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November 2018

In the magazine
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  • The Facilities 50
    Jon Creamer launches Televisual's 31st exclusive annual Facilities 50 survey featuring the top post production houses in the UK and 48 pages of analysis of the sector
  • The Commercials 30
    Jon Creamer introduces Televisual’s exclusive Commercial 30 survey, reporting on a year of highs and lows for commercials producers.
  • The Drama Genre Report
    With competition from streamers intensifying, UK broadcasters are exploring new drama strategies. Tim Dams reports
  • Primary Colours
    Five leading movie colourists tell Michael Burns the secrets of their craft, and explain the techniques they use to grade movies like The Danish Girl, Peterloo and Baby Driver
  • Up, up and away!
    Thanks to advances in camera technology, the possibilities of aerial filming are greater than ever before. Pippa Considine reports on some of the year’s standout aerial projects
  • OB: Which Way Now
    The OB industry is embracing major change as it adapts to the worlds of UHD, HDR and IP. Michael Burns reports
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Facilities 50 2016 Back to Reports & survey Listing

Brexit took its toll in the middle of the year and budget squeezes and undercutting haven’t helped either but the UK’s post houses are still in an expansive mood and are taking advantage of the new opportunities on offer

In last year’s Facilities 50, we reported that it was the first time since the depths of the 2008 recession that the post world was feeling properly confident again.

So has the mood changed this time? Well, yes and no. Total turnover is down a little – £591m compared to £632m last time but the median average turnover of the survey remains roughly the same. 76% of respondents said their turnover was up and 74% said their profits had risen too so there’s a generally positive mood.

Brexit fears
The issue that caused a bit of a wobble during the past year was obviously the Brexit vote.

The referendum came along slap bang in the middle of 2016 and many believe it caused a definite slow down, though hopefully a temporary one. “Brexit uncertainty definitely had an affect with jobs either being cancelled or revised with less ambitious creative,” says Big Buoy. “Thankfully things have picked up and we’re now seeing lots of scripts coming through.”

Bravo also reports a “very good start to the year, but a definite slow down due to the Brexit referendum.” And that pattern is repeated across a variety of post houses. Fifty Fifty says that the “first six months of 2016 were very buoyant. We saw growth in every revenue stream. June and July however were much slower. Though this is traditionally our quiet period I was concerned that this was the shape of things to come in the Brexit era; it felt all too similar to the recession. But, August has bounced back, we’re full once again and look to be so until February 2017.”

But, of course, Brexit hasn’t happened yet and no one yet knows what shape it will take. In the first instance, it’s that uncertainty that a good chunk of the post houses in the Facilities 50 point to as a threat to their businesses.

The Farm identifies “Brexit uncertainty” as a concern, as does Lipsync (“uncertainty following Brexit”) and Jumbuck (“Brexit poses a lot of uncertainties”). Freefolk (the new name for Finish and Realise) also points to “uncertainty in the market surrounding Brexit for advertisers.” MPC too says a big worry is “how uncertainty around Brexit will affect marketing budgets.” Uncertainty can lead to log jams as those with money to spend tend not to spend it until they can see the path ahead more clearly. 

But aside from uncertainty leading to financial constipation, Brexit also poses some more specific worries for post houses. “We have already felt the considerable challenge of convincing EU employees that their future is secure in the UK,” says Jellyfish. Other vfx specialists are also worried about a talent drain if EU nationals can’t work in the UK so freely. Milk VFX also points to the “possible threat to EU VFX talent availability” as a concern, as does Technicolor.

Scarcity of talent is already a problem with or without Brexit. Platform bemoans a “shortage of young vfx talent” and dock10 points a “specialist skills shortage.” Silverglade gives as an example the fact that “we have had an advert out for a senior MCR op for a while!”

However, as Encore says, Brexit is “both a potential threat and an opportunity.” And in the short term at least, post houses have seen the advantage of the weak pound caused by the Brexit shock. “Our exports are more keenly priced thanks to the low value of the pound following Brexit so attracting work from the US should be more possible,” says Twickenham Studios. Pinewood too says that “short term, Brexit has been helpful in terms of exchange rates as most of our clients are US-based.” Rushes has “seen heightened opportunities to win overseas work” as the dollar rises against sterling. Nineteentwenty also says “the cheaper pound will encourage overseas work.”

Bulking up
Last year, we also reported on a mood of expansion and growth in the post production sector. Facilities were opening new buildings, there were takeovers and buyouts and joint vetures as many companies sought to grab more work, diversify into new areas and simply get bigger.

That expansive mood has continued. Since the last survey, Molinare bought out VET’s Hoxton Square building to bag some of the increasing Shoreditch based post work, MPC moved its LA studio to a larger, purpose built facility in Culver City. Evolutions, fresh from a round of opening new buildings says it’s looking at “further opening of new offices in UK regional and national locations.” The Farm moved into its shiny new Newman Street headquarters this year but says it will “continue to explore client-site joint venture opportunities,” like the one it currently runs for UKTV.

Directors Cut says that “expansion of both space and facilities is being planned.” Halo too says that it will “add a significant amount of real estate in 2017, more than doubling in size to cope with demand.” Jellyfish Pictures is building a new facility at the Oval in South London to accompany its studios in Noho and Brixton. And across the pond, Freefolk is “expanding into the US with a full service post offering with colour grading and vfx based in NYC” and in the UK is “also taking back another floor at Wardour Street to accommodate our film and TV vfx department.”

Splice too says it expects “growth to be serviced by additional premises in 2017.” TVC Soho reports it is “opening up more cutting rooms and doubling in size our final post offering.” Tenthree also is “increasing the amount of edit suites with new Avids etc,” GPS says it’s expanding its “sound and editorial departments and Twickenham plans to add a second cinema-style grading suite to its offering. Silverglade reports it’s “on the lookout for new joint ventures” while West Digital is “investigating possible company acquisitions, which would help us grow in new markets while bringing on new talent.”

On demand
Much of this growth is fuelled by UK post and production becoming a much more globally successful sector with work pouring in now from overseas markets, particularly the US and particularly from major new entrants like Netflix and Amazon.

“It has been a good year,” says Encore. “The emergence and strengthening of new OTT platforms has provided new opportunities, especially in the form of Amazon and Netflix who are commissioning ground breaking productions.” In fact a good chunk of the Facilities 50 respondents point to Netflix and Amazon as a major opportunity for UK post in the years ahead.

There’s also excitement at the general increase in high-end drama content driven by public demand with its production in the UK fuelled by favourable tax breaks. High-end TV requires high-end vfx and finishing, after all, something the UK’s post businesses are well set to provide.

The big squeeze
The mood isn’t all great though. There’ll be no surprises that squeezed budgets are still a concern and that runs across those specialising in commercials, TV, film and corporate. points to the “continual decline in rates,” BBC Studioworks complains of “reduced budgets,” Suite points to the “constant pressure downwards on budgets,” Rushes talks of the “erosion of rates on every budget” as does pretty much every company replying to the Facilities 50.

Much of that comes from the intense competition in the sector. It’s a competitiveness that breeds excellence but it has negative effects too. Many are willing to race to the bottom on rates just to keep the facility turning over. As Envy says, there are “too many companies providing post for unsustainable rates.” And that’s because there’s over capacity right now, says Clear Cut: “London now has more edit suite capacity than work that is available creating worrying price wars.” Rapid Pictures too points to “facility oversaturation.” The more boutique players like Coffee and TV complain of “large facilities offering volume discounts” that are tough to compete with on price alone. For those competing in the global marketplace on film work, undercutting is even more stark. “When the big vfx houses slow down in Canada, they gobble up the slightly smaller projects that would otherwise be split amongst the medium vendors in London,” says Blue Bolt.

There are other pressures too. As Absolute says, “many ad agencies are reacting to pressure on their fees by bringing production and post expertise in house.” Ad agencies are more often hovering up the bread and butter post and production work that used to keep everyone ticking over. And it’s not just in the world of commercials where in-house post is a threat. Cheaper equipment and software means many TV and corporate production companies are keeping as much post in house as possible. West Digital says that “more in-house post – at both production companies and broadcasters” is becoming a difficulty, as do several other respondents to the survey.

More contented
But while traditional commercials and broadcast work is tight, there is also a whole new world of content opening up. As dock10, among many others, says: “The rise in the amount of content that is being created continues to grow significantly, especially in the commercial and corporate sector and we are seeing a lot of growth in clients needing our support in terms of both content creation and content management.”

Video is everywhere now online and on mobile and its consumers expect it to be as high quality as the content they view elsewhere. And that’s a “huge opportunity for talented content creators,” says Absolute.

And it’s as content creators, not just post producers, where many see possibilities. “It’s been another year of crossover for the industry with post houses directing more work and at the same time agencies and production companies taking on some post production tasks,” says Time Based Arts.

“This makes for interesting times, with the possibility of post providers pitching on jobs against their primary clients. Could be awkward but it seems to be working out so far and some of the work being produced has been exceptional.” Should make for interesting viewing.

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