The Big Picture

New technology makes it possible to produce videos on computer, which has sliced production costs. So why are some clients still paying over the odds for their corporate videos?

You wouldn’t have thought the world of corporate videos could possibly court controversy. However, there’s a storm brewing at the moment, with advertising agencies standing accused of over-charging clients when it comes to their film requirements.

While those in the film making business are fully aware that high-quality video can now be produced very cost-effectively, some are claiming that ad agencies are not passing this information on to clients because of the financial implications for their own business.

Crown Business Communications managing director Nick Lamb outlines the situation as he sees it. “If anybody isn’t paying half – if not a third – of what they previously paid for videos, then they are being misled. We know from the people that we work with that they are still hearing about video budgets at about £70,000, the same as they were five years ago.”

Jenny Rose, Maritz Communications executive producer for film and video, agrees that advertising agencies are putting significant mark-ups on video production. “It could be that clients are having to absorb a double mark-up – from both the agency and the production company,” she says.

Having said that, it may not just be the agencies which are at fault. There is also a suggestion that some production companies are over-charging.

According to Ashley Dodridge, managing director at Gyro Productions, a corporate video maker that specialises in the IT industry, this may be down to the fact that some production companies invested in expensive production equipment a few years ago, which became obsolete quicker than they would have liked, and they are still trying to recoup these costs.

He says: “If you invested three years ago in high-end kit, then you would have paid hundreds of thousands of pounds. Those people that did will be paying that off for many years, and, so, need to charge more. That might be why some companies charge over the odds.”

Now that sophisticated editing and post-production work can be carried out on a computer, video production is a much cheaper process. Lamb suggests the oldfashioned film makers can be at fault for not embracing the latest technology.

“There is still a periphery of suppliers, directors and video makers who want to hang onto their ancient traditions and mythologies, and, in many cases, they are not quick enough to embrace the technologies available to them,” explains Lamb.

“I was talking to someone recently and showed them a video we had made at a cost of £10,000, whereas previously it would have cost us nearer £50,000. And he looked at it and said: ‘Ah yes Nick, but look at those oranges. The orange tone just isn’t the same.’ And I thought what a f*** head. A different orange tone surely doesn’t equate to £40,000.

“It’s this archaic, Jurassic-like behaviour of a lot of video makers. The reality was that they made these programmes for £70,000 and then they dumped them onto VHS tapes – probably one of the worst mediums in the world. These people call themselves programme makers. But they’re not, they’re making business programmes. If they want to art and fart around making documentaries, they should go and work for the Discovery Channel, and leave the corporate video market.”

Obsolete production systems?

Whether companies are being hoodwinked into buying an obsolete product remains something of a moot point. Jasper Pearson, video production manager at marketing communications company Mind’s Eye, suggests the perception that high-quality content can be produced by one person using a small amount of equipment is a myth.

He does concede, however, that the advent of low-cost and reasonably high-quality digital video (DV) cameras means that low-end productions can be done extremely cost effectively – a day’s filming and a further day’s editing could cost as little as £1,500.

Pearson argues that at the medium to high-end, little in the production process has radically changed. The only difference Mind’s Eye has found is in the final format on which clients want to receive the end product. In the past, this was either BetaSP or VHS, but now there is an increasing demand for copies on CD-Rom or DVD.

He adds that clients need to be aware of exactly what they want to get from their video production. That way they can ensure they are getting the most cost-effective option.

He says: “If the end result is only to be seen on VHS or on the Web, then shooting on the lower-cost DV format may well be an option and can reduce costs. If, however, you are after a professional looking presentation which is to be shown to clients, or to be used as a video news release, then it will most likely be shot on a more professional format.”

While it’s true that postproduction costs have come down, Line Up Communications head of video production Rob Leach argues that the higher price charged by some production specialists may be as a result of the professionalism they bring to the job.

Paying for experience

He suggests the more expensive production companies have a greater wealth of experience and understanding about how to produce a polished piece of corporate work. “If a job costs more, it’s because the people involved are worth it,” Leach argues.

Dodridge also makes the point that companies should be aware they may have to pay a little extra if they are using a production company of high repute. “In TV advertising, there are companies that have a reputation and that is what you pay a premium for. I don’t think clients mind paying extra for someone who is very creative and has a lot of good credits,” he says.

What may be happening is that clients, or agencies acting on their behalf, are not investigating the corporate video market deeply enough to find out exactly what it is they are paying for, and there may be some production companies that are seeking to capitalise on this by surrounding the whole area of production in a veil of mystery.

Delores Sanders, marketing director at new media company Ground Bass, says: “Part of what we’re trying to do is to demystify the corporate video market so our clients understand that it’s not just a high-value product.

Mystery making

“We felt this was what the market was calling for because there are a lot of companies around that shroud it all in mystique – whether that be their profit margin, the processes involved, or the technology behind it. I think the client is often not given enough input on how they could best use video.”

Companies should probably start off by ensuring they know exactly what they’re paying for and demand production companies make their costs transparent. Gyro Productions, for example, breaks the costs down and encourages its clients to get cross-quotes from other production companies.

There is clearly the potential for confusion in the new media and video industry, and this may extend upwards to agencies not having a clear picture of how much a production should cost. This is one of the reasons why companies, such as Mind’s Eye, are spending time educating agencies. “Often agencies come to us having plucked a figure out of the air. They don’t know what things cost,” says Pearson.

Using all resources

It is doubtlessly the case that some programmes are still being produced which do not make the best use of the technology available. Because of the advent of computer-based editing systems, at a fraction of the price of high-end equipment that was being purchased a few years ago, there is an opportunity for newer production companies to offer a cheaper service than what was previously the norm.

That said, it is also true that there is still a world of difference in the quality of a low-end production and a video shot on professional Beta format.

Most importantly, due to advances in technology there is now a wealth of video options to choose from. Clients need to be made aware of these alternatives and good agencies should be more than capable of recommending the best solution to them without the fear of being over-charged.

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