1、ECONOMIC IMPACT OF VIRGIN RIVER SEASON FIVE IN BRITISH COLUMBIAA REPORT FOR THE MOTION PICTURE ASSOCIATION CANADASEPTEMBER 2024Photo Credit:Netflix.All Rights Reserved.1Economic impact of Virgin River Season Five in British ColumbiaTABLE OF CONTENTSExecutive summary 31.Introduction 52.Production spe

2、nding 72.1Business spending 83.Economic impacts 113.1Channels of impact 113.2Total impact 123.3Direct impact 143.4Indirect impact 143.5Induced impact 154.Wider impacts 17Appendix:Methodology 19Cover Photo Credit:Netflix.All Rights Reserved.Photo Credit:Netflix.All Rights Reserved.3Economic impact of

3、 Virgin River Season Five in British ColumbiaVirgin River is a TV series based on the book series of the same name created by Robyn Carr.The show chronicles the journey of Melinda Monroe as she moves from Los Angeles to a remote town in Northern California.As of 2024,the TV series has aired five sea

4、sons and filmed a sixth one.The filming and production of the fifth season of the show generated considerable economic activity across British Columbia(BC)in Canada.Primarily filmed in Vancouver and the surrounding area,the fifth season directly engaged and fueled economic activity for more than 500

5、 businesses in the province.The shows production also supported economic activity through local spending of BC residents employed by the production and its supply chain.This study,commissioned by the Motion Picture Association(MPA)Canada,focuses on the production of the fifth season of the show and

6、analyzes its total economic impact in British Columbia in 2022.1 The study also considers the wider impact of the show by boosting film-induced tourism and promoting the local film industry.Similar production budgets and spending patterns across British Columbia are likely to produce similar economi

7、c impact results as those presented in this study.Virgin Rivers Season Five production supported C$44.4 million in total spending across the province in 2022.The production spent C$29.3 million(66%)on compensation paid to local production cast and crew.The remaining C$15.1 million(34%)was spent with

8、 local suppliers of goods and services.Oxford Economics estimates that expenditure by the production of Virgin River stimulated C$65.0 million in contribution to the provinces GDP in 2022.We find that for every C$1 million that the productions own activities contributed to the economy,its expenditur

9、e supported an additional C$1.2 million along its supply chain and through the payment of wages.We find that the shows production expenditure stimulated a total of 620 full-time equivalent(FTE)jobs across British Columbia in 2022.For every 100 FTE jobs the production directly employed,its expenditur

10、e stimulated another 59 FTE jobs across the province.Finally,the production benefitted from nearly C$7.7 million in provincial tax incentives according to Netflix.These incentives provided by the Government of British Columbia are estimated to have produced C$8.5 in GDP for every dollar of provincia

11、l tax incentive received by the production.1 The analysis excludes the economic impact generated outside of British Columbia,including other Canadian provinces and countries.Throughout this report,economic impacts of the show refer to the production of Season Five alone.EXECUTIVE SUMMARY620fteJobs s

12、upported across British Columbia as a result of the fifth season of Virgin RiverC$65mTotal contribution to British Columbias GDP supported by the fifth season of Virgin River66%spent on employeecompensation34%spent on local goods&servicesDIRECT IMPACT OF PRODUCTIONC$44.4mspent across British Columbi

13、aMore than500localbusinessessupported390localFTE jobs createdTOTAL IMPACT OF PRODUCTIONC$65.0mtotal contribution to British Columbias GDP620local FTE jobsstimulated by production inBritish ColumbiaTHE ECONOMIC IMPACT OF VIRGIN RIVER SEASON FIVE IN BRITISH COLUMBIAPhoto Credit:Netflix.All Rights Rese

14、rved.5Economic impact of Virgin River Season Five in British Columbia1.INTRODUCTIONVirgin River is a romantic drama TV series based on Robyn Carrs book series with the same name.The shows protagonist,Melinda Monroe,moves from Los Angeles to a remote town in Northern California to work as a midwife a

15、nd nurse practitioner.The TV series chronicles her fresh start in a new town.The series has been filmed across British Columbia,Canada.The first season premiered in December 2019 on Netflix,with four seasons of subsequent airings.Season Five filming occurred from July through November 2022,airing on

16、 Netflix from September through November 2023.Netflix went into production on the sixth season of the show in the spring of 2024.The Motion Picture AssociationCanada commissioned Oxford Economics to conduct an independent economic impact assessment of the production of the fifth season of the show o

17、n British Columbias economy.For the study,Oxford Economics used spending data provided by Netflix to estimate the economic impact of the production.Similar production budgets and spending patterns across British Columbia are likely to produce similar economic impact results as those presented in thi

18、s study.Photo Credit:Netflix.All Rights Reserved.7Economic impact of Virgin River Season Five in British ColumbiaLocal TV series productions create jobs,revenue,and related infrastructure development.Physical production provides an immediate boost to the local economy,fostering job creation and econ

19、omic activity in other industries across the production supply chain.In 2022,Virgin Rivers production spent approximately C$44.4 million across British Columbia.Compensation for local production cast and crew made up 66%of the total expenditure,at C$29.3 million(see Fig.1).Spending with local vendor

20、s of goods and services made up the remaining 34%,or C$15.1 million.Fig.1:Production spending of Virgin River in British Columbia,by type2.PRODUCTION SPENDINGC$44.4mTotal production expenditure in British ColumbiaSpending with local vendors on goods and services was C$15.1 million while spending on

21、production cast and crew was C$29.3 million.Source:Netflix,Oxford EconomicsC$millionTotal spendingC$44.4 million,100%BusinessesC$15.1 million,34%PayrollC$29.3 million,66%500305201025154045358Economic impact of Virgin River Season Five in British ColumbiaFig.2:Map of spending with locally based busin

22、esses by census division22 The location of extras and daily labour was not provided;therefore,this expenditure is not included in the map.2.1BUSINESS SPENDINGProduction spending engaged over 500 businesses across the province.The production spent the majority of its procurement budget in the south o

23、f the province.Greater Vancouver saw the highest concentration of spendingwith C$12.4 million spent with local businesses.Fig.2 below shows the distribution of business spending across the province.TV show productions typically rely on a wide range of goods and services,engaging multiple local busin

24、esses across numerous industries(see Fig.3).The production spent C$4.3 million on stage Fig.3:Spending on goods and services in British Columbia,by itemC$millionSource:Netflix,Oxford EconomicsStage and site rentalsTruck rentalsExtras and daily labourProduction office spaceProduction rentalsVehicle r

25、entalsOther2828+1212+1212+1010+88+77+2323+A+A4.31.81.51.11.81.23.5Spending by census division(C$)No spend11,0001,00110,00010,00150,00050,001500,000500,000+Source:Netflix,Oxford EconomicsSquamish-LillooetFraser ValleyGreater Vancouver9Economic impact of Virgin River Season Five in British ColumbiaBri

26、tish Columbias undeveloped,forested,and mountainous landscape attracts film productions seeking untamed natural settings.The filming of the Netflix series Virgin River took place in five different locations ranging from the city of Vancouver to classic charming Canadian small towns and rural areas t

27、hat provided a more rugged,wilderness backdrop.The regions cinematic appeal provided a captivating setting for the fictional town of Virgin River.According to Martin Henderson,who plays the lead male role of bar owner Jack Sheridan,natural beauty and access to the outdoors are“literally on your door

28、step.”Alexandra Breckenridge,who plays the nurse,agrees,saying:“The light that was streaming through the mountains looked fake,but it was so beautiful.”3Above and beyond the natural beauty of the filming locations,the commercial success of 3 Netflix,Netflix in Your Neighbourhood,About Virgin River.4

29、 The Squamish Reporter,Emotional Virgin River fans keep flocking to Squamish to see Jacks Bar,September 2022.5 Mighty Travels,6 Stunning Filming Locations from Virgin River Season 6 Worth Visiting,June 2024.6 Netflix,About Virgin River.the show has contributed considerably to increased tourism in Br

30、itish Columbia,attracting visitors keen to explore the landscapes and locations featured in the 54 episodes of Virgin River that have already hit the screens.This supports local businesses such as hotels,restaurants,and tour guides.One such example is the Watershed Grill in Brackendale,which serves

31、as the exterior inspiration for the shows central gathering spot.When a location scout visited the restaurant a few years ago,its owners could have never imagined that it would become a draw for thousands of Virgin River fans from all over the world.4 As Brandy Willmot,the part owner of the Watershe

32、d Grill,puts it,“the people who come to see the shooting locations in town are tourists who are spending money in the community and meeting and connecting with other people.”Despite its newfound fame,the bar has managed to maintain its authentic and community-oriented atmosphere.5Virgin River also h

33、ighlights some of British Columbias most prominent tourist destinations.For example,many of the episodes showcase New Westminster,Canadas oldest western city.The show also features a rock-climbing scene in the Smoke Buffs Park,in Squamish,a main destination for many tourists looking for adventure.Ot

34、her locations include Maple Ridge,North Vancouver,Burnaby,and Langley.6In conclusion,Virgin River is helping to showcase British Columbias scenery and unique amenities to a global audience,attracting tourists who may not have otherwise considered visiting the area.This brings tourism spending,econom

35、ic benefits,job creation,cultural exchange,and increased global visibility to the filming destination.THE TOURISM IMPACT OF VIRGIN RIVERand site rentals,or 28%of the local business spend.Some C$1.8 million went towards extras and daily labour.Truck rentals comprised the third largest spending catego

36、ry,and other video recording equipment,while C$1.1 million went towards other vehicle rental companies.with C$1.8 million,followed by C$1.5 million going towards production office space.The production spent C$1.2 million with production rental companies,renting cameras Photo Credit:Netflix.All Right

37、s Reserved.11Economic impact of Virgin River Season Five in British Columbia3.ECONOMIC IMPACTS3.1CHANNELS OF IMPACTThe impact of filming the fifth season of Virgin River on British Columbias economy is calculated using an economic impact assessment.This involves quantifying the productions economic

38、contribution at the province level across three channels of expenditure,where the total impact is the sum of the three channels.Added together,these three efectsdirect,indirect,inducedcomprise the total economic impact of the company or sector.TOTALIMPACTINDUCEDIMPACTEmployees(including of the suppl

39、iers)spend their wages in the wider economy,generating more GDP,jobs and tax revenues.INDIRECTIMPACTIt also spends money with suppliers who employ staf,generate GDP and pay taxes.They use other suppliers in turn.DIRECTIMPACTA company employs staf and generates GDP and tax for the authorities.Source:

40、Oxford Economics12Economic impact of Virgin River Season Five in British Columbia7 While production spending with British Columbia based vendors totals approximately C$15.1 million,these local vendors may spend some part of this with companies outside of the province,resulting in an estimated impact

41、 of C$11.8 million.3.2TOTAL IMPACTCombining all channels of impact,we find that the fifth season of Virgin River supported C$65.0 million of the provinces GDP during the production period.The production itself supported approximately C$29.3 million(direct economic activity),or 45%of the total.The lo

42、cal spending on goods and services supported another C$11.8 million along the supply chain(indirect),or 18%of the total.7 Wage payments from the production and from local vendors to BC residents(induced)stimulated a C$23.8 million contribution to GDP,or 37%of the total(Fig.4).C$65mTotal contribution

43、 to British Columbias GDP supported by Virgin River Season FiveFig.4:GDP and employment contribution supported by Virgin River Season Five in British Columbia by channel of impactSource:Oxford EconomicsTotals may not sum due to rounding.DirectIndirectInducedC$millionContribution to GDP70040103020506

44、065.023.811.829.3EmploymentJobs supported(FTE)70001003002004005006006201309539013Economic impact of Virgin River Season Five in British ColumbiaWe estimate that,for every C$1 million in direct GDP generated by the production of Season Five of Virgin River,its expenditure supported an additional C$1.

45、2 million across British Columbia.8The production of the fifth season of the show also had a significant impact on employment in the province.In 2022,Virgin River supported 620 FTE workers across British Columbia.The TV series production directly employed 390 FTE BC-based workers,or 63%of the total.

46、Local spending on goods and services supported another 95 FTE jobs along the supply chain,or 15%of the total.Spending of wages across the province by local production cast and crews and by employees of the 8 This GDP multiplier effect is calculated by dividing the total impact(C$65.0 million)by the

47、direct impact(C$29.3 million)and subtracting 1.9 This employment multiplier effect is calculated by dividing the total employment impact(620)by the direct employment impact(390)and subtracting 1.While the employment figures presented in this report are rounded,all calculations are based on the actua

48、l figures.10 This is calculated by dividing the total impact(C$65.0 million)by the provincial tax incentives received(C$7.7 million).shows suppliers supported a further 130 FTE jobs,or 22%of the total.We estimate that,for every 100 FTE jobs the production directly employed,a further 59 FTE jobs were

49、 supported across the province through secondary effects.9According to Netflix,the fifth season of Virgin River is estimated to have benefitted from nearly C$7.7 million in provincial tax incentives.These incentives provided by the Government of British Columbia are estimated to have produced C$8.5

50、in GDP for every dollar of provincial tax incentive received by the production.10The remainder of this section describes the three channels of impact in more detail.620fteJobs supported across British Columbia as a result of Virgin River Season Five14Economic impact of Virgin River Season Five in Br

51、itish Columbia3.3DIRECT IMPACTDuring the production period,Virgin River Season Five directly employed an estimated 390 FTE BC-based workers across the province.We estimate that the production of the fifth season of Virgin River made a C$29.3 million direct contribution to the provinces GDP in 2022,w

52、hich came from the payment of employee compensation to locally based staff.1111 The contribution to GDP generated by a company or a project can be calculated as the sum of its surplus(profits)and employee compensation.This approach,known as the income approach,is consistent with the principles of na

53、tional accounting.For the purposes of this study,we take a conservative approach to this calculation and focus on the employee compensation of local workers,excluding the profits associated with the production in our calculation of direct contribution to British Columbias GDP.3.4INDIRECT IMPACTThe p

54、roductions positive contribution to the provinces economy,however,extends past the contribution it makes directly through its own operations.This stems from the purchases of goods and services made to other firms in order to produce the show.This spending stimulates additional economic activity alon

55、g the supply chain and is referred to as the indirect impact.We estimate that the procurement associated with Virgin River Season Five stimulated an C$11.8 million contribution to British Columbias GDP along the domestic supply chain.The real estate and rental and leasing industry received over 54%o

56、f the indirect impact.This industry includes vehicle,site,and production rental companies.Administrative and support services constituted around 15%of the indirect Fig.5:GDP contribution stimulated by the procurement of goods and services from local suppliers,by industrySource:Oxford EconomicsAdmini

57、strative and support servicesPublic administrationProfessional,scientific,and technical servicesRetail tradeOtherReal estate and rental and leasingC$million1.80.50.50.52.3048266.415Economic impact of Virgin River Season Five in British Columbiaimpact,reflecting the amounts spent on accounting and pa

58、yroll services(including extras and daily labour).Public administration,professional services,and retail trade followed,each making up 4%of this impact.The shows expenditure on inputs of goods and services from locally based suppliers stimulated 95 FTE jobs across British Columbia.3.5INDUCED IMPACTP

59、roduction cast and crews employed by the show and production period.Real estate,retail,and finance and insurance comprised many of the businesses benefitting from induced spending.In addition,the production also made considerable contributions to public administration through the induced channel(Fig

60、.6).We estimate the wage financed consumer spending of local production cast and crews and workers within the shows supply chain supported 130 FTE jobs across British Columbia in 2022.workers employed along the supply chain spend a proportion of their wages at retail,leisure,and other outlets across

61、 the province.This stimulates economic activity and employment at these establishments and along their supply chains.This is referred to as the shows induced impact.We estimate the wage-financed spending of local production cast and crews and workers at locally based suppliers stimulated C$23.8 mill

62、ion toward British Columbias GDP during the Fig.6:GDP contribution stimulated by the payment of wages to locally based workers,by industrySource:Oxford EconomicsPublic administrationRetail tradeFinance and insuranceHealth care and social assistanceOtherReal estate and rental and leasingC$million3.02

63、.51.90.86.49.20410268Photo Credit:Netflix.All Rights Reserved.17Economic impact of Virgin River Season Five in British Columbia4.WIDER IMPACTSIn addition to the economic impacts that arise through production spending,television series such as Virgin River can produce impacts that extend beyond the j

64、obs and GDP they support.Because of its mild climate and scenic appeal,British Columbia has long attracted filmmakers.In addition,from the late nineties,film and television production in the province started growing even more rapidly with the introduction of tax incentives.These helped attract both

65、national and international productions and the creation of top-rate studios in and around Vancouver.As described in the case study,localities used as filming locations for Virgin River may start attracting visitors and fans of the show.Film induced 12 See for example,Jeeyeon Hahm&Youcheng Wang(2011)

66、“Film-Induced Tourism as a Vehicle For Destination Marketing:Is it Worth the Efforts?,”Journal of Travel&Tourism Marketing,28:2,165179 or Beeton,Sue.“Understanding film-induced tourism.”Tourism analysis 11,no.3(2006):181188.13 Netflix,Netflix in Your Neighborhood.14 Netflix,About Virgin River.touris

67、m is a well-known phenomenon and it has increasingly been viewed as an important component of destination marketing.12In an effort to leverage this phenomenon,Netflix Canada started its Netflix in Your Neighbourhood initiative,which showcases some of the most iconic filming locations of its shows an

68、d allows fans around the world to virtually explore the Canadian filming locations of their favourite Netflix films and series.13 Some fans may then choose to visit those places in person,bringing jobs and economic activity to the local area.As an additional wider impact,the production of Virgin Riv

69、er invested heavily in local talent,pushing their careers and names internationally.In addition to working with locally based production companies,their cast also includes a large pool of Canadian talent.Nine of the fourteen main cast members hail from Canada.14Through its five seasons,Virgin River

70、has brought long-lasting benefits to BC-based workers and businesses.While we have not quantified the wider impacts of the production of the show in this study,it is worth observing that film and TV productions can also create additional economic,community,and social benefits.These may comprise the

71、creation of job openings for apprentices or students,the development of business ventures,the formation of spin-off firms,and contributions to community and culture.Photo Credit:Netflix.All Rights Reserved.19Economic impact of Virgin River Season Five in British ColumbiaThe impact of the filming of

72、Virgin River Season Five on British Columbias economy is calculated using an economic impact assessment.This involves quantifying the productions economic contribution to the province across three channels of expenditure.The channels of impact are:Direct impact relates to the employment and economic

73、 activity generated at the filming locations across British Columbia.Indirect impact captures the economic activity stimulated by the procurement of inputs of goods and services from the locally based supply chain.Induced impact comprises the wider economic benefits that arise from the payment of wa

74、ges by the television series,and the firms in its local supply chains,to staff who spend a proportion of this income at local retail,leisure,and other outlets.The total impact is the sum of the three channels.This enables us to build a picture of the series overall contribution to the province acros

75、s two key metrics:The gross value-added contribution to British Columbias GDP.15 Employment,measured in terms of FTE jobs.The results are presented on a gross basis,ignoring any displacement of activity from other firms or activities.The results do not consider what the resources currently used by t

76、he shows production,or stimulated by its expenditure,could alternatively produce in their second most productive usage.Additionally,the results also exclude economic activity generated outside British Columbia,employment of non-resident workers,and spending with suppliers located outside the provinc

77、e.Data on the direct impact of Virgin Riverincluding the shows contribution to GDP and headcount jobs createdwere provided directly by Netflix.Direct FTE jobs were estimated using average annual salaries in the motion picture and video industries.Direct GDP contribution in the province is taken to b

78、e equal to local employee compensation.Indirect and induced impacts were calculated using the IMPLAN economic impact software.IMPLAN is an industry-standard tool that collates government economic data from a variety of sources and streamlines economic impact calculations across different geographies

79、.IMPLAN allows for adjustable assumptions of supply-chain connections and leakages from survey input data.IMPLAN is widely used and recognized by government organizations,non-profits,economic development organizations,workforce planners,education institutions,and consultants across the US and Canada

80、.To estimate the indirect impact,we used vendor-level information on the amount spent and type of goods and services purchased from businesses based in British Columbia over the course of the shows production.The induced impact analysis takes the wages paid to workers,as provided by Netflix,and allo

81、cates these in line with the proportions in the regional input-output matrices constructed by IMPLAN.We then used those figures to show how many dollars of GDP the shows production supported in British Columbias economy for every C$1 of direct GDP contribution,and how many FTE jobs were stimulated a

82、cross the province for each 100 FTE workers directly employed by the production.15 Where GDP is the main indicator of economic activity in British Columbia.It is used to measure the rate of growth or decline of the economy,and when it enters a recession.APPENDIX:METHODOLOGY20Economic impact of Virgi

83、n River Season Five in British ColumbiaOxford Economics was founded in 1981 as a commercial venture with Oxford Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost

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88、w comprises over 2,500 international organisations,including leading multinational companies and financial institutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.September 2024All data shown in tables and charts are Oxford Economics own data,exce

89、pt where otherwise stated and cited in footnotes,and are copyright Oxford Economics Ltd.The modelling and results presented here are based on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or up

90、date of those data will affect the assessments and projections shown.Alice Gambarin Fabian Juarez Oxford Economics 5 Hanover Square 8th Floor New York,NY 10004Tel:+1 646-786-1879ABOUT OXFORD ECONOMICSPhoto Credit:Netflix.All Rights Reserved.Global headquartersOxford Economics Ltd Abbey House 121 St

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