San Diego Film Studios

It was suggested to our CEO in 2018 that San Diego was overdue for establishing a major film studio in the County given the talent that resides here, and who oftentimes commutes to Hollywood. Given that our CEO had undertaken some thirty industry and corporate strategy reviews his interest was aroused and he undertook the strategic study to undertake this project.

Along the way, he also decided to undertake his Doctorate in business and used the film studio project as a topic for his study to seek a competitive advantage for the studio.

Fundamental metrics 

Early in the analysis fundamental facts was discovered. Historically, sound stage utilization for Hollywood has been budgeted at 70%. But for a number of reasons sound stage utilization was now in excess of 96%. Further, a decade ago the global media industry was expanding at 3% and now is growing at 6%, with strong tailwinds now from the deployment of 5G which enables a full length movie to be downloaded in around ten seconds. 

Why do some studios fail?

Next was an analysis of 'what could possibly go wrong?', by investigating other USA studios.  This framed what the critical mass and location of a studio should look like, and helped us identify that a studio in regional proximity to Hollywood, with the correct zoning,  had a good chance of success.  

How else could we reduce our risks? Identify a good team.

• It helps if you identify an Architect who has has extensive experience in designing studios from which we can use as a template to both visualize the requirements, learn from experience and more accurately establish budgets and construction schedule. Check! 

• Identify a Developer who has experience constructing studios, and who has worked with the Architect previously. Check!
• A studio sales manager with extensive industry experience and industry contacts and who could provide feedback on what the latest demands for studio space are. Check!
• A battle hardened finance executive who can watch the numbers. Check!

Location, location.

Part of our competitive advantage is being the lowest cost provider of modern studio infrastructure in regional proximity to Hollywood. Being in regional proximity to Hollywood is one thing, but also having surrounding supporting infrastructure such as diverse hotel accommodation, travel infrastructure including excellent freeways, municipal and major airports, warehouse space etc. is also a requirement; plus the correct zoning for this major project with land at the right price. 

Many moving parts! Define the details.

We wanted to establish a studio that was compelling to the industry, and consequently wanted to go further in defining our competitive advantage and establish an environment that would enable media creative juices to flow:  

• Organizational structure to ensure that we gave excellent customer service;
• Infill infrastructure such as well designed creative space, rest areas between shoots, productive office space, talent preparation areas, diverse restaurant food options, temporary warehouse space for set construction, etc; 
• Potential sources of finance for independent media productions (Indies); 
• Leveraging the community service infrastructure through establishing vetted and long-term engagement agreements such as transport, security, make-up, beauticians, secretarial support, health services,  engineering services, construction services, accommodation options etc;
• Establish an adequate back-lot area for some external shoots;
• Leverage the support from local government, and much more.

What will this modern studio look like?

Below is one of three structures comprised of offices which share a common wall with three sound stages that can be seen behind.

In phase one of construction we will have a total of nine large sound stages, each 18,000 sq feet. Below is one of the sound stages.

Office space will be tastefully designed to maximize productivity. Bellow is a writers room.

Progress to date.

• We have commenced price negotiation of our target land parcel which is zoned appropriately for our development.
• Our VC anticipates commencement of funding stream within the next few weeks, (after various Covid-related delays from the original Term Sheet date of March 31st, 2020). We plan to then proceed with the final stage of land price negotiation.
• We have selected our Architect who has designed approximately fifteen large studious for various locations around the World. Our sound stage / office design is the same as that for Santa Fe Studios, New Mexico; with phase 1 being three replications of that sound stage/ office studio in a configuration.
• We have selected our Developer who has been responsible for three other studio developments, and has previously worked with the Architect.
• We have identified our initial Board members. One has a strong background in large project finance and will be responsible for obtaining our construction financed; and the other has an extensive background and network of media contacts in Marketing and Sales to USA film studios.
• A non-Board member will be responsible for back-lot operations which may commence prior to full operation of the sound stages (to be confirmed).
• As a contingency to obtaining full construction funding we have established a network of firms and individuals in Asia who will be soliciting an alternate funding arrangement vis the federal government’s EB-5 program. That marketing program commences late August 2020.

Phase 1 of the project which includes the land acquisition plus the construction of phase 1 of the studio which includes nine large sound stages with associated office and warehouse space etc is budgeted at $80 million.

Many more moving parts.

Of course there are many more moving parts. We are pleased to be able to share our vision, and provide you with more detail at a later time.