Is Hogarth a threat to Australia’s commercial production companies? Is this another Plush? One production company EP fears the worst
In response to the launch by WPP AUNZ of Hogarth Australia last week, one independent Australian production company producer, who wishes to remain anonymous, has emailed this response, fearing Hogarth could be another Plush.
Along with the launch of Publicis’ Prodigious, which is currently being ramped up in Australia, I believe Hogarth Australia could be a threat to creativity in Australia. There are far reaching ramifications of this model that fall into two categories. Obviously Plush didn’t work, but the general feeling is that this time, they are here to stay.
Category one: In the US and Europe there are numerous examples of internal production companies of agencies a) asking external production companies to submit a high bid so that they internally can submit a lower bid for the same project thereby showing their client why it’s better to go with them, and b) receiving external directors’ treatments, and then using that IP as ‘inside information’ to make their own proposal look better to their clients – using that IP that is not theirs. Let’s hope that is never the case in Australia.
The second category is one that is less obvious. Traditionally, good production companies have taken on young wannabe directors, and financed the beginnings of their careers, by underwriting low / no budget jobs from agencies and teaching / coaching these young directors, helping them develop and seeking out opportunities to develop their reel. Over time, these directors develop their craft, learn, grow and become better directors in the market.
With internal companies however, they use young directors who are cheap, in a race to the bottom of budgets, and have no care or responsibility to that director’s career and development (like a good production company would have). The internal company has no vested interest in creativity, just in how much they can double dip from their clients, under the guise of being able to do it faster, cheaper etc.
I know of some examples where some reputable TV departments within agencies in a network have been mandated to get a ‘bid’ from their internal production company, as one of the standard three bid process. The internal company has not been able to do it cheaper, nor provide a quality director. The reason they have not been able to do it cheaper is that good production companies have relationships with suppliers who they treat well, respect, and honour those relationships – supporting each other and the industry. So when a favour is needed – on a low budget job for example – it can be given. This is not the same obviously for a network’s internal production company.
I also know of a major multinational – one of the biggest FMCG groups globally, that are completely against the idea of their agency’s internal production company and refuse to use it on account of feeling that they are not getting market rates, nor access to the best directors – which are fundamentally tied up with good production companies.
Creatives hate the idea and generally want to have nothing to do it as 99.9% of the freelance directors aren’t that great – the good ones are snapped up by production companies. Creatives hate it. Agency TV producers hate it.
I believe the local Aussie production body, the Commercial Producers Council (CPC) has been discussing it and is preparing to release guidelines around dealing with internal production companies.
But what I think is really pertinent at this point is that the CPC is run by The Communications Council. The board of directors of The Communications Council has CEOs, CFOs of these network agencies who have inhouse production – so there is an absolute conflict of interest with the Comms Councils running the production body!!
11 Comments
Good to see someone is willing to speak out!!
http://adage.com/article/agency-news/justice-department-investigating-agencies-production/307049/
The CPC was flawed as soon it was put under the Communications Council umbrella.
It has achieved very little – and the so called EP’s who sit around the CPC table must, after 5 years, acknowledge that a lot of fees have been paid with no clear result.
All we can do is watch on in horror!
Like WITH’s new production arm? Look at the shocking death of craft coming out of there? Those latest commercials are like film school kids projects.
Clients, vote with your dollars! You don’t get better deals, the agency is pocketing your money and giving you an inferior product.
The CPC is the right body to regulate this. As it is a division of the Comms Council, it is better positioned than SPA, who deal mostly with features and TV.
It is not possible for an internal company to pitch competitively against an external one when there is the potential for increased financial reward. This is clear and has been the backbone of the Department of Justice investigation in the USA.
Provided these new companies are sold to clients as part of a package of services which are not required to be pitched out, then I don’t see any issue with them.
I do believe that internal companies offer younger people opportunity and that is a good thing for the business. Steve Miller, Christopher Riggert, Gary Freedman, and Dougal WIlson all started directing while inside agencies. Watch this space.
The is NO or little respect for the true craft of producers and Directors these days, It’s very insulting to think that you can take ownership and buy true talent. It’s a CEO, middle weight, brown pants driven industry these days and all about the back pocket. It can’t sustain itself for much longer as its much easier to be a bully with dollars than a true creative.. go F yourself.
At this point agency will do ANYTHING to sustain revenue it’s a dying business model. They are being screwed by their clients and management consultancy firms are doing a better job with better people. When everyone is freelance why would a Client use an agency when they can get great people in their office for a 1/3 of the price per hour??? My production company now earns 60% of it’s revenue direct to client. The CPC is a joke at least SPA has some bulls. The CPC is in such a compromised position, don’t waste your precious $$$ to protecting agencies.
This is more of a threat to the production company structure than directors’ careers. But in as much it’s a threat to creativity and the quality of work produced.
If this model grows, then most directors will have no choice but to go freelance and offer their services to all the in-house agency prod cos out there. This means they’ll be working for less money with staff they don’t know. No creative shorthand. And as mentioned above, the drive of agency in-house prod cos is creating for as little $$$ as possible, not the final output.
The majority of prod cos will be decimated. They simply won’t be able to compete in a very skewed market. The best of the best and those creating niche work will survive, they’ll still get the best jobs. But those prod cos occupying the middle ground will find it very hard to keep the doors open.
It is not written in stone that the world owes tvc production companies a future.
In fact, Ad agencies adding production services / capabilities to their offering seems completely logical.
Ad agencies with production resources are no different to post companies, media companies, in fact any company offering that same ability to produce films work for a client.
There is no mystery to it…and the notion of keeping directors under exclusive arrangements will look really out of date very soon – as will directors demanding 15k to 20k per shoot day. Sure there are some exceptions to that…but in the whole 85% of work generated in Australia really could be done by the same prod co / director and no-one would know.
As someone mentioned, if the clients know what is going on with their content production then who can complain.
Probably better that prod co’s start thinking about what the next 10 years will look like as the gravy train which has been slowly grinding its way to a halt over the last decade is rounding the final bend.
I’m not sure Clients will put up with this many of them are really quite smart. My agency does in house stuff with poor directors and more often than not we make very average content. However we do milk in 50% markup. There are content companies marketing to our clients and they make better work for a cheaper price without all the head hours we charge. i wish we could go back to the old days but feels like everyone is out for what they can get. How can you bid against other companies? That is bid rigging.
Thanks for this. I have seen the commercial production world suffer at the hands and advertising agencies. The absolute waste. Mediocre work and squeezing the life out of creative and intelligent work.
I got into commercials because I enjoyed the process and the unique challenges. Agency afraid to even have an opinion about what they are trying to achieve. Everything fear based.