Broadcast
As almost a fifth of post producers tell Broadcast they plan to outsource work abroad this year, Indian businesses are eyeing up Soho facilities to lure work back home.
A growing number of UK post producers are set to export their business models abroad in the coming year as the internationalisation of the sector gathers pace. Nearly a fifth of respondents to a Broadcast survey plan to outsource portions of work offshore, while Soho's finest are being eyed by foreign investors as they swap ownership in the manner of Premier League football teams.
Setting up shop in the US has become de rigueur among top commercials houses. The Mill led the way into New York in 2002 (it now has 100 staff and an LA arm), followed by Smoke & Mirrors and Framestore CFC. Final Cut runs NY and LA wings and Absolute opened New York suites last summer. The strong pound means Manhattan real estate is very attractive to facilities used to shelling out for W1 rents.
“We have no plan for global domin-ation,” says Absolute owner Dave Smith, who hired a Flame for ad hoc work in New York and plans to double its two Flames to take on larger projects. “It was a safe way to grow business because there were -clients asking us to be there,” he says.
For commercials houses that aim to service executives' every whim, it makes sense to locate to agency hubs. They also trade on the brand values of British talent - seen as superior to their US counterparts.
The first broadcast facility to move across the pond has done so for largely the same reasons. “A number of our clients have set up in the US [Leopard, Tiger Aspect and Lion Productions among them], either to pitch to US networks or to produce versions of their own properties,” says Evolutions managing director Simon Kanjee. “There's a hunger for British creativity and producers were telling us it would be nice to work with us over there and have the same level of service they receive from Evolutions London.”
Evolutions' Broadway office was first hired to post Tiger Aspect's Make Me a Supermodel but Kanjee says the move is permanent. “Soho offers very proactive client management, which doesn't happen to the same degree in the States,” he says. “We operate a runner system. They don't. We know all our clients' first names. They don't. There's a clock-watching mentality in some sections of US post, which isn't how we work. British operators have a reputation for craft skills, whereas US talent can be harder to find.”
The big difference between satellites servicing commercials and those catering for broadcast is in the value to be had from shuttling work between offices. Because the work requires specialist compositing or CG, commercials houses can zip mater-ial to and fro, maximise overlaps in time zones and produce round the clock. Excess work can be soaked up by other sites.
But where commercials houses can set up outposts around one suite and a star oper-ator, the economics of broadcast require a greater investment in space and kit.
“Very little editing, audio mixing or grading can be done without the client in attendance, especially on quick turn-around broadcast projects,” says Kanjee. “Moving work further afield is inappropriate when producers need to be hands-on.”
For this reason, he doubts whether there's any gain to be made from working regularly with Indian companies. “They wouldn't make any money from broadcast,” he says. Darlow Smithson head of production Ulla Streib adds: “We wouldn't outsource most post processes because it still depends on someone attending a grade or mix. But we would farm out music composition and CGI and are actively looking for facilities in Singapore [where DSP has a new office].”
The economics of taking mechanical aspects such as matting and wire removal abroad stack up. Feature film VFX and animation (and TV animation) have been outsourced to eastern Europe, Ireland and India for decades. Tiger Aspect's Robin Hood is partly posted in Romania for example. What's new is that Indian facilities wielding hefty purses are courting every facility in town with the aim of setting up London shop fronts to entice work back home, where overheads can be over 70% less.
Kanjee, who recently went on a government-organised UK trade mission to Mumbai, notes the huge market for Indian firms to tap into in the West: “Their sole objective is to get work back to India, where they can make 50% margins.”
Prime Focus London regularly farms VFX shots to India. Mumbai-based Pixion, a subsidiary of Century Communication, India's largest facility, bought VFX boutique Men from Mars with the same aim and is scouting for further acquisitions.
Skillset facilities manager Triston Wallace also went on the Mumbai trip. Blogging during the visit, he said: “Indian corporations look for ‘trophies' to demonstrate wealth and power - a Soho facility would give them the required cachet.”
The main obstacle to working with Indian facilities is a lack of project management and professional training. Smith and Shenfield have been deterred from outsourcing work to the subcon-tinent unless client confidence can be guaranteed. “There are huge quality -control issues,” says Shenfield.
Indian firms know this. A key reason for owning a London or US base is to project-manage work outsourced from there.
The US and India aren't the only outlets for UK post. Twelve respondents to Broadcast's survey plan to open overseas in 2008, in locations as diverse as Dubai, Toronto and Poland. The Mill is “in active research mode”, says Shenfield, while Smoke & Mirrors may follow Golden Square into Shanghai.
“We knew [Shanghai] would be tough, but it has been even more difficult than we thought,” says Golden Square managing director Philippa Gillies.
“The market is immature and we're mostly posting content for mobile or web. But the nearest professional post facilities are Hong Kong or Australia so the opportunity remains a good one.”
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