29 Jun 2017

In-house production; The debate continues

As in-house production continues to cause concern, Shots talks to MD of The Sweet Shop London, Spencer Dodd and other industry professionals about their views of it.

The debate about in-house production arms being set up by agencies and clients is still raging. Some believe that they’re offering a more flexible approach, while others believe that they are unfair and are inhibiting directorial development.

With their ongoing emergence and evolution, we asked industry experts from all sides what impact these entities are having – and might continue to have – on quality creative production.

The best will always win

Chris Chaundler, founder and production director, VCCP Kin London

“In short, very little [impact]. While it might be nauseating that one only needs to point a camera at an overweight cat to guarantee more views than your expensively crafted masterpiece, we can’t blame internal production units for this. The rules of engagement have changed. Nowadays, everyone has access to the tech and platforms to film and broadcast content like this.

The impact of internal production units is being overstated. It’s a competitive market, where everyone is being driven down on price. Internal units need to be just as adaptable and forward looking as any production company. Arguably, there’s more at stake for them; they carry the agency’s reputation and the confidence of creative teams. Sub-standard internal units will simply shrink into the corner and make case study films, while the good ones will continue to grow, working with and complementing the good independent production companies.”

The judge can’t be the winner

Steve Davies, chief executive, APA London

“It’s about what is best for the client. Why would a monopoly supplier, in the shape of an agency doing its own productions, be better value than three production companies fighting to produce a script in the open market? To win the script, the production company has to compete on quality by creating the best treatment possible and on price.

The US Justice Department investigation into bid rigging has focussed the minds of clients. How can it possibly be right for anyone to be a participant in a competition and the judge of the winner? That is the position that agencies put themselves in when they decide to bid their in-house production unit against independent production companies. It would be like running a lottery, buying a ticket yourself and choosing the winning numbers. Clients – indeed anyone – immediately see that’s wrong, and it’s bad for advertisers because what looks like an open market competition for their work, to guarantee value, is in fact not open when the agency is bidding itself.

I think we are winning the argument – it’s about good business practices and a genuine free market creating the best work at the best price for advertisers.”

Investment is key to creative choice

Francois Chilot, president, YDA; honorary chairman, Commercial Film Producers of Europe

“Over the years our business has become fiercely competitive and the technological and media revolutions have redesigned our industry. Medium-sized and independent agencies disappear while agency networks grow bigger and lean heavily on production companies.

The core of the producer’s role is to discover, promote and nurture directors. We know how to give a chance to beginners. More often than not we invest in the films we make, we willingly spend some of our mark-up, if not all of it, to enhance the quality of the film; producers work on a long-term basis. In-house production companies seek immediate return on investment.

Production companies take risks. I doubt if in-house production companies will deliberately do that. By investing to launch a director’s career, production companies create value. In-house production companies do not invest in quality, they create new financial resources for themselves. By doing this, they take over a large part of our turnover which is vital for independent production companies to survive and to invest in new talent. Medium-sized production houses will disappear, thus reducing dramatically the search for new talent and also the very wide and creative choice that is currently offered to agencies and marketers. This will lead to a reduction in creativity and innovation in filmmaking.”

More ways of making than ever

Charlie Gatsky, head of production/managing partner, BBH London

“There are obviously many different industry views, depending on what perspective you are coming from but, on balance, from where I sit between both our internal Black Sheep Studios and our many revered external production partners, I believe the positives outweigh the negatives.

I don’t think agencies had a choice but to find new agile ways of working. Our clients were demanding ‘cheaper and faster’ as they began creating multiple forms of content for the huge number of new channels that had become available to them.

If we hadn’t found a way, our clients would have been forced elsewhere and the agency’s strategic and creative control would have been severely diminished and quality would have suffered.

I also believe that the opportunities to ‘make’ are more than ever. The internet is now 70 per cent video and you simply cannot argue that this has all been snatched up by in-house. These opportunities may be at lower margins but they offer a new generation a chance to skill-up. The key thing to do now is to optimise the opportunities and for us to keep quality at all price points of the market.

We need to embrace the changes and constraints and turn them into advantages – be they in opportunities to experiment with young or different types of talent, or in different ways of working, such as the collaborative approach enjoyed between Black Sheep Studios and Somesuch on our short film Home. Its recent BAFTA win was a first for an advertising agency, and should quash the quality naysayers and cynics.

Admittedly, the success of Black Sheep Studios lies in the fact that it has integrity as a stand-alone offering. It never competes with external production partners; it’s a creative function of the business and crucially has never been mandated internally.

The active choice allows us to try new ways of working and approach projects in different ways. Above all, it lives and dies by the work. Quality, as John Lasseter once said, “is the best business plan, period”. For Black Sheep Studios it has been at the root of its success.

In conclusion, it’s time we stopped bemoaning the end of the golden era. Together or alone, the opportunities are endless.”

Transparency above all else

Tina Fegent, marketing procurement consultant

“As a marketing procurement consultant, I always support clients having options for everything that they buy. I believe that an agency should have its own procurement process and get three quotes for any third-party expenditure. From what I understand these options have not been made very transparent to clients in the past; this needs to change.

The impact of these in-house production units on quality is a decision that all parties need to discuss and always be aware of. It is the old adage that you can only have two of cost, quality and time. Cost and time pressures will affect the quality of output but it may be appropriate to have a lesser quality for the output that the client requires. So, always have options and be transparent on what these options will deliver to the client.”

Do you cut your own hair?

James Bland, executive producer, Blink Productions London

“We’re not really that bothered by in-house production. It’s necessary for some brands to take some things in-house. Equally, for expedience and obvious business reasons, agencies are looking to do the production work themselves too. Creative results and effectiveness are what’s at stake.

I’d liken in-house production to cutting your own hair. While most won’t consider this, and will choose to go to a professional hair stylist, some will prefer the DIY approach and will try to do it themselves. After all, scissors are cheap, easy to use and readily available. No one knows what a person wants better than themselves. What you lose in independent perspective from an experienced, trained professional, you gain in ‘complete creative control’. ‘To hell with it!’ they say, and chop away.

Results may vary. Some will deeply regret the decision and head to the nearest salon for an expensive fix job, while others might feel that they pulled it off, while tactically avoiding mirrors.

I think there’s room for everything. And the good hair salons will continue to do well.”

Directors will always need a home

Spencer Dodd, MD, The Sweet Shop London

“Agencies and clients aren’t able to maintain a roster of directors themselves because of two factors: one, there’s a conflict of interest that exists if they are putting forward a director that they represent in a competitive pitch and, two, they can only offer work opportunities limited to the client base that they have.

As a result, they are dependent upon the freelance population of directors and loan outs from production companies that limits the options available to their clients.

As they are unable to maintain their own roster, they’re not interested in investing in and mentoring the long-term development of a director, with an eye on their future.

At The Sweet Shop, for example, our MDs and EPs support and nurture our directors as they grow and evolve. Because agency/client in-house production is limited in scope, that talent will seek production company representation when it feels it is able to, where it will be cherished, developed and mentored.

The best directors will continue to gravitate towards and be developed by companies that can offer them the best creative choice with opportunities to develop and the greatest financial reward.

As a result, the best directors will continue to gravitate towards production companies.”

This piece was first published on shots.net on 26 June, 2017.