The Geography of Multimedia Production
The geographic location of suppliers and customers
ties in to the level of subcontracting activity
because firms who work primarily with other local
producers help to support the growth and development
of the Toronto area multimedia industry. Respondents
were asked to identify the geographic location of
suppliers and customers, and Figure 11
reflects the very local focus of both suppliers and
customers to multimedia. Nearly three quarters of
suppliers to survey respondents are located in the
Toronto area, with almost one-fifth of suppliers
being located in the same neighbourhood as
respondents. A greater proportion of suppliers come
from the United States than from elsewhere in the
province or the rest of the country. Customers are
slightly less concentrated in the Toronto area than
suppliers, but nevertheless, firms surveyed indicated
that 60% of customers are located in the Toronto
area. The international focus of the multimedia
industry is reflected more strongly in the customer
base than in the supplier base, with 17% of clients
being located outside of Canada. This finding is
significant in that it may highlight the fact that
industry exports of multimedia products exceed
industry imports (though not necessarily
consumer-imports), thereby increasing the economic
health of the local industry.
FIGURE 11: Geographic Location of Suppliers to
Toronto-Area Multimedia Firms
FIGURE 12: Geographic Location of Customers to
Toronto-Area Multimedia Firms
The overwhelming majority (93%) of firms reported
that they were initially established in the Toronto
area. However, 24% of firms indicated that their firm
has offices outside of the Toronto area.
Another interesting finding from the study,
reflecting the importance of the intra-urban area in
choices of firm location, is that more than half
(52%) of survey respondents indicated that they had
had at least one previous location in the Toronto
area. The vast majority (71%) of firms indicated that
their reason for moving was that their space was too
small. Despite the fact that, as discussed earlier,
average firm size has not increased over the past
year, there are obviously a number of firms that have
increased in size during their lifetimes, though
perhaps investment in equipment has translated into
the need for greater space as well. Another important
trend is indicated in the firm move results, showing
29% of respondents indicating that they moved away
from home offices. Finally, 24% of firms reported
moving to be in a more central location. This
response indicates that intra-urban factors do play a
role in the industry's location patterns. Other
reasons that respondents cited for moving included
the opportunity to purchase space, merging of firms,
non-renewal of leases, and to be closer to suppliers
and clients.
FIGURE 13: Reasons for Firm Moves*
* does not add to 100% as some
respondents indicated more than one reason.
Profitability and Revenues in Toronto's
Multimedia Industry
The majority of survey respondents (68%) indicated
that their firms were profitable in the previous
year. Just over one-third of firms surveyed earned
more than $50,000 in revenues, while 32% of firms
earned greater than $100,000 in revenues. A final
third of firms reported revenues of greater than
$500,000.
FIGURE 14: Revenues
Most survey respondents did not answer questions
related to profit levels. However, 28 firms reporting
profitability indicated their profits from sales of
multimedia products for 1996. Of these, 71% reported
profits of more than $50,000, 18% reported profits of
greater than $100,000 and 11% reported profits of
$500,000 or more. While neither revenues nor profits
appear to be high, these figures must be tempered
with the fact that most firms are quite small in
size, relatively young, and working in a field which
continues to define its boundaries, including pricing
strategies, as it emerges.
Conclusions
In closing, it should be noted that the
information presented here represents only a preliminary
analysis of the survey results. A number of important
trends have been identified however, including:
characterization of the industry's activities;
employment practices and the relative significance of
employment and skill features of multimedia
employees; the importance of local subcontracting
activities, local suppliers and local customers in
supporting the industry; firm mobility within the
Toronto area; and generally low revenue and profit
levels. The relationships between these variables
have not yet been identified, however, though this
remains a subject of future research activity. In
addition, future research endeavors related to this
study include in-depth interviews with multimedia
firms in Toronto, in addition to comparative
interviews conducted with firms in other large
centres of multimedia activity: San Francisco, Los
Angeles and New York.
One of the underlying questions driving this
research is: does Toronto have an enduring
competitive advantage in multimedia? Preliminary
research shows that Toronto has the largest number of
multimedia firms in Canada, and that the city is a
focal point for these firms. However, further
research is required to determine how Toronto will
fare as the industry matures. This relates to
Toronto's role as a national centre and international
centre for multimedia activity, and also to the role
of multimedia in the local economy.
If you have any questions or comments about this
survey, please contact Shauna Brail at: brail@geog.utoronto.ca
or Department of Geography, University of Toronto,
100 St. George Street, Toronto, Ontario, M5S 3G3.
Acknowledgments: I would like to
thank: Prof. Philip Coppack, Ryerson Polytechnic
University, for his assistance in geocoding Maps 3
and 4; the generous assistance of GCM Services Inc.
for providing base maps and technical support in the
development of Maps 3 and 4; and the support of ITRC, MultiMediator
and SMART
Toronto in promoting the survey. The
financial assistance of SSHRC is also much
appreciated.
