TVC COMPANIES POSITIVE ABOUT FUTURE

Times are tough, sure, but the global economic downturn has merely exacerbated pressures the TVC production industry is under to adapt to changing market conditions, say leading New Zealand producers.

Mike Watkins (pictured above right), general manager of Film Construction, which has offices in Auckland, Sydney and Melbourne, says plenty of scripts are coming through and shoots are still going ahead, however, it’s become a lot more competitive.

“There are jobs where you might have traditionally had one or two people quoting on, there’s now three or four,” says Watkins. “As a company we are holding up pretty well. I know some are struggling, but so far we haven’t noticed it too much which is bloody fortunate.”

While clients are redistributing some funds to areas like direct marketing and re-using some of their old executions, he’s confident clients will continue to see that it’s particularly important to advertise during a recession.

“Most of the agencies we deal with are pretty positive. It’s as positive in NZ as it is in Australia. There’s more opportunities at the lower end of the market at the moment then there are at the massive budget end, but there’s still a lot of big campaigns out there that are being shot.”

It’s also a good time for overseas productions to shoot in New Zealand because of cost efficiencies and Film Construction is tapping into its international network to entice jobs to New Zealand. The main competition is South America and South Africa.

Paul Prince (pictured above left), managing partner/CEO, of The Sweet Shop, says its business model of having offices in Auckland, London, New York, LA, Chicago and Shanghai, is paying dividends during the economic downturn because they are being approached by agencies in the UK and US to shoot in cheaper markets such as New Zealand and Australia.

The credit crunch is also making agencies play hardball with production companies. Talk of Omnicom, for example, limiting its exposure to debt by enforcing sequential liability language in production companies – which means if agencies are not liable for production payment unless they have been paid and they will no longer pay for productions upfront – is making production companies nervous. The proposal was overturned in the UK following pressure from production agencies via industry bodies, the IPA and the APA.

“It’s innovation really, and it’s being resisted by bodies like the AICP in the States and the ICA in the UK. It’s too early to determine the outcome but you can derive from it that it’s market forces at work,” says Prince.

However, several high profile production companies in Australia say agencies are already putting pressure on them to cover upfront costs – one says two agencies have approached them to fund a production and another says they the day before a shoot, they were told the client couldn’t pay them until May.

“They accepted our terms without any question and we’ve been asking for the money for a week or so. We are shooting tomorrow, then yesterday morning they tell us they can’t pay for it,” they said.