 40
51 providers of content, even in digital space
50 48 35
46 47 46 45 • Newspaper revenues have recovered

All rights reserved.


30 -17.0% somewhat since 2011 due to online
40
25 -2.1% subscriptions, but magazine revenues
30
2.2% 20 1.9% continue to fall

onsulting Group, Inc. A


20 1.6% 15
10 NYC employment affected by backoffice
10 -2.1% consolidation, may be further impacted if
5
digital acquisitions made outside of NYC
0 0

Copyright © 2015 by The Boston Co


• Central functions moving to low-cost areas
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
or offshore; executives stay in NYC
Avg salary
($K)
83 88 91 95 101 106 112 106 108 115 120 123 140 • Future acquisitions in digital will likely
Other publishing FTEs1 Magazine FTEs
operate from their original location vs. be
Newspaper FTEs Total revenues
relocated. Many already in NYC, but others
Book FTEs FTE Revenue in Silicon Valley
growth rate growth rate
Source: BLS (FTE, salary data); AdAge, NAA, MPA, Bookstat (revenue data) 1. "Other publishing" includes mailing lists/directories, phone books, calendars, etc.
Media and Entertainment in NYC-Final.pptx 29
2
Advertising/PR agencies continue to shift jobs to New York
amid slow national recovery

Ad FTEs (full time equivalent jobs) have ...As agencies evolve their
grown despite lower traditional ad spend offering toward digital, mobile
NYC FTEs (K) NYC revenues ($B) Strong growth in digital has offset flat or
80 22 Annual slightly declining market for print, TV ads
5.3% growth
20
70 '11-'14
62 64 18 US ad industry expected to remain strongly
2.3%
60 59 concentrated in NYC
54 55 16 3.8%
49
51 51 51 • Most new specialist digital agencies arising
50 47 14
44 44 45 1.9% in New York vs. Silicon Valley

All rights reserved.


12
40 11.8% • New services e.g., programmatic buying
10 benefit from access to finance trading talent
30 8

onsulting Group, Inc. A


20
5.7% 6 5.3% Agencies capturing growth by buying digital
4 firms, or building capability in-house
10
2
• Clients seeking holistic offering spanning
traditional and digital, vs. multiple partners
0 0

Copyright © 2015 by The Boston Co


– This benefits the major agencies of NYC
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
• Strong job market in digital intensifying in
Avg salary recent years. Main gap is senior leadership
93 96 99 105 107 111 113 109 115 119 120 123 132
($K)
(10+ years digital experience), as many in
O h FTEs
Other FTE T l revenues
Total that era left to join dot coms
PR agency FTEs FTE Revenue
Ad agency FTEs growth rate growth rate
Source: BLS, SNL Kagan, MOME Bookstat, MMA and BCG analyses
Media and Entertainment in NYC-Final.pptx 30
Agenda
1 The TV and movie industry
• Economic impact in NYC
• Television:
– National trends
– Productions in NYC
– NYC tourism
• Movies:
– National trends
– Productions in NYC

All rights reserved.


– NYC indie scene and documentaries
• NYC talent

onsulting Group, Inc. A


2 Other Media and Entertainment in NYC
• Theatre, Publishing, Advertising/PR agencies

Copyright © 2015 by The Boston Co


3 New media in NYC: Digital media and entertainment companies and funding
4 Total economic impact of Media and Entertainment in NYC
• Diversity in the US media industry
5 Positioning NYC for the future
Media and Entertainment in NYC-Final.pptx 31
3

2014 was a blockbuster year for digital media funding in NYC


~$1
$1.5B
5B invested.
invested Growth primarily coming from increase in valuations
valuations, vs
vs. number of deals

Media & Entertainment venture capital ... with NYC


investments increasing sharply... capturing greater US share
V t
Venture Capital
C it l MMedia
di and
dEEntertainment
t t i t iinvestments
t t ($M) % off annuall iinvestments
t t
6,000 5,748 80

Other
LA
NY 60

All rights reserved.


4,000 Silicon Valley
1,549 Silicon Valley
2,972
40 27% of national

onsulting Group, Inc. A


2,317 2,267 total in 2014
2,072
2,000 1,845 1,763 NY
1,506 1,512 526
1,347
1,178
20 Other
591 345
240
697 621 257 249

Copyright © 2015 by The Boston Co


271
9% of national
total in 2002 LA
0 0
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14

Source: PWC MoneyTree and Crains NY business, Gridley NY Digital Medias


Media and Entertainment in NYC-Final.pptx 32
3
double click

NYC's
NYC s digital and technology landscape TACODA

Activity 2007 2008 2009 2010 2011 2012 2013 2014


Yipit Shutterstock
betaworks BUDDY MEDIA MediaMath Raised $100M
art.Sy IPO, $77M
is founded appnexus foursquare bit.ly TREMOR Raised $500M
Digital StackExchange VIDEO Vice from A&E
companies Series A
Tumblr. Open RENTHERUNWAY IPO, $75M
Raised
founded or y
Sky Qiurky
Raised appnexus
pp $110M
S i A
Series SkillSlate fotolia $50M
funded hunch from WPP
Raised $150M FanDuel Raised $70M
LEARNVEST
from KKR

Google / YAHOO! salesforce Tumblr.


double click ($3.1B) AOL interclick YAHOO! Adobe fotolia
THE ($800M)
HUFFINGTON ($264M) BUDDY MEDIA $1.1B
Key digital ($745M) j2

All rights reserved.


YAHOO! / rm ($680M) Comcast Comcast POST
acquisitions ($315M) Google Zynga OMGPOP
DAILY ZIFF DAVIS rocketfuel [x+1]
($125M) NBC UNIVERSAL ($30B) Admeld ($183M) ($235M)
AOL / TACODA ($275M) CANDY ($165M)
($400M)

onsulting Group, Inc. A


Ongoing, expansion
IAC
Big tech Google techstars twitter facebook of big-tech in NYC
Announces
actions spin-offs of
announces Google facebook twitter
officially opens
comes to first non-CA
Interval ticketmaster Googleplex in open NYC offices
New York office to open
leisure New York City Rapid growth in 'we work' offices, providing
in NYC
group HSN tree.com space and community to NYC startups

Copyright © 2015 by The Boston Co


wework

Mayor releases
NYC creates NYC Digital MEDIA
NYC MediaNYC City-funding of first ever roadmap and Technion CENTRE
support 2020 initiatives start-up 'Chief Digital announces
announced incubators Cornell University
Officer' $100M ggrant for Opening of the Made in
position Applied Sciences Cornell and
NY Media Center by IFP,
Research Technion
in Brooklyn
Campus selected

Source: Gridley's Guide to Digital NY, CB Insights, CapIQ, AGC Partners, MOME
Media and Entertainment in NYC-Final.pptx 33
3
Influx of startup funding and continued growth of big tech
have fueled expansion of digital media & entertainment in NYC

Acceleration of growth in digital


media and entertainment employment Trends driving NYC figures
Proximity to traditional media provides inherent
NYC digital media and advantage for digital media and entertainment
entertainment FTEs (K) • e.g., strong links to revenue generation, as
22
21.7 marketing dollars still channeled through NYC-
+23% based agencies
20
18.1
18 Continued ggrowth of 'bigg tech' in NYC
16 • Google, Twitter, Facebook attracting top

All rights reserved.


15.1
engineering talent from across the US
14
11.8
• NYC offers alternative to tech monoculture in
12 +13% 11.1 Silicon Valley

onsulting Group, Inc. A


10
Over 6000 startups in NYC, of which ~450 are in
8 7.4 7.9
6.6 media and entertainment
6 5.2 • NYC particularly strong in ad tech, marketing tech
4.1 4.0 4.0 4.5
4 and editorial content

Copyright © 2015 by The Boston Co


2 • Continued potential for growth, as business
models evolve to link content and revenues
0
• Incubators and programs like Cornell Technion
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
helping to grow talent pool – but continued efforts
required
i d tto reach
h llevell off St
Stanford
f d – Berkeley
B k l –
Silicon Valley

Source: Digital.NYC, BLS, Gridley report, SNL Kagan and BCG analysis
Media and Entertainment in NYC-Final.pptx 34
Key chapters of 2015 report
1 The TV and movie industry
• Economic impact in NYC
• Television:
– National trends
– Productions in NYC
– NYC tourism
• Movies:
– National trends
– Productions in NYC

All rights reserved.


– NYC indie scene and documentaries
• NYC talent

onsulting Group, Inc. A


2 Other Media and Entertainment in NYC
• Theatre, Publishing, Advertising/PR agencies

Copyright © 2015 by The Boston Co


3 New media in NYC: Digital media and entertainment companies and funding
4 Total economic impact of Media and Entertainment in NYC
• Diversity in the US media industry
5 Positioning NYC for the future
Media and Entertainment in NYC-Final.pptx 35
4
In aggregate, ~290k FTEs (full time equivalent jobs)
employed across the media sector in NYC

NYC media sector has grown in ... with growth concentrated in


terms of employment and salaries...
salaries three sectors
Annual
NYC FTEs (K) NYC media sector seeing strong
growth
growth in filmed entertainment,
400 '11-'14
digital media,
media and advertising
350 3.3%
1.5% Filmed entertainment continues to
300 279 287 22.6%
249 258 249 252 261 266 grow strongly, led by TV
250 229 225 224 235 241 -0.5%
4.7% NYC a significant center of digital

All rights reserved.


200
media and entertainment
150
6.5% employment
100 • Fueled by rising VC investments,
investments

onsulting Group, Inc. A


-1.6% and expansion of big tech
50
4.1% presence e.g., Facebook, Twitter
0
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
Salaries continue to grow
grow, with

Copyright © 2015 by The Boston Co


Avg NY media NYC significantly above national
85 89 93 98 102 107 110 107 111 111 113 116 129
salary ($K)1
Avg US media average in media industry
54 56 59 61 64 69 71 72 75 79 83 89 92
salary ($K)
Digital Filmed entertainment
FTE
Cable and broadcasting Publishing and news
growth rate
Advertising Other2
1. Digital media and entertainment not included in national/NYC salary data, as figures not available 2.Includes theater
Source: BLS data, BCG analysis
Media and Entertainment in NYC-Final.pptx 36
4
Since 2011, NYC has generated 50% of US media sector
employment growth

US media sector has created ~50k Subsector shift has helped NYC
jobs; ~25k (50%) in NYC ('11-'14) overcome nationwide decline
Nationwide, media sector has shed jobs,
% NYC NYC job while NYC continues to hire
jjobs/total
b /t t l US 2002 2011 2014 l growth
th • NYC has gained share of US jobs across all
jobs2 since '11
sub-sectors
Filmed ent. 11.2% 12.2% 14.0% 21%
Strong growth in TV generates consistent
Advertising 12.4% 13.0% 17.4% 15% strength in filmed entertainment, despite

All rights reserved.


variability in movie production
Broadcasting
8.2% 10.5% 10.6% -1%
and cable
Salary growth across all NYC media sectors,
Publishing and

onsulting Group, Inc. A


7.7% 9.5% 10.3% -5% even in sectors that have cut jobs (e.g. print
news
publishing)
Total 9.4% 10.8% 12.5%
Average US
54k 79k 92k

Copyright © 2015 by The Boston Co


salary2
Average NYC
85k 111k 129k
salary

1. Using BLS data; BCG filmed entertainment model (using 2009 estimates – little change since) and focusing on refreshing extant views of data.
2. Digital media and entertainment not included here, as national figures not available
Media and Entertainment in NYC-Final.pptx 37
4
NYC Media and entertainment growth outperformed US
economy, overall NYC economy through the financial crisis

NYC media sector outperformed NYC ... losing fewer jobs in the downturn
and US economies through the crisis... and growing more rapidly in recovery

FTEs (2002=100)
140
J b lost
Jobs l t J b growth
Job th
Digital media, filmed entertainment
'08-'09 '11-'14
(led by TV) growing even faster
120 NYC media/ -3% 10%
entertainment 10 000 FTE lost
10,000 25 000 FTE
25,000

A rights reserved.
100 Total NYC -3% 5%
economy 110,000 FTE lost 180,000 FTE

onsulting Group, Inc. All


80
Total US -5% 5%
economy 6.2M FTE lost 6.0M FTE

Copyright © 2015 by The Boston Co


60
’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14

NYC media / entertainment FTEs


Total US employment

Source: BLS (unemployment rate, and employment numbers from QCEW – both for NYC only); BCG filmed entertainment model for filmed entertainment employment (within M&E).

Media and Entertainment in NYC-Final.pptx 38


4
Industry leaders in media and entertainment have
increasing awareness of diversity challenges across the US

Key challenges Description


Industry increasingly cognizant of the topic, but perceived urgency varies
Industry awareness/ • Appetite strongest where tangible benefit is perceived – in quality/availability of
prioritization content or talent, size of audience, or revenues
of the issue – e
e.g.,
g shows like Grey
Grey'ss Anatomy
Anatomy, Orange is the New Black
Black, that reflect the true
heterogeneity of the population in the US

Women and minority


Relatively few diverse candidates entering the industry 'pipeline' - in film
education and
schools or entry level jobs
awareness

All rights reserved.


Mentors and Minorities, women less likely to have network and mentors to coach them in
network building their career

onsulting Group, Inc. A


Financial Some skills e.g., writing, difficult to hone without access to financial resources,
constraints to provide support ahead of achieving regular employment in the industry

Studios
St di and d networks
t k increasingly
i i l taking
t ki fewer,
f larger
l bets
b t on 'tentpole'
't t l '

Copyright © 2015 by The Boston Co


Risk aversion productions – less likely to support someone with a less proven record, or to
provide a second chance if the first project isn't a hit

Gaining entry
Diversity relies on creating pathways to union membership
to unions

Media and Entertainment in NYC-Final.pptx 39


4
Multiple initiatives underway to address these
challenges
Key challenges Sample of actions/initiatives noted by industry experts across the US
• M
Mostt major
j media
di fifirms now iinclude
l d di
diversity
it as a key
k aspectt off their
th i hiring
hi i process, and
d ttrackk
Industry diversity metrics – but need to ensure diverse candidates advance up the ranks
• Illinois tax credit requires productions to actively consider diversity of BTL crews
awareness/
• Increasing breadth of publications promoting the issue, e.g., in filmed entertainment:
prioritization – Academia ((UCLA, San Diego g State University,
y Columbia))
off the
th issue
i – Diversity groups (NALIP, NAACP, Milken Institute, GLAAD)
– The press: Widespread commentary of diversity in awards nominees, winners

Women and • MOME supporting Brooklyn College Film School, recruiting a diverse student base
• "Made In New York" Production Assistant Training Program
minority education
• Outreach to school, college students, to make them aware of career options they may not have
and awareness

All rights reserved.


considered, and provide guidance/role models for how to make it happen
• Franklin Leonard "black list", whereby scripts are submitted/selected from a repository – a
Mentors and "democratic" process, with equal access irrespective of industry contacts, race, gender
network

onsulting Group, Inc. A


• Programs
P like
lik Sundance
S d women initiative
i iti ti ffellowship,
ll hi offering
ff i mentorship
t hi as partt off award
d
Financial • Funding, e.g., by minority-oriented entities like chicken and egg pictures. Can apply without having
constraints contacts/network. Provides credibility to filmmaker, in addition to financial support
• Critical and financial success of projects led by diverse individuals should ultimately erode this

Copyright © 2015 by The Boston Co


concern. Greater diversity in the next generation of media industry would also reduce the probability
Risk aversion of future leaders perceiving enhanced risk in the first place
• Interviewees additionally suggested that linking diversity to add-on tax credit for productions could
be an effective driver of change
Gaining entry to • Affirmative steps (e.g., DGA's diversity committees) bringing greater diversity to the pipeline
unions

Media and Entertainment in NYC-Final.pptx 40


Agenda
1 The TV and movie industry
• Economic impact in NYC
• Television:
– National trends
– Productions in NYC
– NYC tourism
• Movies:
– National trends
– Productions in NYC

All rights reserved.


– NYC indie scene and documentaries
• NYC talent

onsulting Group, Inc. A


2 Other Media and Entertainment in NYC
• Theatre, Publishing, Advertising/PR agencies

Copyright © 2015 by The Boston Co


3 New media in NYC: Digital media and entertainment companies and funding
4 Total economic impact of Media and Entertainment in NYC
• Diversity in the US media industry
5 Positioning NYC for the future
Media and Entertainment in NYC-Final.pptx 41
5
Multiple advantages of NYC for the Media and
Entertainment industry...
Longstanding center of gravity for multiple sub-sectors
• Strong communities in publishing, theatre, movies/TV, journalism,
advertising, etc., hard to replicate elsewhere
• Broad range of sustainable career opportunities in each field,
enabling deep base of strong talent to accumulate

Revenue generation heartland for Silicon Valley tech, and stronghold


for "New News" startups
• Home to sales, marketing teams of Facebook, Twitter, Google, as
well as growing Engineering groups "There are so many industries on top of each other
• HQ for many of the most popular sources of content for millennials: – social circles span actors lawyers, bankers, ad
HuffPo, Gawker, Buzzfeed, VICE, Tumblr executives you name it.
executives, it It makes NY a natural
place for storytelling"

All rights reserved.


Highly attractive place to live, especially for young professionals and
creatives
• Acting talent, ATL and BTL all happy to live in NYC, or visit long-
term for a production e.g.,
e g TV series

onsulting Group, Inc. A


– NYC one of only three cities (plus LA, London) where you can
create a movie/show without bringing anyone in
• Eclectic 'scene' with ability to cross-pollinate e.g., between
movies/TV, new media, Broadway

Copyright © 2015 by The Boston Co


Great support from city and state for filmed entertainment
• MOME help to facilitate the creative vision of Film/TV projects
– Permits, advice on neighborhoods, communication of safety
regulations other guidance on filming in the city
regulations,
• Tax credit instrumental in ensuring productions come to NYC for full
production, rather than just exterior shots

Media and Entertainment in NYC-Final.pptx 42


5
...but a number of perceived challenges to work
around or mitigate
Rising cost of living and doing business in New York City, especially
as the US economy recovers "NYC real estate is an issue – hard to find places for
• Need for affordable real estate options for businesses and people to live at reasonable rates"
individuals, especially in creative industries, startups "Post needs significant amounts of specialized space, in
specific locations (western SoHo), but we're competing
– e.g., difficult to secure space in traditional locations for post with all the other industries in NYC
production (SoHo), or casting directors (Midtown)

Complexity of filming on location in a global metropolis


• The city is thriving, but this brings more congestion, makes it
harder to find parking, space to film
• Increasing number of stakeholders controlling access to locations
(conservancies, associations, alliances, etc.) – increases the

All rights reserved.


importance of MOME's role as 'one stop shop'
• Dense population and traffic in NYC creates complexity for filming
action sequences – movies typically film key scenes upstate, or
move elsewhere

onsulting Group, Inc. A


Traditional business models for publishing and
broadcast/cable being challenged
• Shift to digital/OTT networks well underway; revenues not yet
keeping pace

Copyright © 2015 by The Boston Co


• Responding to cost pressures by shedding jobs or moving non-
core functions to cheaper locations
"There is a perception that NYC lacks critical
Perception of being below 'critical mass' in select roles mass of episodic TV writers, or they need to be co-
located with
ith creati
creative
eeexecutives
ec ti es – but
b t it is diffic
difficultlt for
• Writing jobs slow to move from LA; tax credit helping establish a writers to oversee from afar; there's great value
bigger talent pool in post having them based in NYC, on set"

Media and Entertainment in NYC-Final.pptx 43


5

Subsector-specific trends hold varying implications for NYC:


Summary view
Overall
Subsectors outlook Sector trends NYC trends
• Overall growth due to strong • Benefiting from growth in TV,
Filmed increase in TV production providing stable employment
entertainment

• R
Revenues growing,
i audience
di • C
Continuing
ti i tto b
benefit
fit ffrom
Theater expanding, thanks to strong industry and the tourism
new/varied content it draws

• IIndustry
d t evolving
l i with
ith • Shift iin NYC
NYC-based
b d corporate
t
Broadcast

All rights reserved.


increase in networks and organizations: Increase in digital
and cable
distribution platforms talent, reduction in support
networks
functions

onsulting Group, Inc. A


• Industry continues shift to • NYC expected to remain the
Publishing digital home of the industry

• Overall growth due to • Consolidation of industry

Copyright © 2015 by The Boston Co


Advertising increased spending on digital benefits major agencies,
ads headquartered in NYC
• Industry growing strongly, with • NYC tech scene capturing
Digital i
increasedd access tto capital
it l i
increasing
i share
h off capital,
it l and
d
media/tech talent base growing

Media and Entertainment in NYC-Final.pptx 44


5

Subsector-specific trends hold varying implications for NYC (I)


Detailed view
Overall
Subsectors outlook Sector trends NYC trends
 Rapid growth in spending on  Boom in scripted television in NYC
high quality TV productions  Crews able to work back-to-back
 Diversification in the number of  Growth in post production work in
TV networks commissioning NYC due to tax credit and
content increased VFX in TV
 Increase in post production –  Strong support from the city
Filmed visual effects used in almost all – Variability in major movies, due to
entertainment movies there being fewer but larger
 TV series increasingly
g y 8-12 vs. productions,, and constraints to
p
traditional 22 episodes studio space/stunts

All rights reserved.


 Fewer but larger major studio – Strong need for improved internet
movies (shift to budgets >100m) bandwidth, affordable real estate
– Reduction in mid-size movies for post production

onsulting Group, Inc. A


($50-$100M
$ $ budget)
 Content continues to be "king"  Increased content production in
Broad-  Proliferation of distribution NYC
casting
g platforms  NYC based networks evolving to

Copyright © 2015 by The Boston Co


and cable – OTT/New media business reflect new market realities
networks models still evolving  Increasing shift toward hiring digital
• Headquarters – OTT networks based on West talent
and news only Coast – Relocation of support functions out
off NY

 Positive trend
 Emerging opportunity Challenge to NYC

Media and Entertainment in NYC-Final.pptx 45


5

Subsector-specific trends hold varying implications for NYC (II)


Detailed view
Overall
Subsectors outlook Sector trends NYC trends
 Expanding audience, rising  Broadway remains premiere
prices increasing gross receipts theatre center in US
 Content, talent overlap with  City benefits from Broadway
filmed entertainment helping to tourism
Theatre
attract new demographics  Increasing use of limited runs lets
 Increasing use of digital/special film, TV stars do theatre
effects in big-budget shows – Challenged by availability of digital
talent, esp. in marketing
 Digital publishing driving sales  NYC will remain the US

All rights reserved.


growth headquarters for publishing
 Print titles remain the most industry
Publishing
trusted content, even online  Digital publishing start-ups also
 Growth to occur via digital concentrated in NYC

onsulting Group, Inc. A


acquisition  Incubators e.g., DUMBO, Techstars
– Print subs reducing to smaller fueling future growth
core  Traditional talent transition to digital

Copyright © 2015 by The Boston Co


 Positive trend
 Emerging opportunity Challenge to NYC

Media and Entertainment in NYC-Final.pptx 46


5

Subsector-specific trends hold varying implications for NYC (III)


Detailed view
Overall
Subsectors outlook Sector trends NYC trends
 Strong growth in digital  Strong employment growth in digital
– TV, print spending flat or slightly  Creative teams evolving their
declining offering e.g., to include Vine videos
 Clients increasingly seeking as well as 30-spot TV commercials
holistic offering
offering, spanning  Major NYC agencies benefitting
traditional and digital from clients' preference for single
Advertising
 Major agencies actively holistic partner, vs. multiple
expanding digital offering, both specialists
via acquisition
q and internal  Specialist
p startups
p in NYC ((e.g.,
g,
expansion programmatic buying) benefit from

All rights reserved.


NYC ecosystem, and have strong
exit opportunities via acquisition
 Decreased capital requirements  Major presence of big tech,
tech

onsulting Group, Inc. A


 Easier technology access attracting increasing numbers of
 Strong funding and exit engineering talent to NYC
Digital
opportunities (VC investment,  Media start-ups booming
media and
IPOs, acquisitions)  Growing talent base; continued need

Copyright © 2015 by The Boston Co


for engineers as startups scale up
entertainment  Increasing importance of close links
with top educational institutions e.g.,
Carnegie Mellon, to attract talent to
NYC

 Positive trend
 Emerging opportunity Challenge to NYC

Media and Entertainment in NYC-Final.pptx 47


5
Key suggestions for attracting and assisting filmed
entertainment productions in NYC

Improving ease of filming in NYC Enhancing community relations


Boost MOME resources for permits and IIncrease community it engagementt tot keep
k a
community relations 'finger on the pulse' in the city and better
address complaints
Maintain and expand strong relationships
with key
y city
y organizations,
g , even as the Explore
p ways
y to support
pp local businesses
number of stakeholders increases • e.g., encourage crews to eat at local
• e.g., NYPD, Buildings, Parks, Education, establishments
FDNY
Attracting more productions to NYC
Explore ideas to alleviate constraints
• e.g., on-location parking, parking lots, shuttles Monitor growth in stage capacity

All rights reserved.


• Ensure capacity meets rising production
needs, for film and TV
Helping to reduce production costs Assist in post facilities gaining access to

onsulting Group, Inc. A


real estate, high speed internet
Work with state to maintain stability of
tax credit for productions/post Provide real estate/housing opportunities for talent
• Consider other incentives to encourage
Continue to ensure NYC talent grows to meet

Copyright © 2015 by The Boston Co


business
demand, and reflects diversity of the city
Work with studios to negotiate industry rates for
Showcase NYC facilities to network and studio
hotels
executives

Ongoing dialog with industry stakeholders important to


gather ideas and feedback
Media and Entertainment in NYC-Final.pptx 48
Thank you

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