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Facilities 50, 2013 Back to Reports & survey Listing

The post sector has shown its durability over the last year, adapting to an ever changing set of demands and eyeing a positive future. Jake Bickerton reveals the 10 key themes to emerge from Televisual’s 2013 facilities 50 survey.

One: Things Looking Up
It makes a refreshing change to be able to say something positive about the fortunes of the UK post sector after years in the doldrums.

With more and varied work around, the majority of post houses taking part in this year’s survey are very upbeat about how their fortunes are panning out so far. Some of this may be bravado, but the underlying message is things are looking up.

“The industry seems to have adjusted to the terrific changes of the past four years and confidence seems to have returned somewhat,” sums up Gary Szabo, md, Smoke & Mirrors. “It feels as if confidence may be growing and the industry is coming out of a rut that has been hanging around since the recession started,” echoes Cara Kotschy, md, Fifty Fifty.

Meanwhile, Chris Sturmer, facilities director, Hackenbacker adds: “Things are definitely picking up, the phone is ringing more. Long may it continue.” And Justine White, co-founder, Finish says, “We’ve been busy, and compared to 2012, it’s been an upturn for us.”

 “It’s been a great year and we’re now expanding the business to satisfy demand,” says John Cryer, creative director, Platform, which is a fairly typical comment made by many. The list of companies expressing similar feelings goes on and on, and there are far too many quotes to list them all here, but suffice to say it’s the first time in a long time the post sector has been so openly upbeat.

Two: But It's Still Tough
However, the glossy reports from shiny happy post houses may be hiding a slightly murkier reality.
A handful of post houses are less optimistic about the current trading conditions and a huge swathe say the only way to make things work is to constantly adapt to the ever changing whims of its client base. A number of post houses fell foul of trading conditions in 2012/13, including Stanley Productions, The Pavement, M8 Media and RAIN, while vfx company Pixomondo also closed its London office.

Hector Macleod, CEO, Glassworks says bluntly, 2013 is “not great – there’s less money and less time to do the work”, while Richard Moss, md of Cardiff-based Gorilla TV (which also owns Soho’s The Joint) says it’s been “challenging, with ever decreasing broadcast budgets demanding new efficiencies.”

Likewise, David Lale, manager at IBF says it’s been “a challenging year,” and Phil Dobree, md, Jellyfish Pictures calls it “difficult”. Thomas Urbye, md, The Look adds: “More and more of our competitors seem to be struggling, and gap financing deals do not seem to be as useful for winning work and sustaining a business as many financial directors thought.”

On top of this, Finish’s White also points to the downturn in fortunes of global vfx companies as an indicator that not everything is coming up roses: “Sadly highlighted at this year’s Oscars, vfx as a craft is struggling to be appreciated in the film world. This seems to be somewhat echoed in London commercials and production as a whole too. Everyone knows they need post production, but clients don’t always seem to be willing to pay for it.”

But instead of reporting universally bad feedback for the year, many facilities say it’s been a mixed bag: “2013 began robustly, with a period of consolidation towards the middle of the year whilst the commissioning process was on-going. From now until the end of the year we are experiencing high demand for all our facilities,” says Tim Bolt, md, Big Bang.

Meanwhile, Reg Wrench, md, Preditors says, “2013 started very slowly for us, in fact it was our worst since we started trading. But the summer has been very busy and it looks like the industry as a whole has picked up considerably.” George Panayiotou, business development manager, Filmsat59 also reports, “The first half of the year has been slow but we were expecting this due to commissioner changes and late green lights. The autumn and into 2014 is looking busy.” Jim Allen, md, Big Buoy is another to say things now “appear to have stabilised”, while Splice TV, Premier, BlueBolt, Prime Focus, Milk, Eon, Envy, LipSync, Rapid Pictures and Timeline TV all report the same upturn in fortunes after a poor start to the year.

Three: Adapt to Survive
The post scene in 2013 is a world away from even five years ago – you have to adapt to survive.

Tape is all but dead, productions are routinely ‘offlined’ in HD, pretty much everything gets a proper grade and working in high resolutions of 4K is fast becoming the norm (at least when it comes to drama and natural history). The bottom line is you continually have to adapt to survive in post production, and the last year has been a prime example of this: “2013 has been a year to adapt, develop and branch out from our traditional business areas,” sums up Ewan Rowden, business manager, Coach House Studios.

“There are always opportunities if you listen to your clients. New revenue streams continue to open in our fast-evolving world,” adds Smoke & Mirrors’ Szabo. Andy Shelley, operations director, Onsight agrees: “We’re finding success is met with not only cutting edge facilities, but also flexibility in order to fit around the requirements of clients. This is especially true with the evolving on set/location demands, data management and multiple platforms.”

The Mill sends out a word of warning to post facilities that fail to catch the wave of new production technologies and workflows: The biggest challenge in post, says md Darren O’Kelly, is “not having your finger on the pulse and understanding the industry challenges. You need to be alert and respond to the market, from finding the right talent through to technology changes that come thick and fast.” Similarly Vittorio Giannini, md of new startup, WPP-owned Gramercy Park Studios says the danger is for “those who are resistant to change. You have to be flexible and agile enough to change with an industry that is changing at speed.”

“It’s been a year that’s made us look at how the post market is changing, look at new opportunities and pursue alternative revenue streams,” agrees Rachael Shaw, md, Nice Biscuits. Paul Austin, head of post production, Dock 10 says simply: “Post houses not willing to adapt will go under, especially those who have consistently adopted a policy of survival through undercutting the competition.”

Four: Boutique Benefits
Many post start-ups this year (Blue Spill, Gramercy Park Studios, Principal vfx, Whitecross, Milk and Thankyoumam) are boutiques without ‘world domination’ on their business plans.

“With high overheads and hungry mouths to feed, the bigger players are feeling the pinch as boutique companies extend their offering with services like grading, motion graphics and production. More often than not we find ourselves pitching against other bijou houses rather than the big three,” says David Smith, CEO, Absolute Post. “We’ve seen a further shift to boutique and talent-centric organisations, away from the bigger names,” agrees Patrick Fischer, md, Creativity Media. As does Platform’s Cryer: “We’re seeing a change with production companies not choosing to post projects at larger facilities but instead using smaller post houses like ourselves. Clients want an increased personal and intimate service that doesn’t feel like a sausage factory.”
Meanwhile, Kim Goody, joint-md, Soho Square Studios believes the failings of large post houses are partly to thank for the apparent increased interest in boutiques: “With question marks over the financial stability of some of the major post houses, we’ve seen an increase in enquiries from those seeking bespoke services rather than all-in post solutions.”

Five: Bad Budgets
As with every other year, the key gripes of post houses are decreasing production budgets, undercutting and a general feeling there’s still too much competition in the post production sector.

Many post houses say reducing budgets are their biggest on-going concern, with the general feeling, as summarised by Grahame Andrew, joint-md, Lola, that clients are “forever pushing towards more for less.” Will Cohen, joint-md, Milk is typical in witnessing some “clients placing more emphasis on price rather than quality and ability, possibly due to both pressure on budgets and a lack of understanding of the sector.”

Joce Capper, md, Rushes adds that she’s concerned about “clients not paying a fair price for vfx, therefore reduced margins and companies going bust”. As a result, Nice Biscuits’ Shaw explains: “Many highly skilled vfx artists have been forced from their positions and, with the availability of new low cost finishing kit, have begun starting up micro facilities to try to maintain the same levels of income.”

Six: The Big Move
There have been a great deal of post expansions of late, and plenty more planned for the coming year.

“We will be expanding into new offices late in 2013 – the new suites will have the ability to work as traditional single operator rooms or multi operator collaborative workspaces,” says Big Buoy’s Allen about his future-thinking new office space.

Splice TV is also talking about a move in 2014, as is Jellyfish. Coach House is planning “an expansion to a second location,” Fifty Fifty is undecided about moving to new premises, Preditors is confident it’s going to move in the coming year, as is Smoke & Mirrors. Platform is adding an “additional building with two further Flame suites and a sound studio.” Envy is mulling further expansion (little surprise there, perhaps) and IMG Media is just about to relocate from Chiswick to a huge new base in Stockley Park. Framestore is “continuing to look at new markets, including expansion overseas,” Directors Cut is looking at the possibilities of opening in Manchester, Evolutions wants to grow its new Bristol base and Gorilla TV is also looking at “geographical expansion.”

However, perhaps the biggest move of all is reserved for The Mill. “The really big news for us this is year is that after 24 years The Mill is on the move, opening a state-of-the-art bespoke new studio in Windmill Street, Fitzrovia. The Mill move will reset all established expectations technically and the experience our clients have when they’re with us,” O’Kelly says boldly.

Seven: Consultancy Services
With technology changes sweeping through all areas of production, post houses are well positioned to offer advice on camera formats, cloud-based working, production workflows, metadata, etc.

Not only is the role of technology consultant another potential revenue stream, it also enables much closer collaboration with clients from the beginning of the production process. “Given the ever constant change and introduction of new codecs, higher resolutions and endless camera selections, we’ve found ourselves as a technical partner much earlier in the production cycle. This allowed us to ensure there’s a much smoother post process and efficiency in the production budgets,” explains Scott Holmgren, md, Clear Cut. “There’s never been a greater need for expertise to navigate through the complexity of data management and tapeless delivery,” adds Max McGonigal, md, Crow TV. It’s now “no longer about who has the most expensive boxes and all about who has the best workflow expertise,” sums up Dock 10’s Austin.

Eight: In-house Post
A long-standing concern of post houses, which perhaps dissipated a little a few years ago but is now back with a vengeance, is the threat posed by production companies’ in-house post departments. There’s been a growth in in-house facilities over recent years, with production houses investing fairly heavily in trying to create post production divisions that mirror the scale and range of services offered by the independent post production sector.

While it’s an expensive undertaking that requires continual investment in kit and people, the short-term savings and undeniable convenience offered by having an in-house post production outfit is a major draw for production companies wanting tighter control over production budgets.

A scan through the list of post houses recommended by broadcast production companies reveals quite an assortment of apparently cost effective in-house facilities are held in high regard by those working at their parent companies. Irresistible Films, Outline Productions, Off the Fence, Princess Productions, Reef, TwoFour Studios and Wag TV all heap generous praise on the quality, convenience and affordability of their in-house post facilities.

“Our post production department has recently expanded with 11 HD Avid suites and this continues to bring revenues into the company. We have excellent post production staff and continue to manage overheads so we’re a more efficient and cost effective business,” says Reef. Meanwhile, Cardiff-based Rondo says: “We’ve invested substantial funds in a new post production, office and studio facility and are now better placed to recoup on that investment in the form of recoveries from productions.”

Naturally, many in the independent broadcast post sector report being anxious about the re-emergence of in-house post. And equally those servicing commercials clients are similarly worried about the impact on business of agency and commercials producers’ in-house post departments. The lack of love isn’t helped by these services also being widely criticised for undercutting independent post houses.

Nine: Tax Bonanza
Recently introduced tax incentives providing dramas with a sizable tax rebate if produced in the UK have given post houses as well as production outfits reason to be cheerful.

“We’ve started seeing some impact from the UK tax incentive, which is stimulating an increase in international co-productions,” says Johnny Whitehead, director of operations, Deluxe 142.

“The current market is extremely buoyant, with an exceptional level of high-quality drama posting in London, thanks in part to the new TV tax credit,” adds Goldcrest’s Quested. Tom Cotton, vp, creative services, Technicolor UK, agrees: “We’ve seen a higher number of post projects coming to the UK, aided by the introduction of tax breaks for broadcast. Other companies to point to the new UK tax incentives as an opportunity for the coming year include Halo, Jellyfish, Milk, Onsight, Vine FX and Soho Square Studios.

Ten: Production Partners
More and more post houses are moving up the production food-chain, becoming production partners rather than purely service providers.

“In a time when there are perhaps fewer opportunities and budgets to get brave work made, we’re partnering more frequently with our agencies and directors at the start of the project to make things happen,” says The Mill’s O’Kelly. Similarly, says Mark Benson, md, MPC: “We’re experiencing closer collaboration with our clients, who are being braver and striving for more dynamic solutions across multiple platforms.” Rowan Bray, md post production UK, Prime Focus, is another to say: “There’s been a change in the relationship between post houses and clients. The approach is now much more collaborative and consultative, and we find ourselves involved at a much earlier stage in the development of every project. It pays dividends to clients and us in equal measure.” And Clear Cut’s Holmgren is amongst a handful of other post houses to say they’ve also experienced the same repositioning of their services: “Essentially we’re becoming a technical partner for the production teams.”


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