Market Environment

Introduction

Over the last few years, the film, television and photo industries have witnessed major changes in areas such as consumer demands, the role of traditional television commercials and streaming opportunities. As service providers, we place great importance on keeping ourselves informed about the developments across our three industries in order to ensure that we deliver the best possible results to our clients. Not surprisingly perhaps, online advertising has continued to grow during 2019, especially with regards to the targeting of younger audiences, and companies are combining traditional television commercials with online marketing on social media. We have also seen a shift in power amongst the big marketing agencies as it has become increasingly popular to create one’s own in-house agency. Additionally, the fight for gender equality in advertisements have taken a big step forward as commercials centred around traditional gender stereotypes are now banned in the United Kingdom as of June 2019, and there has been a massive improvement in the film industry’s contribution to sustainability. These are the main points that this report will reflect on in more detail.

The Growth of Online Advertising

The global growth in adspend has been driven forward as of late by the increased interest in online video advertising and paid search as companies want to be more precise in their targeting and ensure that they only reach the relevant audience. The key feature in this new advertising strategy is personalised messages, which is made possible by the implementation of artificial intelligence techniques and improved location targeting. Online video advertising is expected to grow at twice the rate of other internet displays and take centre stage in advertising (1). However, that does not signify that companies are no longer interested in producing television commercials. Quite often, companies will combine online video advertising with traditional television commercials in order to gain a broader reach whilst still optimising exposure to the product. This new strategy has resulted in an increased adspend in display media, rising from 46.2% in 2012 to 48.4% in 2019 (2). It is expected to continue growing at the expense of print advertising, which is forecasted to continue its loss of market share. Zenith predicts that newspapers and magazines will have an average annual shrink rate of 4% and 6% respectively to 2021 (3).


1 ‘Personal and targeted communication is driving ad growth’. Zenith.05.03.2019.
2 Ibid.
3 Ibid.

A Shift of Power Amongst the Agencies

Another interesting consequence that the shift towards online based advertising has had on the industry is a change of power when it comes to the big marketing agencies. As companies are focusing less on traditional television advertising, many are choosing to spend their money in-house rather than hire an external agency. ‘The simpler, the better’, is the current philosophy and a strong emphasis has been put on the creative aspect of advertising. Advertising on platforms like Facebook and Google is often less expensive than buying a commercial slot on television, and that is why many companies have reviewed their advertising strategies in favour of the former. Agencies have thus been put under pressure to deliver results quicker and better, which has also led to independent full service companies rising in popularity since there are fewer middle hands which could cause delay. At Palma Pictures, we pride ourselves on our ability to provide a range of services, and we believe we are in line with the direction in which the industry is moving (4).


4 Bennet, Lindsay. ‘The challenges of the changing agency model’. AdNews. 27.02.2019

Gender Equality in Automobile Commercials

While we have seen wonderful progress in many areas in terms of gender equality and inspiring more women to enter the industry, one sector has remained unmodernised for a long time. This refers to car advertisements, where top car brands have for many years mainly targeted male customers, leaving women highly underrepresented in their commercials. In fact, a study carried out by goodrebel.com in the United Kingdom in 2017 showed that 56% of women felt patronised by car advertising (5). However, as of recent, car brands have begun to alter their approach to advertising to appeal to a wider audience which includes women. This can be seen in campaigns such as Jaguar’s ‘Bend the rules’ and Mercedes’ series of short films centred around automobile pioneer Bertha Benz. While the change has been especially noticeable in car advertising, it does not stop there. As of June 2019, advertisements that include harmful gender stereotypes, both for men and women, are banned in the United Kingdom (6). This is a great way for the advertising industry to play their part in moving towards a more gender equal society.


5 ‘Automotive and women: Mad Maxine Study’. Good Rebels. 03.09.2019
6 ‘Ban on harmful gender stereotypes in ads comes into force’. asa.org.uk. 14.06.2019

The Continued Growth of SVOD

As forecasted in previous years, the SVOD market has continued to grow steadily as people are becoming accustomed to having entertainment available at any time that suits them, rather than having to fit their schedule around the television broadcasting timetable. A report by Ofcom, a British telecom operator, reveals that in ten of the most high-consuming countries, 20% of people’s time was spent on streaming services during the first quarter of 2019, a big increase from 13% in 2017 (7). In terms of market share, the USA has overtaken China as the main player in the SVOD sector, due in large part to the success of Disney+, which was made available to the public only a couple of weeks after the launch of Apple TV+ in November 2019. The sector is expected to receive yet another boost in the spring of 2020 when HBO Max is due to enter the market and launch their own streaming service (8). We can thus see that the number of large streaming services is increasing rapidly and the statistics show that a large quantity of consumers now have paid subscriptions to more than one SVOD.


7 Warner, Joshua. ‘Streaming wars: will Netflix, Amazon, Disney or Apple come out on top?’. IG. 21.11.2019
8 Global SVOD Platform Forecasts Report 2019-2025 with Profiles of Netflix, Amazon Prime Video, Disney+, Apple TV+, HBO Max, Peacock and ViacomCBS – ResearchAndMarkets.com’. BusinessWire. 14.11.2019

Eco-friendly Film Production

Consideration for the environment and attempts to minimise one’s carbon footsteps on the planet is undoubtedly one of the most frequently recurring themes in media nowadays. Everyone is encouraged to recycle and to think twice before purchasing single-use plastic, and this is something which lies at the heart of Palma Pictures’ values as well. As an example, we now only use reusable water bottles on set and have over the last three years reduced our plastic bottle consumption by 63%. We are very happy to observe that this environmental consciousness is spreading rapidly across the industry and that big eco-friendly shoots are becoming more and more common. The film industry is one which requires large quantities of resources, much of which are purchased and then thrown away upon the completion of the project. According to Cause Artist, the audiovisual industry in London alone releases the same amount of carbon dioxide into the atmosphere as a city with 20’000 inhabitants (9).

However, the growing awareness of sustainability issues along with various government regulations and suggestions have resulted in an increase in so-called ‘green filming’. In the city of New York, for example, production companies wishing to film on the streets are required to implement a set of sustainability measures, and are given department specific guidelines which include tips like renting or recycling costumes and not using toxic paint. As a further step, they are now providing sustainably shot films with a seal of approval, which may be used as part of the marketing and promotion campaign.

On a local level, Promálaga is eager to implement the guidelines of ‘green filming’ in Spain and has consequently created a carbon footprint calculator intended to measure the emissions in the filming industry. We support and encourage this new awareness in the film industry and we are intent upon contributing to this positive development.


9 Sáez, Cristina. ‘Eco-Friendly Practices in the Film Industry’. CCCBLab. 28.01.2019

Conclusion

In conclusion, it is certainly fair to say that the industries are developing rapidly and we at Palma Pictures are excited to grow with them.


Reference List:
‘Automotive and women: Mad Maxine Study’. Good Rebels. 03.09.2019

‘Ban on harmful gender stereotypes in ads comes into force’. asa.org.uk. 14.06.2019

Bennet, Lindsay. ‘The challenges of the changing agency model’. AdNews. 27.02.2019

‘Global SVOD Platform Forecasts Report 2019-2025 with Profiles of Netflix, Amazon Prime Video, Disney+, Apple TV+, HBO Max, Peacock and ViacomCBS – ResearchAndMarkets.com’. BusinessWire. 14.11.2019

‘Personal and targeted communication is driving ad growth’. Zenith. 05.03.2019

Sáez, Cristina. ‘Eco-Friendly Practices in the Film Industry’. CCCBLab. 28.01.2019

Warner, Joshua. ‘Streaming wars: will Netflix, Amazon, Disney or Apple come out on top?’. IG. 21.11.2019