Phil Fiori has launched his picture car company at a time when the entertainment industry is grappling with challenges both in front of and behind the camera. Shrinking budgets, tightening filming schedules and competition from other states offering tax breaks all make for a tougher environment for firms such as Fiori’s that supply vehicles to production companies. But Fiori has a working formula by thinking small – finding work with commercials rather than big-budget studio films. For now, it’s just him and an office assistant at Next! Pictures Corp., his La Crescenta business. The company leases Fiori’s six cars as well as those owned by dealers and collectors that want to earn some extra money. Crews that transport the vehicles and take care of any on-set issues are freelancers, hired by Fiori as needed. He declined to disclose the company’s revenue. “I feel positive about the business growing and will bring employees on board,” he said. Next! is a small entrant into a field crowded with larger vehicle suppliers, many based in the San Fernando Valley. They include Fiori’s former employer Picture Car Warehouse in Northridge, Cinema Vehicle Services in North Hollywood, GhostLight Industries in San Fernando and Studio Picture Vehicles in Sun Valley. Among the companies caught in the market shift toward smaller productions is Picture Car Warehouse, which has been in business since 2002. It has credits for big-budget features and TV series such as “Mad Men,” and had revenue of $4 million last year. But last month, it filed for Chapter 11 bankruptcy protection facing $2.2 million in debt. President Ted Moser said the filing came as a result of disagreements with a lender who attempted a hostile takeover. “The court will have to sort it out,” Moser said. Fiori worked for six years at Picture Car Warehouse, where he oversaw supplying vehicles for commercials and building relations among auto collectors. Having been self-employed for much of his career, Fiori joked that Picture Car Warehouse was the first real job that he held. In May, he felt that it was time to move on and so he resurrected Next!, a business that he had actually founded 18 years ago but had been dormant. “When it came time to move, it was a name everyone was familiar with,” Fiori said. “It’s appropriate as I’m on my next step.” He has his own collection of six classic vehicles, including a 1957 Chevrolet Apache, a 1963 Corvette coupe and a 1986 Porsche 928. He arranges to use other vehicles as needed from dealers and private collectors. Fiori primarily works on commercial shoots, with TV and feature films not holding much interest for him. He has seen the prep time allowed to get vehicles ready for even complicated shoots evaporate under growing budget restrictions. He was also turned off by a belief held by several studios that vehicles should be on set immediately. Production crews would look at a vehicle car website, see the one they wanted and believed it could be obtained right away, Fiori said. “Just because it’s on the Internet may not mean its available right then,” he added. Inventory issues Picture Car Warehouse began with 25 cars from Moser’s personal collection. The business started in downtown Los Angeles but moved to the Valley in 2011 when Moser moved into a site formerly occupied by a Cadillac dealership. But as the picture car industry has shrunk, large inventories that require land and capital have become a drag. According to documents filed with the bankruptcy court, Picture Car Warehouse has $2.3 million worth of vehicles that range from vintage 1940s and 1950s models; Mustangs, ambulances, motorcycles, school buses, station wagons and two ice-cream trucks. A key dispute between Moser and the lender is over the titles to the 800 vehicles that Picture Car Warehouse owns. Moser would like to sell some of that stock and get it down to 300 or 350 vehicles. “I have too much inventory and I have to move at the end of January,” he said. In March, Harridge Development Group bought the 3.3-acre site at 8350-8454 Reseda Blvd. that Moser leases. Harridge plans to build a mixed-use project. Also, as of Oct. 20, Picture Car Warehouse was owed more than $200,000 from various vendors and production companies. Among those who hadn’t yet paid is actor Ben Affleck, with an outstanding invoice of $37,500, according to the bankruptcy filing. Moser said he has not chosen a new location for the company but at least one Valley site has been scouted by his staff. The case was scheduled for a hearing in U.S. Bankruptcy Court in Woodland Hills on Nov. 12. After 2011, Moser said that his firm saw a loss in vehicle rentals of about 25 percent to 30 percent, but business has started to rebound as more film and television productions remain in California with the help of the state’s $330 million film production tax incentive program. Rods for reels It’s not just Moser who is reporting an uptick in business. Ken Fritz, founder of Studio Picture Vehicles in Sun Valley, said that activity for feature films is about 10 percent of his business, up from 2 percent just a few years ago. However, 90 percent still comes from commercials, music videos and episodic television. “It is a lot easier from the transportation end of it to move around town (than supply out of state productions),” Fritz said. Don Violett, a transportation coordinator who has worked on television productions such as ABC sitcom “The Goldbergs,” said that it is not just incentives bringing the work back to Los Angeles. Also contributing are Netflix Inc., Amazon.com Inc. and other streaming services that are producing their own original programming. “There is more stuff being made than ever before as there are more outlets,” Violett said. One entertainment industry insider who asked not to be named said there are opportunities galore for picture car suppliers if they are willing to grind it out working on many small projects. That’s in contrast to the old-school approach of relying on a few big-budget movies and network shows. “That’s no longer a viable business model for the movie car game,” the source said. Moser estimates that his local rentals have gone up about 15 percent in the past year. Out-of-state work, however, is not uncommon. He spent February through August in New Orleans on a feature film. But he admits the industry cannot support a car lot full of idle vehicles waiting for a production to use them. “There is not enough work to support a facility like us,” he said. “My competition has not done very well, either.”