With inflation hitting the U.S. economy at large, Hollywood is feeling the impact of it on its film and television production. The rising demand and sluggish supply of building materials is hampering the entertainment industry’s ability to build movie and TV sets within budget.
“In the last three months, the cost of materials have shot through the roof,” says Doug Jeffery, founder of 41 Sets, a boutique shop that has constructed sets for several commercials as well as Sony and CBS projects. Jeffery notes that a sheet of plywood was $20 or $30 in recent years but is now roughly three times as much. And it’s not just lumber: Everything from steel to glass to paint has jumped in price in the past few months.
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Rising prices are forcing producers and executives to change the way they do things. “Supply chain shortages caused us to alter the way we build our stages,” says Frank Patterson, president and CEO of Trilith Studios in Atlanta, home of Disney+’s WandaVision and The Falcon and the Winter Soldier. Whereas workers would normally build the exteriors first and then build out the interiors, the construction team at the studio lot has had to do the opposite because of a delay in shipments of exterior materials.
While most production executives say they’re mainly facing delays and have not yet reached the point where they’re unable to get their hands on materials, many acknowledge that the current estimates they’re receiving for key supplies are about 10 percent higher compared with even just a few months ago. “We’re having to pay the premiums,” says one major studio’s top production exec.
Michael Petok, an executive producer on Black-ish, Grown-ish and Mixed-ish, suggests that the percentage rise could even be higher, depending on the project. “On the shows that I do, it’s gone from maybe $25,000 in total materials — $10,000 of that being lumber — to $45,000 or so,” he says. Petok especially has felt the impact on a pilot he’s working on. “It really hit me because we’re building several sets from scratch, and the cost for materials are about fourfold,” he explains.
Sources say that most productions aren’t simply defaulting to building fewer sets in an effort to save money, though they may look to do so in the near future.
For now, production teams have been looking at other ways of offsetting the inflated costs. One approach involves using less expensive versions of materials that aren’t necessarily as high in quality but offer a similar enough look. When it comes to lumber, that might mean going with some type of veneer or thin plywood instead of using luan, a more expensive option for set-building.
Another way to slash bloated budgets is to repurpose previously used sets that still are in good condition. “We’ve been recycling old sets and making modifications to try to get the job done,” says 41 Sets COO Rafael Loza. “We’re trying to do what’s best for the client and the design based on the budget.”
Meanwhile, a handful of productions are opting for practical locations so that they don’t have to construct sets. “It’s certainly easier to shoot on a stage and build a set that you can control and light from a stage, but we can go to real places and shoot there in almost 90 percent of the cases,” notes a production exec. However, some, including Petok, argue that it’s been harder to do so during the pandemic. “Normally I would’ve gone on location,” Petok says, “but because of COVID, I’m forced into buildings and therefore forced into excess material costs.”
Some studios also are trying to spread out their movies geographically so that they don’t create too much demand for resources in one location. That might look like having concurrent projects going in, say, Los Angeles, Atlanta and Vancouver instead of all of them in one of those cities, where they’d further strain demand in the region. And when studios do have to spend more, they’re doing their best to look for ways to recoup those costs elsewhere in the budget.
“I know producers are having conversations with the director and production designer to say, ‘Where can we trim, whether it be 10 feet here or something we can do on this set to find back this money?’” says an on-set source.
In an effort to get ahead of any actual shortages, some studio execs are having conversations about sourcing large batches of materials now — while they still can — and then storing them on their lot, where other films and television productions could come and grab the supplies as needed. Insiders say they’re not sure whether they’ll be able to pull this off, however, with materials in such high demand. After all, several industries rely on such building materials — most notably the housing industry — with a much bigger need for them.
To be sure, the demand for the resources in Hollywood isn’t likely to slow down anytime soon. While a lot of projects have gotten up and running amid the pandemic, studio sources say there are still several big-budget movies on the runway waiting to take off. Those insiders expect production to hit higher levels in the later summer months, which is why they’re bracing for an even more competitive battle for materials. “There could certainly be a concern in the back half of the year,” says one production source.
The increased costs come on top of already ballooning production budgets, as the pandemic safety protocols now employed on all sets are far from cheap. “With all of the additional COVID costs we have in production nowadays, it’s just a cost that wasn’t anticipated,” says Petok.
The expense of making shows and films already had grown anywhere from 15 percent to 30 percent as a result of new line items like PPE, frequent testing and additional COVID personnel, say insiders. Not only that, but other production-related expenses like hotel rates also have shot up as cities get busier again. One source says that what used to be $140 a night on a crew deal for a hotel is now close to $200.
Still, those hardest hit by the skyrocketing prices are not just the major studios and independent producers but the small businesses that often build their sets. To be set back by the inflated costs on the heels of an industrywide work stoppage hasn’t exactly been easy for them. “As business owners, we’re trying to do our best to ride the wave and keep our doors open,” says Loza. “Even if we don’t make a profit, we’re trying to be positive and make sure our guys stay employed.”
This story appeared in the May 26 issue of The Hollywood Reporter magazine. Click here to subscribe.
