Setback for aired commercials
Absence of production agreements hurting the industry
WILL aired commercials lose their lustre? This question has been on the minds of production houses since the National Film Development Corp Malaysia’s (Finas) move to withdraw the provision, which was earlier approved by it, for production houses to be members of the Malaysian Association of Advertising Filmmakers (PPFIM) before the Made in Malaysia (MiM) certificate is issued.
This has put PPFIM in a limbo. There are quarters that argue the move by Finas to withdraw the requirement to be members of PPFIM before a MiM certificate is issued is logical as it will prevent PPFIM from becoming a monopoly. They also feel there must be a willing buyer, willing seller clause in the agreement.
On the other side of camp, there is growing support among industry observers, media analysts and production houses for Finas to revert to its earlier decision to allow production houses to be compulsory members of PPFIM before MiM can be issued. It is learnt that the withdrawal by the national film body has resulted in the absence of production agreements. Without a contract any business will eventually be ruined.
For example, the Advertising Producers Association has made it mandatory for members to have production contracts and to strictly abide by them as a step to safeguard its members from any unfair practice and exploitation.
The ball is on Finas court whether to reinstate the requirement for a PPFIM membership before the MiM certificate is issued. Finas will be convening a meeting this month to decide on the matter. As of press time, Finas cannot be reached for comments.
In 2015, PPFIM and Finas made it mandatory for advertising film production companies to become members of the association in order to apply for the MiM certificate – a requirement before a commercial can be aired in the country.
Upon being granted this privilege, PPFIM implemented a production agreement which was supported by the Association of Accredited Advertising Agents.
This ensured that all parties knew their responsibilities in the production of commercials and areas such as payments, proper working hours, etc.
In September last year, without giving any clear reasons and grounds, Finas abruptly decided to withdraw this privilege, which was a major blow to the advertising industry,
In an interview with StarBizWeek, PPFIM president Khoo Kay Lye, who has high regard for Finas which he equates as an “elder brother” of PPFIM, says the absence of proper production agreements will result in the exploitation of the production crew.
There were cases, he says where production crew members were asked to work more than 16 hours without any additional payment.
The recent incident highlights the importance of contracts. The President of Pertubuhan Industri Kreatif Digital Malaysia Muhammad Dean Lau issued a statement on March 19 about the case of an advertising film production crew being shortchanged by RM50,000 being the balance of dues from a production assignment shoot. The setback in the contract was that it was not duly stamped with duty paid. Furthermore, terms were changed from the original agreement.
Khoo reiterates that even popular artistes who appear in commercials are protected by contracts. He reiterates that production agreements protect all levels of talents in the advertising film industry as it forms an integral part of the RM17bil advertising expenditure.
The whole ecosystem of the production advertising will collapse without any production agreement, leading to price undercutting and absence of proper regulation in the film production industry.
“Malaysian talents in the advertising film production fraternity have struggled for recognition for more than four decades with the influx of foreign companies and directors. Huge amounts of fees flowed out of the country. In 1990 the local companies established PPFIM to consolidate their position.
“It was the advertising film producers who gave the foundation for local film producers to emerge, independent of dominance by foreign directors and production companies. With about 200 such production companies in the country, it gives at least about 6,000 talented Malaysians employment,” Khoo says.
The introduction of a production agreement for TV commercials will create the best possible business environment for its members and the primary objective of the agreement is to regulate the quality and efficiency of production services provided.
Khoo adds: “This will be a great help to the members because they will understand their obligations and do not have to spend time negotiating terms for each production. It means that they can devote that time to making the commercial as brilliant as possible.”
Among the salient terms stated in this contract are the mandatory first 50% payment by the creative advertising agencies or “direct clients” (known as “Party A”). For locally produced jobs, the new terms of payment are; 50% before the shoot commences, 30% two weeks after the shoot and the balance 20% no later than 60 days from last day of the shoot.
For production houses rendering their service to produce foreign jobs, “Party A” has to pay 60% upon signing of this contract and 40% upon completion of the online edit.