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September 22, 2020
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Production Pause Ripples Across L.A.'s Media and Entertainment Space

4/24/20

This report was provided to us by CBRE

•Social distancing regulations have slowed Los Angeles’s media juggernaut as movie theaters close and filming stops.

•The film industry occupies a considerable amount of regional commercial real estate. Media and entertainment firms take up over 18.0 million sq. ft. of office (6.5% of total office inventory) and 5.5 million sq. ft. of production space.

•The media industry shed 6,200 jobs from February to March as stay-at-home guidelines put a halt to movie and television filming.

•At-home viewership is creating substantial upside for streaming platforms, which occupy a large (3.9 msf) and growing share of the media and entertainment footprint.


Film and television studios across Los Angeles County have been forced to say “cut” to productions currently underway due to ongoing stay-at-home restrictions brought on by the COVID-19 pandemic. Furthermore, the studios’ primary distribution channel – movie theaters – is temporarily shuttered, imperiling the sector’s 2020 revenues (in 2019, domestic box office revenue totaled $11.4 bil). The century old film industry represents a significant amount of real estate in the Greater Los Angeles (GLA) region: major studios occupy 18.0 msf of office space (6.5% of total office inventory) and 5.5 msf of production / sound stage space (more than three times as large as the second biggest sound stage market).

While production has halted, studios are exploring ways to resume some film productions – albeit with small groups of people at a time. The temporary pause in production is also likely to have reverberations once social distancing restrictions are lifted. According to data from FilmLA, for the past four years, studio space occupancy has been above 90%, and the months-long gap in new production is likely to bolster demand for the region’s sound stages.

The size of the entertainment workforce has increased 10.4% over the last ten years, totaling more than 213,000 people in LA County as of March 2020. The halt in production mid-last month pushed overall entertainment employment down 6,400 jobs (-3.0%) month-over-month. The categories hardest hit were Performing Arts and Spectator Sports (-4,300 jobs) which includes independent artists, writers, performing artists, and agents. The decline is substantially less than typical seasonal changes. Larger employment declines are likely to follow in April as filming remains on pause.

Even though the cameras have stopped rolling, social distancing regulations have created significant upside for the region’s media occupiers in the streaming sector as consumers increasingly turn to cloud-based content for entertainment at home. According to data from Nielsen, the total estimated number of minutes streamed by viewers the first three weeks of March was 85% higher than the same period the year prior—the equivalent of 400 billion minutes worth of content. The 86 streaming firms with a presence in Los Angeles stand to benefit the most in the near-term. These firms have a sizeable 3.9 msf footprint in the region (22% of the total media & entertainment footprint) which has grown by 2.0 msf since Q1 2018. As the current crisis continues to unfold, the ascendance of streaming media is unlikely to abate.


This report was prepared by Eric Willett, Research Director, and Dan Hunker, Research Analyst, with CBRE Pacific Southwest Thought Leadership










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