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October 2017
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  • The Facilities 50
    Jon Creamer launches Televisual's 30th exclusive annual Facilities 50 survey featuring the top post production houses in the UK and 52 pages of analysis of the sector
  • Interview: Grant Mansfield
    Hiring top talent and investing heavily in development have been key to growing his Bristol indie Plimsoll Productions, says founder Grant Mansfield
  • The clear view: lenses
    What ever genre you work in, you need to be lens savvy. Here three DoPs guide us through the lens market, picking out the models they like to use in drama and factual
  • Over the top
    The growth of Netflix and Amazon is proving a boon for UK indies, but broadcasters are starting to panic. Tim Dams reports
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    The producers of Blue Planet II tell Tim Dams how tech advances and military planning helped them capture the secrets of the deep
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Reports&
surveys

Facilities 50 2015 Back to Reports & survey Listing

There’s a brighter 
mood, with lots of work about, and plenty of expansion and even acquisition. But not everything in the post world is looking rosy. Jon Creamer reports

In last year’s Facilities 50 survey, the mood was certainly brighter than it had been for some time in post production. But this is probably the first Facilities 50 survey since the worst depths of the recession where we can confidently report that the post world is feeling properly confident again.

The majority report that turnover  and profits are up. Altogether, the post houses replying to this survey turned over £632m between them, up from £560m last year.

There are plenty of caveats to this sunny outlook, of course, but the majority of companies are at least saying that recent months have seen a marked upturn in the volume of work coming through the front door, particularly in broadcast.

Turn up the volume
“It looks like post has finally come out of the red, into the black and is quite possibly booming again,” says Fifty Fifty. Preditors agrees: “2015 has been a busy year and there has been a noticeable increase in work in all areas.” 

“A very successful year with strong repeat primetime series. The facility in London has been operating at or close to capacity since May,” is Crow TV’s take on things.

And while Envy is reporting a fairly slow start in the first quarter of the year, “now it is ‘off the scale’ and we are running out of space and adding another 17 rooms to a temporary location (pop up).”

Vfx specialist Jellyfish says that “more work is getting commissioned across the board in broadcast from factual through drama and kids” with an obvious benefit along the food chain for post houses geared towards that business.

TV comedy house Suite describes the past 12 months as “a very busy year – peaking at Christmas with over 15 shows being completed and transmitted in the Christmas week.” And Storm HD reports a “very strong year with lots of good quality work around. We’ve had to turn away multiple enquiries because we have been at capacity.” In Glasgow, there’s a similar story reported from Serious Facilities: “the best year in our history,” says the post house.

There were regional variations to the picture though. Bristol had a particularly tough time. “The early part of 2015 saw an unusually low amount of Bristol-based commissions, which has affected all facility houses in the city this year,” says Big Bang. “Thankfully the second part of the year is much more busy.”

Bristol’s biggest post house Films@59 reports it “had a slow start to the year and we had to make the difficult decision in May to let a number of staff go to help reduce our overheads” but thankfully “since June, business has improved and looks pretty buoyant until the end of the year.”

Bulking up
If proof were needed of an increased confidence in the post world, it’s in the sheer amount of expansion that has been happening in recent times with many companies opening new floors, adding entire new buildings, expanding their offering, even buying up other companies.

The Farm is soon to move out of its longstanding headquarters on Soho Square (partly as a result of its landlord wanting to cash in on higher residential rents – more of that later) with its new Newman Street development due to be a massive 33,000 square footer that will hook up with the group’s other offshoot buildings.

Unit reports that it has “grown year on year without fail over the last four and a half years. That growth has continued and we have just opened another floor for our new flagship enterprise UNIT: Colour. In December we will be opening yet another floor to increase the size of our studio.”

Smoke and Mirrors says that it has “added considerable additional capacity to the already-enlarged London facility, in addition to scaling up our existing operation in New York and building an entirely new support facility in India to augment our existing APAC presence in Shanghai.” While MPC reports that it has increased the capacity at its New York studio by 50% with its LA facility ready to move into a purpose built studio in Culver City.

Up in Old Street, Splice is consolidating after doubling the size of its facility last year and Evolutions has opened new buildings in both its London and Bristol bases. Platform Post says that “after a growth period in 2014, it turns out we need to grow again. We will be doing this through expansion as opposed to acquisition as we prefer to build our own business rather than take over and then fix someone else’s.”



Buy buy buy
But many are looking to buy other companies alongside expanding their own operations organically.

Halo says it has “a number of acquisitions lined up” and is “also developing local, regional and international partnerships for a 2016 rollout.”

And Molinare has set itself on a path of growth, buying audio specialist Hackenbacker a few months back and hinting at more acquisitions to come. It’s also teamed up with Manchester’s Flix to give both post houses a foothold in another region and a degree of extra heft. “There seems to be a movement towards partnerships and consolidation to make for better business,” says Molinare.

That tie up comes on the back of Flix’s own expansion with the opening of a new “£1million facility” on the seventh floor of MediaCityUK’s White Tower taking an extra 5,500 square foot back in June.

Acquisition and consolidation within post does seem to be on the cards more generally. The most recent news being that the biggest post house in the UK, The Mill, has been bought by Technicolor in a deal worth £190m. And this is a move that now places The Mill as part of the same group as another of the UK’s big three, MPC. The Mill’s Robin Shenfield says the companies will remain operationally remote and will continue to compete, and that the deal is about acquiring technological back up for the brave new world of VR, AR and everything in between. But it does also seem indicative of a wider move in post towards strength in scale.

“We appear to be entering an era of the ‘Super Post House,’” says Fifty Fifty. And that’s not seen as a good thing necessarily by those that don’t possess the same sort of width. “Will the massive ‘super-facilities’ with rooms to fill start another price war making it hard for the smaller post house to compete?” Fifty Fifty continues. It’s early days yet, but other industries have ended up with supermarkets at one end and boutiques at the other with middle sized players increasingly squeezed.



Tanks on the lawn
There are other threats too. For those post houses focussed heavily on commercials, the trend for agencies to open their own in-house post outfits over the last few years to scoop up a bigger slice of the advertising pie is a source of great concern. Nice Biscuits, Realise and Unit are just three of the many who pick this phenomenen as a worry. Over at West Digital, a facility focussed on broadcast, there are similar concerns about TV production companies taking post functions in house.

But while this is a danger to post houses, it’s also shown many of them on the commercials side that if you can’t beat them, join them. “More companies are throwing away the traditional title of ‘post house’ and diversifying into one stop shops offering creative direction and production as well as just post,” says Finish. “This is a clever rebuttal to agencies also offering production and post and production companies offering post and so on.”

Post houses are finding that they too can venture out of their traditional silos and sell their skills in new ways. “Traditional industry delineations have melted away and everybody is grabbing all the work they can find,” is how Realise categorises this. Because while agencies and production companies are offering post in house, post houses are now often offering production in house too. Big players like Framestore for instance, has launched its official production arm Framestore Pictures with teams in LA, New York and London this year. The Mill has Mill+ too, which directs and produces advertising direct for clients along with completing the post and vfx too.

New markets
Post house horizons have widened in other ways too. There’s a greater range of clients looking for high-end post production now. As online content matures, the desire for professional post polish has grown along with it. Fifty Fifty, among others, points to “short form branded content,” as a big opportunity for post production.  “Every brand requires professionally made video, done well. We are no longer competing for projects intended for one output, which means there’s a huge market to grow. As audiences, advertising revenue and budgets grow so to will the business coming into Soho.”

And that business also allows post houses to diversify their client base with brands now coming direct to the post house. “Mixing the revenue streams up is really important. Traditional agency led work combined with direct to client. Vfx work combined with retail and experiential,” is now key, says Glassworks.

Dramatic times
Other changes have also benefitted the UK post business. Changes to tax incentives for high-end TV, animation and feature films have allowed facilities to consolidate their reputation as some of the best in the world when it comes to the high-end of the high-end. Creativity Media points to “international films posting in London,” as a big opportunity.  The newly-founded Blue 2.0 (too newly founded to be in this year’s Facilities 50) points to “more high-end dramas, higher production values and a bigger spend on TV vfx,” as a major opportunity. And Molinare points to “increasing commissions from the US due to the tax credits, plus increased co-productions from countries such as Canada and Australia.” The emergence of Netflix and Amazon as serious players in the world of high-end drama has led to a knock on effect in the UK. “More players in the TV marketplace emerged which shook things up a bit in the world of episodic television as broadcasters competed to bring original and compelling shows to the global marketplace,” says Encore. Facilities including Pinewood Post, Onsight, MPC, Lipsync, Realise and The Look all point to increased high-end TV as a big opportunity. If post is booming, this is a major driver.

Money’s too tight
But despite all these brave new worlds, the traditional concerns aren’t going anywhere soon. Because while post houses are reporting that there’s a greater volume of work around this year, it’s no surprise that that doesn’t come hand in hand with an uptick in rates. In fact, when asked about their concerns, post houses across the board answer in the same way: “Lots of pressure on rates,” says Coffee & TV; “clients are … demanding more for less,” says Absolute; “more projects, smaller budgets,” says Fluid; “broadcasters continuing to squeeze budgets,” says Evolutions; “decreasing budgets and rate under-cutting,” says The Farm; “the continued erosion of rates on every budget,” says Rushes; “the continual decline in rates,” says 422; “the increasing downward pressure on rates,” says Suite.

Rent on the rise
All this comes at a time when many costs are shooting up. Pressure on property has led to rent rises across the UK and that goes triple for Soho, the epicentre of the post world where rent increases are becoming a major headache for facilities. As Soho scrubs up and landlords realise they can make more money from residential renters, they are squeezing their business tenants. Almost every post house with a toehold in Soho points to rent increases in the area as a major problem: “Prices per square foot have doubled and are still going up,” says Blue Bolt. “The recent influx of residential property in the area, migration of post facilities to cheaper climes and general clean up of Soho’s character could add to the demise of one of London’s best-known creative hubs,” says Fifty Fifty. Let’s hope not.

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