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Commercials 30 2012 Back to Reports & survey Listing

Congratulations to Rattling Stick for regaining the top spot in the Commercials 30 after being knocked off the number one podium last year by Blink. 

It’s been a stand out year for the small but perfectly formed outfit that houses our number one voted director Ringan Ledwidge as well as perrenial favourites like Danny Kleinman and Sara Dunlop. They’ve worked on some of the best spots of the year including The Guardian’s Three Little Pigs and Barnardo’s Life Story picking up a mantelpiece full of awards along the way.

Getting better
But how are the commercials production companies feeling in general? Well let’s just say a lot cheerier than last year. In the 2011 survey the words overwhelmingly used by our respondents to describe their year were ‘tough’ and ‘challenging.’ Commercials producers were feeling the full force of two solid years in recession and there were few chinks of light in the darkness.

So how about now? Well, the sunshine isn’t exactly flooding in but it would be fair to say that the outlook is much, much brighter. Gorgeous reports that “on the whole, boards quality has been refreshingly good.” Hotspur and Argyle reckons the work this year has been “much better. Much steadier. More interesting. Good ideas and nice storytelling opportunities for the directors.” Smuggler reports that “it feels like the market has gained some confidence. There are certainly more jobs with larger budgets than last year. Some clients have started to stick their neck out financially so others are following.” Similarly, Picasso Pictures talk of a year that hasn’t been “as tough as we might have thought considering the recession.”

There’s certainly a sense that although the last twelve months weren’t exactly easy, they weren’t half as bad as expected. And certainly steadier after the rollercoaster that was 2011. Of course, that was helped by the boost that the Jubilee and the Olympics gave to the industry at the beginning of the year as brands rushed to ally themselves to the big national celebrations. “It has been more consistent this year in terms of volume work than in previous years,” says Independent. And that’s borne out by the figures. The average turnover of a commercials production company this year is £10.7m, up from £9.5m the year before, while the average number of jobs a commercials production company did was 76, up from 69 the previous year.

Works hard for the money
Busy is, of course, good, but it’s not the whole picture. Most respondents report that although they’ve more work coming through the door, budgets are tight and expectations are high. Production companies are expected to deliver a lot for not very much and still try to make a profit at the end of it. The average budget for a 30-second spot is down this year to £156k from £171k last time and 45% of respondents said they felt budgets had fallen and 45% said they had stayed the same. “Budget bottom lines are starting to pick up, but we’re being asked to deliver the world on those budgets,” says Biscuit Filmworks. “So, spend is higher, but budgets are as challenged as always.” And that trend is perhaps getting to breaking point. “Budgets are continually squeezed often to unrealistic levels,” says Epoch. And producers are having to be very inventive in their production management to make the sums add up. “We’ve had to pull rabbits out of hats at times to deliver the quality of work expected for ostensibly half of the funding,” says Not to Scale. “The squeeze in budgets is ever the challenge faced by our producers but there has been a really strong flow of work and we are excited about the next 12 months,” is the summing up from Pulse Films.

Imperfect timing
Alongside tightening budgets, there are other problems too. Lead times seem to be getting ever shorter making the production companies’ job harder and harder. And a competitive marketplace filled with too many companies fighting for their survival means undercutting is increasingly prevalent leading to “a cutthroat industry where companies are undercutting each other to keep their people employed. Unsustainable in the medium and long term,” is Aardman’s take.

The primacy of cost over creativity is a concern too. “Battling the challenges of procurement and the factory requirement in a creatively driven industry,” is picked out as an issue by Bare Films. The cost of pitching is an almost universal complaint this time. Putting time and money into pitches that you might not win has always been an annoying, but unavoidable, part of being a production company. But the difference now is that the amount of development work expected from a production company for a pitch has reached a stage where producers are almost into pre-production when they’re still competing for the work. “Increasingly the whole pitch process is becoming more extensive and involved,” says Rattling Stick. “‘Treatment inflation’ often sees the director taking the pitch into pre-production stages before a job is awarded which is obviously a considerable financial commitment for a production company.” “We often feel that the production is well underway before the bid is won,” echoes Blink. There’s also an increasing number of tenders put out by agencies for ‘phantom jobs’, that see producers spending time and money developing pitches for agencies who are merely speculatively trying to sell their client on a new campaign. As often as not, it comes to naught. “Agencies are guilty of selling ideas the client can’t or won’t pay for,” says Rogue. “This is a worrying trend which is not only costing us valuable time but also large sums of money too,” says 2AM. And the worry is, that it’s ultimately unsustainable.

New order
With this in mind, it’s worth mentioning another stat from the survey. Last year, on average our respondents said that 6.8% of their work had been contracted directly from a client rather than through an agency. This year that figure’s risen to 9.3%. Many more production companies are now doing at least a small proportion of their work directly for clients when in previous years, many high end producers did no work in this way.

And that’s perhaps symptomatic of a general trend among production companies who are making moves to diversify their client base and the kinds of work they take on. The old days of concentrating solely on TVCs through agencies are on their way out. All production companies are at least thinking about using their talents and their talent to do much more than that. “The distinction between TV commercials and other formats disappeared for us long ago. We produce content, full stop,” says Great Guns. Along with promos and shorts, commercials production companies have made big moves into films for the fashion industry, longer form content, creating the stills for the companion print campaign and of course all manner of interactive activities for brands. Film and advertising spans all platforms and outlets now and producers are following the money. “We are beginning to see a lot of movement in events, online and experiential concepts,” says Mad Cow Films. “We are working with clients on longer-format branded content briefs, such as comedy shorts and sponsored webisodes for the internet and TV,” echoes Mustard. Not to Scale lists “idents, web based drama, virals (which may or may not go viral), moving escalator panels and 360 camera content for interactive sites.” Nexus’s Interactive Arts produces a host of digital and arts projects for museums as does Blink’s BlinkArt. “Rather than the production process becoming more fragmented as media becomes increasingly so, agencies are looking to production companies to be able to tackle their ‘360’ briefs in one place ensuring greater consistency and a smoother running of the job,” says Rattling Stick. “This also guarantees the director’s involvement in overseeing the various elements of the job thereby retaining a more singular tone of voice.”

So while the traditional ways of working are tough and getting tougher, the possibilities for entrepreneurial companies are opening up. As Love puts it: “As someone said the other day, ‘we are only at the end of the beginning,’ so the opportunities are infinite.”

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