2015 Review: post-production round-up

Broadcast 

Post houses were in positive mood, with many taking on additional space, while consolidation continued in the VFX sector and the DPP set out its roadmap. http://www.broadcastnow.co.uk/features/2015-review-post-production-round-up/5097824.article?blocktitle=2015-Review&contentID=44199

FACILITY GROWTH

The post community suffered fewer casualties than usual this year. One of the few facilities to get into difficulties was VTR North, which was sold in a pre-pack administration deal in November.

Signs of increased confidence in the sector could be read in the dramatic expansion at a number of broadcast facilities, although as UK Screen chief executive Sarah Mackey points out: “It’s not clear whether this is indicative of an industry in rude health, of one polarising between extremes, or of a zero-sum game.”

The Farm’s decision to exit Soho Square, its home since opening in 1998, was prompted by the landlord’s desire for redevelopment, but it gave the group a chance to relocate its headquarters into a space more than four times larger.

The 60-suite Newman Street building opens in January and will be linked to The Farm’s three other Soho facilities, plus operations in Manchester, Bristol and LA.

In September, Evolutions opened a £2m, 30-suite facility in Berwick Street to cater for overspill from its Sheraton Street and Great Pulteney Street sites, while Halo launched a 4K finishing facility opposite its Noel Street base, its fifth site in central London.

The summer also saw Manchester’s Flix move into a new £1m post operation at MediaCityUK, its second in Salford and fourth in the Manchester area.

Envy added real estate in the form of a Baselight, 15 offlines, a new studio and a Symphony, in part to post close-to-air Gogglebox. It is prepping the launch of another building, the firm’s sixth, into which it will move shortform work by June 2016.

DPP DIGITAL ROADMAP

Having devised and supervised implementation of a common file delivery standard in October 2014, the Digital Production Partnership (DPP) became a fee-paying organisation.

The controversial proposal was greeted with anger from some facilities, which complained that they had already borne the brunt of technological risk and provided valuable input to get the DPP’s scheme working. Many were also worried that a new DPP business model might confer competitive advantage to paying ‘partners’.

The DPP quickly dropped a proposal to introduce certification for post firms, but became a limited company and pressed ahead with charges, which vary from £1,000 to £4,000, depending on a facility’s turnover. By the end of November, it had enticed 48 paying members, but only six post firms.

“We have more paying members than anticipated by this stage,” says DPP managing director Mark Harrison. “The aim is to create a community that can sustain itself. The primary benefit is that a member gets to be part of an organisation that is gathering insight and shaping change into how we can create opportunities around digital production and distribution.”

The DPP’s 2016 roadmap includes a UHD standard deliverable; work with the European Broadcasting Union (EBU) on a common international programme mastering format; and, most intriguingly, exploration of internet-based production and distribution tools.

“We feel we are entering the biggest moment of potential change in how programmes are made for a decade,” says Harrison. “Production, even of high-profile, long-form programming, might involve web-based editing, cloud storage and finishing sourced from non-geo-specific services that might be identified and bought through a Go Compare-style web portal. The question is how far away this is.”

VFX CONSOLIDATION

Several facilities changed hands this year. Prime Focus UK re-emerged as Blue 2.0 in May and Molinare captured audio boutique Hackenbacker in July. But the biggest deal by some margin was Technicolor’s £190m swoop for The Mill.

Robin Shenfield co-founded the VFX house in 1990 and remains as chief executive, overseeing 800 employees across London, New York, Los Angeles and Chicago.

“Brands and advertisers are moving towards storytelling, whether that’s linear, directly through film or TV, or in segmented short moments,” says Tim Sarnoff, The Mill’s president, production services.

He points to virtual reality as a key market into which The Mill’s creative talent plays. “Everyone is underestimating how big VR is going to be,” he says. “And everyone is overestimating the speed at which it will happen. If you invest heavily in VR expecting a return tomorrow, you will be disappointed. But there is no scenario in which VR isn’t going to become a primary business line.”

Technicolor already owns London VFX studio MPC, Mr. X in Toronto and Mikros Image in Paris, and has the economy of scale it believes necessary to survive in VFX. It is not alone: in 2014, Double Negative merged with the VFX division of Prime Focus, and in July this year, Cinesite added Vancouver’s Image Engine, contributor of VFX for Jurassic World, to the CG feature animation facility it recently opened in Montreal, bringing 525 artists under one roof.

“A number of VFX facilities have not run their business well,” says Sarnoff of the pressures forcing this consolidation. “They have fooled people into thinking that they can produce good work at less than cost, and it squeezes those of us who know that you can’t make good work or maintain a healthy business by slashing budgets. Our philosophy is to create the highest-quality content in film, animation, TV and commercials – and we believe that comes with a premium.”

BBC CHARTER REVIEW: THE IMPACT ON POST

The impact of Charter Review on the BBC was the focus of attention at the Edinburgh International Television Festival in August and the RTS Cambridge Convention in September. It was left to UK Screen to register the potential longer-term impact of the process on the postproduction sector.

The facilities trade body took up the cause, responding to the Department for Culture, Media and Sport and BBC Trust consultations in October, and arguing that the estimated 10% reduction in BBC funding would “hit facilities very hard”.

Reduced spending

It calculated that this could result in an annual £35m reduction in spend on post – equivalent to the total annual income of 10-15 boutique facilities. It also highlighted that post-production companies operate on very tight margins, while at the same time taking on significant risk in terms of investment in technology and skills development.

“For us, there has to be some element of ring-fencing around programme spend,” says UK Screen chief executive Sarah Mackey. “It’s not just a case of salami-slicing 10%; it’s the impact on post within individual programme budgets as well. For post, there’s a real risk that the actual cost burden will be higher.”

UK Screen’s submission to the DCMS claimed the cuts risked “causing instability in the sector as companies fail and jobs are lost”.

It also voiced concerns about the lack of detail currently available on the BBC’s plans for its commercial production business BBC Studios.

“There needs to be far greater consultation and transparency over this with all sectors, not just production,” says Mackey, citing the BBC’s in-house factual village and regional quotas as past examples of where the impact on independent post was examined only retrospectively.

“I don’t want to see more ‘inadvertent consequences’ resulting from a lack of any meaningful market impact assessment.”

Envy, which is not a UK Screen member, is less concerned. “If the cuts hit factual and light entertainment shows, that’s a worry, but I don’t believe the headline shows will be affected,” says managing director Dave Cadle.