2016, a Ma­jor Shift to Dig­i­tal Where Now for Pro­duc­tion Houses

The pro­duc­tion in­dus­try is in flux as the dig­i­tal rev­o­lu­tion con­tin­ues to wreak havoc and ad­ver­tis­ing agen­cies strug­gle to sur­vive. As com­pa­nies re­de­fine them­selves, Arabad asked some of the most ac­tive play­ers what chal­lenges do pro­duc­tion houses face an

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The past few years have been tough for pro­duc­tion com­pa­nies, just as they have for the ad­ver­tis­ing agen­cies and brands they work with.

To start with, 2016 was a hard mar­ket money wise. Brands that nor­mally pro­duce five to six cam­paigns a year were re­duced to rolling out just one or two, with bud­gets half – or some­times less than half – of what they were pre­vi­ously. It is a time of cut­throat price wars, tougher com­pe­ti­tion, change, and the harsh eco­nomic con­di­tions pro­duced by low oil prices and po­lit­i­cal tur­moil.

In the midst of all this, pro­duc­tion com­pa­nies are bat­tling to both sur­vive and evolve. Pop-up com­pa­nies that think a Canon 5D and a lap­top are all you need to pro­duce mean­ing­ful con­tent may strug­gle in the long term, but they are undercutting the mar­ket at a time when clients are slash­ing bud­gets even fur­ther.

“In the past we used to know all of the big, medium and small play­ers, now half of the ex­ist­ing ones I have never heard of,” ad­mits Eddy Rizk, man­ag­ing di­rec­tor of Big Kahuna Films. “Which is un­for­tu­nately trans­lat­ing into more and more lower qual­ity pro­duc­tions, which is clearly vis­i­ble by look­ing at the ma­jor­ity of the work that is be­ing pro­duced.”

As Shane Martin, film di­rec­tor and chief ex­ec­u­tive at Boom­town Pro­duc­tions, says, pri­or­i­ties are chang­ing and there is con­tin­ual down­ward pres­sure on bud­gets. “It seems that there is a per­cep­tion amongst some ad­ver­tis­ers and agen­cies that by sim­ply call­ing a pro­duc­tion ‘con­tent’ then the pro­duc­tion cost is halved,” he says. “This is so ob­vi­ously not true that I some­times de­spair. Re­gard­less of which screen any par­tic­u­lar pro­duc­tion ap­pears on, an ac­tor/tech­ni­cian or crew mem­ber still has to be paid. They still have to eat. Call­ing it ‘con­tent’ and then ex­pect­ing the same pro­duc­tion val­ues and prep and hand­hold­ing that tra­di­tional TV com­mer­cials re­ceive is disin­gen­u­ous.”

Martin says his own views on how the pro­duc­tion in­dus­try is chang­ing are neatly summed up by David Gold­ing, the co­founder and group chief strat­egy of­fi­cer of Adam & EVE/DDB, who re­cently wrote of a clear di­vide be­tween cul­ture and col­lat­eral. “Our in­dus­try will split into two types of com­pany, which will set out to cre­ate two very dif­fer­ent things,” wrote Gold­ing. “The first will work to cre­ate cul­ture through cam­paigns that gen­er­ate fame, talk­a­bil­ity and mimetic power. The sec­ond will cre­ate col­lat­eral driven by data and the on­go­ing abil­ity to pre­cisely tar­get and reach au­di­ences in new ways.”

We are thank­fully be­gin­ning to see bet­ter and bet­ter work com­ing from the re­gion. Shane Martin —

“What this means to the pro­duc­tion in­dus­try is a lot of new play­ers on the block,” says Martin. “The big me­dia com­pa­nies are now cre­ators of con­tent, pri­mar­ily of the col­lat­eral type, driven by big data and de­signed to tar­get spe­cific au­di­ences. What is re­mark­able is that even though broad­cast me­dia spend (tra­di­tion­ally 80 to 90 per cent of the cam­paign bud­get) has been taken out of the equa­tion, there is still an ex­pec­ta­tion that the con­tent pro­duc­tion cost should be su­per low, and yet the ex­pec­ta­tions of clients that the con­tent go ‘vi­ral’ are cor­re­spond­ingly high.

“Hope­fully over time this sit­u­a­tion will cor­rect it­self and every­one will see sense. ‘Share­abil­ity’ and go­ing vi­ral needs great cre­ative, ex­e­cuted per­fectly. This is where pro­duc­tion com­pa­nies can add value and shine by em­brac­ing the cre­ative chal­lenges and ex­e­cut­ing them in the best way, sup­ply­ing the best cre­ative tal­ent and di­rec­tors and then man­ag­ing the pro­duc­tion re­sources in­tel­li­gently to en­able them to cre­ate unique and orig­i­nal work.”

Gabriel Chamoun, chief ex­ec­u­tive of The Talkies, agrees that more and more pres­sure is be­ing ap­plied by clients and agen­cies to­wards re­duc­ing cost, adding that: “There’s also more de­mand for dig­i­tal con­tent ver­sus TVCS, which im­plies longer for­mats (60 sec­onds and above) at a lower cost.

“The client/agency/pro­duc­tion house model is be­ing ques­tioned,” he adds. “We have been fol­low­ing this hi­er­ar­chy for decades, [but] it’s not easy to change old habits. The chal­lenge is, more than ever, pro­duc­ing high qual­ity at com­pet­i­tive rates.

“Dig­i­tal con­tent often re­quires a smaller film crew, multitasking, younger less ex­pe­ri­enced di­rec­tors, cam­era­men, ed­i­tors, and other team mem­bers. It’s im­por­tant to have client, agency, and pro­duc­tion houses aligned on the ex­pec­ta­tions and what’s needed to reach those ex­pec­ta­tions.”

Chamoun says The Talkies is work­ing to­wards stream­lin­ing the whole pro­duc­tion chain in or­der to re­main com­pet­i­tive and prof­itable, whilst de­vel­op­ing new ar­eas of ac­tiv­ity.

Joy Films, mean­while, has adapted to the chang­ing environment by cre­at­ing two sep­a­rate en­ti­ties, each with its own iden­tity, strat­egy and process. This has been done to be able to com­pete at both the high end of the mar­ket, as Joy Films does, and at the low-bud­get range, where Street­wise Films op­er­ates. Boom­town, says Martin, has placed a big­ger em­pha­sis on in-house creativ­ity and is ex­pand­ing both its pro­duc­tion and post-pro­duc­tion of­fer­ing.

It has al­ways been the case that in­dus­tries and com­pa­nies have to con­tin­u­ally adapt to mar­ket con­di­tions and new tech­nolo­gies, but with con­tin­ued global con­fu­sion over the on­line rev­o­lu­tion, busi­nesses are still adapt­ing. As such, the mar­ket is re­ac­tive and un­cer­tain, says Ali Azarmi, co-founder and man­ag­ing di­rec­tor of Joy Films and Street­wise Films, with a lot more ques­tions than there are an­swers.

“Com­mer­cial film pro­duc­tion com­pa­nies have al­ways been de­pen­dent on ad­ver­tis­ing agen­cies, so what­ever af­fects the agen­cies will af­fect pro­duc­tion com­pa­nies,” says Azarmi. “The ad­ver­tis­ing in­dus­try has been go­ing through a lot of changes since the rise of on­line and pro­duc­tion com­pa­nies have to be aware of where the ad in­dus­try is head­ing rather than wait to re­act.

“Dig­i­tal tech­nolo­gies have made new forms of sto­ry­telling pos­si­ble. Ac­ti­va­tions and doc­umer­cials for ex­am­ple. It has en­abled more peo­ple to be­come film di­rec­tors and cre­ate new styles of sto­ry­telling with­out the con­fines of any film­mak­ing tra­di­tions. This has been a greatly in­flu­en­tial evo­lu­tion, which is on­go­ing. Right now there is a lot of over­lap and blur­ring of tra­di­tional dis­ci­plines. Me­dia agen­cies of­fer­ing con­tent ideas, ad­ver­tis­ing agen­cies cre­at­ing their own con­tent with their own in-house

The client/agency/pro­duc­tion house model is be­ing ques­tioned. Gabriel Chamoun —

pro­duc­tions, pro­duc­tion com­pa­nies and their di­rec­tors cre­at­ing ad­ver­tis­ing ideas and scripts for on­line con­tent. All try­ing to re­de­fine them­selves.”

For Valérie La­houd, ex­ec­u­tive pro­ducer at Zoé Pro­duc­tions, the chief chal­lenge fac­ing pro­duc­tion houses is the po­ten­tial demise of ad­ver­tis­ing agen­cies. If they can’t find a so­lu­tion to the dig­i­tal rev­o­lu­tion, the knock-on ef­fect will greatly dam­age those in pro­duc­tion.

“Every­one is ask­ing us how we are go­ing to face the chal­lenge of the dig­i­tal era,” she says. “How are ad­ver­tis­ing agen­cies go­ing to evolve and sur­vive, and where can we find a place a serve them? If they can­not sur­vive, then we will have to change our busi­ness. Do we work with clients di­rectly and take care of ev­ery­thing, in­clud­ing all cre­ative, and risk up­set­ting agen­cies? Do we branch out into other forms of con­tent? There is a big tran­si­tion go­ing on now and no one is find­ing a so­lu­tion.”

An in­dus­try in flux, how­ever, of­fers as many op­por­tu­ni­ties as it does chal­lenges, even if, as Martin says, the pro­duc­tion in­dus­try in this part of the world needs to be bet­ter or­gan­ised and bet­ter re­sourced. To this end, he and oth­ers have been work­ing hard on the cre­ation of the UAE Pro­duc­ers As­so­ci­a­tion, whose launch is to be an­nounced in the com­ing months.

“We are thank­fully be­gin­ning to see bet­ter and bet­ter work com­ing from the re­gion and it’s re­fresh­ing to hear in­stances of agen­cies em­ploy­ing di­rec­tors to orig­i­nate ideas and then em­pow­er­ing them to make them,” says Martin. “No agency briefs, no over-tested stran­gu­lated sto­ry­boards, just faith and a be­lief that the film­maker will come back with some­thing that de­lights every­one. So from a pro­duc­tion com­pany per­spec­tive we are play­ing both sides of the equa­tion, with a fond­ness for the cul­tural but an un­der­stand­ing of the col­lat­eral.”

“Sur­vival is the strong­est in­stinct and no one can take it for granted,” adds Azarmi. “Ev­ery­thing else is an op­por­tu­nity not a chal­lenge. We have to en­sure ev­ery pro­duc­tion we un­der­take is given ev­ery sup­port from all quar­ters and fight for ev­ery frame if we have to and make sure it doesn’t fall vic­tim to com­mit­tees. We have to con­vince those who tick boxes to tick out of the box.

“To sur­vive we have to be con­sis­tent, per­sis­tent, rel­e­vant and com­pet­i­tive. To thrive and grow, we have to be­come an in­dis­pens­able as­set to our clients, a stake­holder and not a sup­plier. We have to di­ver­sify and use our core skills be­yond com­mer­cial film pro­duc­tions to TV or cin­ema. We have to be­come a brand.”

To sur­vive we have to be con­sis­tent, per­sis­tent, rel­e­vant and com­pet­i­tive. Ali Azarmi — There is a big tran­si­tion go­ing on now and no one is find­ing a so­lu­tion. —Valérie La­houd

Dal­lah Al­baraka by Boom­town

CBD by Boom­town

ADMAF by Boom­town

TCA by Boom­town

From Al­marai spot by The Talkies

Fom City Walk TVC by Joy Films

Chadi Younes’ Match­box for BLOM bank by Zoé Pro­duc­tions

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