Over the course of 2016, I had the opportunity to meet with people from every corner of the creative industries. From chief marketing officers to top agency creative directors, production company producers to animation studio owners and hundreds of freelancers from all over the world. This has given me a unique perspective on the opportunities, challenges and changes the industry is facing over the coming year
While many people will be making predictions about the latest camera technology, branded content, live video and the rise of VR; it all boils down to the fact that this output is linked to the way people are working together.
We have decided to jump on the bandwagon of predictions, and have projected what we believe will shape our industry in 2017. Let's take a look at the industry fragmentation.
So, who’s doing what?
Traditionally, there was a simple structure in the creative industry. Brand hired an agency; the agency came up with the creative, agency hired production company with a roster of directors, production company delivered the work, the agency worked with media partner and distributed the content as part of a wider campaign. With so many distribution channels available today and access to suppliers more prevalent than ever, the traditional structures have, inevitably, changed.
Large brands such as Unilever, Starbucks and BMW have already set up in-house production capabilities with the help of Oliver agency. Some other brands will follow in 2017 but although control and cost savings are attractive, there are limitations to their capability and creativity that working with agencies offers them. Brands including Airbnb and Skyscanner are adopting the approach of hiring specialist producers, bypassing both the agencies and production companies by going direct to freelancers. As a general theme brands are being savvier in the production process, with ex-production/ex-agency producers moving client side. Technology, like in other industries, is also increasing visibility on talent and making the collaboration process easier.
As a way of keeping business inside the big agency groups, agency staffers have been rapidly scaling out their in-house production units. In some cases, this has been extremely effective for the agencies. But, many have struggled with attracting the best talent on full-time contracts and clients are increasingly questioning if they are getting the best quality work or value for money. Recent bid-rigging investigations are going to put the spotlight on many of the agencies at the start of 2017 and clients will be scrutinising their processes and recommendations more closely.
The big winners for 2017 will be the PR companies who have strong client relationships and established distribution networks. They’ve already been adding creative and production capabilities and will be winning work from the traditional creative agencies who have been undergoing some big changes. Another area to watch with interest is the consultancy businesses who also have the trust and ear of clients. Accenture recently bought Karmarama at the end of year, showing their intention to move into this space.
2016 was a tough year for most production companies. With agencies moving production to an in-house model and many freelance producers now more than capable of building their own teams and offering similar services, production companies have evolved in two ways.
One approach has been to become more like agencies and offer creative and distribution as part of their services. With video becoming such a big part of the marketers’ strategies – with 90% citing video as the primary form of marketing in 2017 – it’s an attractive alternative without the inflated price tag.
The other approach has been to streamline their operations. A lot of production companies, especially in TV, have dramatically reduced their operational overheads and staff. A core team of producers are now hiring freelancers on a project-by-project basis. While the day rate might be more expensive, the quality of the work is often improved and in downtimes, reserves can be protected. The most successful are employing a combination of the two approaches and with agencies needing to adopt a more transparent approach to their bidding, 2017 could see a change in fortunes for production companies.
A common theme among many represented directors was the frustration of the lack of opportunities on offer from being exclusively signed to a production company. If you aren’t top on the roster the chances of even pitching on work can be slim.
To compound the issue, lower-budget work they might be suited to is often passed over by their production company, as it could devalue the company’s high-end work. Frustrations aren’t limited to the smaller directors either. Many established directors are seeing appealing projects pass them by as clients look to avoid the expensive quotes and overheads associated by their production companies. This cycle is linked to the changes in the way budgets are now being distributed across so many channels and is reflected in the proportion of high-end work versus oversupply of directors.
While directors might be being paid an impressive ‘shoot day’ fee or percentage of the budget, their involvement in proportion to time on a project can often result in a lower per day rate than any of their crew. Some production companies are recognising this, and to combat it, a number are changing their contracts to allow their directors to be non-exclusive, taking on their own work and developing their craft on other projects outside of the production company.
Freelancers did well for themselves last year. With many agencies trying to attract full-time staff and production companies streamlining their processes, freelancers have seen an increase in the number of work opportunities. Quite a bit of this is still coming from word-of-mouth recommendations but producers are increasingly looking at alternatives to their current suppliers as the pressures to produce more and better quality work increases. 2017 will see more freelancers in the market and it’s going to get competitive. It is now, therefore, more important than ever to project yourself in the right way. We are seeing an interesting trend of people working remotely and unlocking the global workforce, hiring based on talent and not limited by location.
Formed from a mixture of production companies evolving and freelancers’ access to work increasing, we’ve seen a big surge in the number of collectives forming. Often based outside of the main production hubs these collectives can offer an even more flexible service to clients while maintaining their income from freelance work. The biggest challenge they face is ensuring that they are set up and structured in the right way and using best practices to avoid project creep.
As Movidiam is a global platform hosting creatives from all walks of life, shape and form, we can see that a freer style of working will be the key trend for brands, agencies and production services in 2017. The threat to the traditional way of working will have to be embraced by the gig economy, and the ‘uberisation’ of creative services will be the norm. Ultimately, collaboration is key and as long as we have a way to communicate with others in the industry to provide great work for clients, there is no reason to fear.
Alex Vero is co-founder of Movidiam.