Market Environment

LONG FORM
CONTENT PRODUCTION
STILLSOTHER CONTENT
PRODUCTION TRENDS

Over the last five years, the rise of digital and social media has caused many new trends to emerge when it comes to content production. However, whilst many predictions about the future of this industry and technology are beginning to materialise, there have also been surprising developments.

Technology and the proliferation of media have also given rise to increased awareness of sustainability and human emotion. What’s more, spending in the commercial world is on the up and the production business is experiencing an optimistic upturn – perhaps the first markedly stable rise since the recession.

This report will take a look at changing consumption habits and how they might offer opportunities in content production for commercial and non-commercial film and stills.

Longform
content production

The Programming Arms Race Continues

Our 2016 trends report investigated this topic. 2016 saw a call to arms for the top SVOD (Subscription-based-Video-On-Demand) services whose competing commissioning budgets sparked huge growth in the market.

Amazon doubled its video content spending from mid-2016 to mid-2017.

These budgets continue to rise in 2017, as consumers push for more engaging content that contains no advertising or interruptions. Amazon doubled its video content spending from mid-2016 to mid-2017, and Business Insider reported the online retailer and commissioner spent an estimated $4.5 billion on video content last year, including about $300 million for content targeted toward India. Many expect this number to grow in 2018. In comparison, Netflix reportedly planned to spend between $7.5 billion and $8 billion in 2017 on a profit-and-loss basis. As a result of this spend, Netflix continues to reign champion in the market reaching over 100 million subscribers. This is more than double that of rival Amazon, who reached 44 million, this year. However, IHS Markit noted in a recent report that Amazon could close the gap in coming years, as they already have an advantage in select markets worldwide – namely Germany, India, and Japan.

Netflix’s global streaming subscribers, as of June 30 2017

Amazon Prime Video and Netflix subscribers per region

Business Insider explained that whilst both Netflix and Amazon operate on a profit-and-loss basis, Amazon’s huge retail business should find it easier to absorb the losses which will help them to close the subscriber gap.

It is our place to understand how consumers are reacting to these changing budgets.

Much like last year, the rising SVOD commissioning budgets also see traditional broadcasters up production budgets in a bid to compete with their online rivals. As a content production house, it is our place to understand how consumers are reacting to these changing budgets; what is driving their behaviour and, ultimately, the commissioning demand.

Commissioners on the Rise

As a result of increased SVOD and broadcaster spending, the number of commissioners is also rising, particularly as brands begin to enter the space. Traditionally, TV, radio and cinema were where these job roles existed. Now brands have started to create in-house commissioner roles in a bid to create content their consumers won’t want to switch off from.

Red Bull and Lego are two great examples of brands who have blurred the lines between entertainment and commercial. Many brands are looking to do the same, from banks and real estate companies to fashion and food retailers. This influx of commissioners is driving increased spending in production.

Stills

Over the past few years, the print world has been feeling the pinch. A number of iconic magazines and publications closed their presses in 2017. Glamour, once the tenth biggest selling magazine in the UK, stopped printing this year in favour of a digital edition. Iconic music magazine, NME also called an end to its print edition and prominent editors at Vanity Fair, Time, Elle and Rolling Stone also stepped down from long term roles at the magazines. Where audiences are able to find and consume free-to-view content online, ad spend in print has taken another decline, despite a general rise in ad spend globally.

Growth in Global Advertising spend by media 2016-2018 (% year-on-year)

Social media has been a huge driver in the stills market, particularly as smartphone camera improves alongside them.

Whilst this could appear negative for the stills market, there are actually several reasons this medium is still on the up. Social and digital media have been a huge driver in the stills market, particularly as smartphone camera technology improves alongside them. Many consumers are able to take high quality photos and edit them to a professional standard, whenever and wherever they are. InfoTrends estimated that over 1.1 trillion photos were taken in 2016 and that this number would rise to 1.4 trillion by 2020.

This photography boom has caused a shift in the way we experience images and the world. We begin to expect to see high quality images and people have become disinterested in those that don’t capture their attention. As people now have the power to curate what they see, the demand for high quality stills, in breath-taking locations, is sky-high.

We have always experienced a consistent demand for high quality stills from the fashion and cosmetics industries but we have noticed a notable uptick in the need for still digital content on almost every project that comes through our doors.

Another interesting development in the stills market is the rise in the number of digital catalogues being shot. As retailers sell more online, there is increased demand for high-quality photos of their listed items. It is imperative items and products appear in their photographs online, exactly how they would appear in real life. Competition is strong and without a representative image, consumers can lose brand trust and shop elsewhere.

It is important as a stills and motion content provider that we are not only aware of this demand but how to technically service it.

Other content
production trends

Shooting Micro Films

In the same way that smart phones and social media have caused a shift in photography trends, they have also sparked a new type of content, the micro film. As Facebook and Instagram push hard on their seven-second long content streams, urging people to share short films, brands and filmmakers have jumped on the chance to fill the space in creative ways.

Again, quality is key when it comes to these films. As many advertisers have become acutely aware, there are only so many seconds people will watch their video – 5.7 according to Facebook.

However, when budgets are squeezing, it’s important to know how to shoot something so short without compromising on quality. We have seen a sharp rise in demand for this type of content at Palma Pictures; knowing what is cost effective and essential to these shoots are key to their success. As the world is filled with more and more video, it seems likely this format will be a staple in coming years – a potentially lucrative one for the savvy advertiser.

A Man’s World?

Typically, women have been under represented in film production, more so than any other area of the industry. Female directors, assistant directors and technical crew were rare but the imbalance is finally beginning to shift.

More education and empowerment about gender diversity is sparking long-awaited changes in this industry. Not only are people calling for a new perspective in film but for a new way to define roles in film production.

Whilst we are fortunate at Palma Pictures to work somewhere where all female crews are not uncommon, that can’t be said across the board. One of the major pieces of news fuelling change in how this industry operates, was the shocking revelation that 2017 marked the first year a woman has ever been nominated for cinematography at the Academy Awards.

Despite being long overdue, Rachel Morrison’s nomination for her work on the Netflix film, Mudbound shone a spotlight on the fact that this incredible film was actually shot with an all-female BTL crew. Whilst this should be considered a norm, rather than a talking point, it is encouraging to see increasing numbers of high-profile projects utilising female filmmaking talent and encouraging others to consider this career path.

It is important for anyone working in the film business today to be taking steps to make sure the film industry is an accessible career option for women and other minority groups.

Producer-led Content 

When it comes to commercials and short form content, there has been a rift of new model companies emerging formed of ex-senior agency producers and Heads of TV. There is a rising demand for production consultancy and experience is highly valued on large commercial film projects – particularly as brands begin to take more production duties in-house.

Talented producers have always been the cornerstone of production and production service but as content channels proliferate, producers have to be able to ensure shoots are adaptable. In today’s age most commercials aren’t just created for a single channel, they often must fulfil several different formats and different methods of consumption. What works for one channel, doesn’t necessarily work for another. Directing talent is always highly valued but, in commercials, we see a trend forming in which producers become king. Unrivalled knowledge of how to create content that works across several channels has become invaluable, as experience in all of these fields is rare.

As the industry moves forward, good producers will help steer the ship in the right direction.

Live Streaming

When live streaming services like Facebook Live and Periscope launched in 2015, many were unsure whether they would be a temporal fad. Two years later, live streaming now dominates social media – especially for millennials who are consuming more online live content than any other generation.

Many are reporting huge opportunity for advertisers in this space. According to The Huffington Post, live streaming accounted for 75% of all internet traffic in 2017. Viewers also reportedly spend 3x longer watching this content than any other online video – a huge increase on the 5.7 seconds people typically spend watching ads.

This hasn’t gone amiss by brands, of course, but what is interesting is how the line between commercial and broadcast begins to blur. If this trend continues to grow, there will be a huge rise in demand for live broadcast production. As a content producer, we must be able to adapt to the changes in commercial production and allow our skills across broadcast, stills and motion to crossover and combine in this area.