Decoupling
By Hannah Bentley
Decoupling is the term given to a process that allows clients to take more control of their production spend. Traditionally creative agencies spend on average 80% of the client’s budget on their behalf. With good reason, many would say, as the choice of suppliers is dependent on the creative requirements of the brief and the brand rather than any cost cutting procurement deals. Like many things though the market is changing and in the current financial climate, although not solely because of it, clients are increasingly looking for ways to save money.
Print production decoupling has been working effectively for many years now. Clients have deals in place with retouchers and repro houses and the agency retains the ability to recommend largely freelance photographers and keep creative control. Decoupling in the TV production marketplace is more complicated. This is due to a number of factors but largely because of the infrastructure of the marketplace and its resistance to change. TV production as an industry has been organised in the same way for decades and for a supposedly creative industry there seems to be a remarkable lack of creativity when it comes to responding to changing needs. On the one hand this is entirely understandable as TV production companies have expensive overheads and in a recession more people are chasing less work. On the other, with more and more production companies married to the roster of directors, rep and 20% mark up system beginning to close ,it is bizarre. Decoupling is still perceived as a threat to the status quo rather than an opportunity to make money by working differently.
The key question that hangs over the industry is how far up the production chain to decouple? It makes financial sense to consolidate a degree of post production, perhaps duplications, station playouts, sound design, telecine etc, in to a couple of good post houses rather than spread every brief across Soho on a project basis. Decoupling deals that involve a particular editor/edit house or a particular production company/roster of directors are much more controversial and run the very real risk of creative compromise and agency alienation. To decouple at the production company level leaves the choice of director effectively in the hands of procurement, with agencies frustrated and clients very exposed if the project doesn’t go to plan.
The aspect of the debate currently ignored is, we believe, the best way to approach decoupling. That is to decouple at service company level. This allows creative agencies to retain choice and freedom of who they would like to direct. The director is then hired on a loan out so that the production company he or she is represented by is effectively compensated as we ‘borrow’ their time and expertise. The production of the commercial is then managed by us as a service company through Cape Town. Post production happens as normal in London, either with further discounts using our own facilities or using existing client deals elsewhere. This means in addition to the natural production savings of shooting abroad which saves the client on average between a third and half of the hard costs of their production spend and even more on artists’ costs, mark up is reduced from the UK norm of 20% (usually to pay for expensive Soho overheads and director repping fees) to a more sensible 10% or less for bulk deals.
The long and short of the debate is that decoupling is happening and the companies that will survive and thrive in ever more challenging trading conditions will do so because they chose to embrace rather than resist it. Decoupling that stifles creativity and director choice is potentially disastrous for the industry as money takes over from quality and brand relationships. Decoupling that frees up creative choice in a more international and dynamic market context, and importantly, that happens in tandem with creative agencies rather than over their heads, offers a real opportunity to save money successfully.
Hannah Bentley, Managing Director
+44 (0) 207 612 8000
hannah@thebank.co.uk
Hannah Bentley, Managing Director
+44 (0) 207 612 8000
hannah@thebank.co.uk
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