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Filmmakers are
struggling with critical pressures today including significant cost inflation
in key areas of production. Cast, crew, studio space and fuel, flights and food
have all been affected Covid protocols and contingencies are also adding 5-10%
to budgets. Productions are writing inflation protection schemes into budgets
while working to raise money and secure behind-the-camera talent to get to
principal photography.
Crew shortages at
all levels are especially threatening to the sector. Following a decade of
extremely cheap and easy debt, the burden on producers has grown acute, and the
wage inflation associated with scarce talent has only worsened this situation.
The British Film
Institute (BFI) found that the speed and volume of demand for local production
has exacerbated the strain on the UK’s indie sector in particular. It cannot
compete with larger international productions from accommodating the rising
cost of production to signing cast and crew and ultimately to reaching
audiences.
Sohonet CEO Chuck
Parker explores how all these rising costs might be mitigated.
1) Remote
collaboration saves real money with tried and tested tools and workflows
The biggest and
arguably most immediate reduction productions can make is slashing the cost of
travel and accommodation, which has automatic benefits to sustainability
policies and can make a real impact on the estimated 30% cost to every
production.
Luckily, the tools
to enable remote editorial are battle-hardened and will only get better. Better
still, decisions about hybrid or entirely remote editorial are embedded into
discussions at the point key crafts board a project.
The benefits are
not all one way. Certain creatives (showrunners, directors) want their editor
close to set even during principal photography. Reading the room with all its
nuances in gesture and mood is something that remains tricky if not impossible
to replicate when video streaming. Post creatives are flexible and will do as
the job requires but the fact that choice is now part of the conversation gives
those who prefer to work where they want a better life balance.
So whilst remote
can definitively cut production cost it would be shortsighted it were not tied
in to workflows supporting in-person collaboration when possible.
2) Virtual
Production accelerates – but creates its own time and cost challenges
Significant savings
on travel and carbon footprint can be achieved using virtual production. Volume
stages are cropping up everywhere to satisfy demand to shoot locally – but
being booked out as soon as they launch as demand for space continues.
VP is also the
fastest developing area in our industry with technology, techniques and best
practices still emerging. While the crew tasks and skill sets required for a VP
shoot may differ to conventional production, the actual number of crew involved
may not, in its current phase, be markedly different.
Consequently, the
cost per day of shooting remains high. It may be one reason why several
high-profile productions that might have been ideal for VP shoots (HBO’s House
of the Dragon, Disney’s Andor, Amazon’s The Lord
of the Rings: The Rings of Power) have eschewed the volume for the
tactility of conventional location filming.
The current cost
and complexity of virtual production needs to improve for it to become the
first choice for production, with location shooting an aesthetic choice for
those with the highest budgets or most prestigious auteurs. However,
capacity and pricing are impacting the decisions as much as the changes in
pre-production required to be successful in this creative approach.
3) Cloud
workflow adoption remains hampered
The ability to push
raw original camera files (OCF) from set to cloud for instant access by
creative talent anywhere will bring sweeping benefits to production. True OCF
will condense time scales and thereby cut costs and, by collapsing the
traditional linear process, enable real-time geographically dispersed creative
collaboration. Sounds like Nirvana!
But the catch is we
are not there yet. Camera to cloud today is delivered as a proxy stream that
can speed editorial and shot reviews but only real OCF pushed from set to cloud
can revolutionise post. Even as workflows develop for OCF to be pushed in
near-time to cloud editorial, there are still cost challenges to tackle.
It is counterproductive as it stands today to put your rich data files in the
cloud when many of today’s workflows start by egressing the data to local post
operations and then uploading that data back to the cloud, resulting in
additional time and costs for production.
The migration to
public cloud workflows is the right direction of travel for the industry but
adoption is still slow. In particular, larger scale projects are finding
end-to-end cloud production problematic to manage on top of exorbitant
penalties for egress between cloud providers.
At issue here is
the continued lack of interoperability between major public cloud vendors.
Studios would like their productions to be able to hop seamlessly from provider
to provider, following the sun, taking advantage of economies of scale to
render creative vision across multiple cloud providers, but such workflows
remain stymied while cost effective interoperable data exchange is locked out.
4) AI / ML and
ChatGPT promise practical benefit and a radical future
Automating
workflows and jumpstarting the creative process using artificial intelligence/ machine
learning is fast entering the equation. It’s too late to be worried about
technology usurping jobs, and similar to other industries, AI/ML is more likely
to unlock use cases for volume that was previously not economical. AI/ML is
already in the wild all over our industry and we should be open to embracing
it, looking to redesign roles and workflows and to create with it.
Media companies are
adopting AI tools for everything from storyboarding in pre-production to
streamlining asset management and powering search and recommendation engines
for service subscribers. AI is already proficient at tackling time-consuming
tasks like de-noising, rotoscoping, and motion capture tracking removal.
Footage restoration, colourisation, categorisation, facial recognition,
metadata enhancement and integration are all areas that are likely to benefit
from AI/ML integration. Currently, the use of AI/ML in localization and
versioning is likely to yield the most cost-saving benefit for Studios.
Longer term, expect
generative AI text‑to‑image algorithms to evolve into text-to-video tools with
such fidelity that it is no longer inconceivable that entire feature films from
AI-generated script to audio performances with photoreal video will be made
entirely in a machine.
5)
Streamers cut their cloth to look like TV
The squeeze on cost
of living translates into constant cancellation or rotation of streaming
services and has caused major SVODs to rush to offer cheaper ad-supported
alternatives. The goal for most is to reduce churn and increase revenues to
sustain multi-billion-dollar content costs without decimating the existing
linear TV and cable subscriber base, while the hard-core streamers (Apple,
Amazon, Netflix) have no legacy revenue streams to protect.
Netflix expects to
have 7.7 million unique viewers for its Basic with Ads tier by the end of the
year after launching in a dozen markets. It also estimates that this tier could
generate $1.9 billion in ad revenues by 2027 in Western Europe alone.
Virtually everyone agrees Netflix’s ad play
will be successful. The question is whether getting into advertising changes a
company which has closely guarded its own data and prided itself on forging a
distinct path in the cutthroat world of entertainment.
It’s not just a
Netflix dilemma though. Fundamentally the shift from pure SVOD into ads brings
streaming TV closer to broadcast TV models. The popularity of linear free
ad-supported TV (FAST) channels is another move in this direction as is the
shift from fragmentation into aggregation. Consumers, for reasons of cost and
convenience, seem to prefer one place to access live sports, music, gaming and
news alongside premium TV and film
While Netflix has
bolstered its gaming division, it is tech giants like Apple and Amazon as well
as the muscle of Disney and Warner Brothers Discovery, which are jostling to
bundle an array of digital entertainment in one place. The major difference
between broadcast and streaming remains interactivity. Expect applications
utilising ultra-low latency at the network edge such as gaming and Virtual
reality to begin to take-off from 2023.
As the industry
moves past the pandemic, charts the course of the return to the cinema, and
fights for the hearts and eyes of audiences, the challenges facing
entertainment companies are not just to thrive but, in some cases, to survive.
While the domestic box office in 2022 is expected to land around $7.8 billion
and up from 2021, it’s still 35% less than 2019. The economic impact of WFH may
not be the overall solution, but it does offer creative and financial
opportunities that will play a critical role in the delivery of content.
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