Close-Up: Why APA won't back down in battle with Red Bee

Long-running dispute shows no sign of ending as APA members dismiss latest offer as 'too little, too late'.

The festering dispute between London's production houses and the BBC over the favoured status of Red Bee Media in producing its on-air promotions shows every sign of becoming a running sore.

The row has its roots in the BBC's practice of borrowing directors from production companies to produce commercials, programme trailers and station idents for free. And in the past few weeks, the issue has exploded into a full-on row.

To make matters worse, Red Bee's attempt to heal the wound with the offer of a new financial deal to members of the Advertising Producers Association in order to preserve the status quo has succeeded only in rubbing salt in it.

"The offer is too little, too late," a production company boss complains. "Maybe a while ago, we might have accepted. Now it's all gone too far and we've all had enough."

The BBC, already under fire over the scope of its commercial activities, now faces renewed criticism over using licence-payers' money to give a supplier company a massive unfair advantage.

Production companies were originally willing to oblige. After all, the work could enhance a director's reputation. For another reason, there was goodwill towards the BBC, still seen very much as a national institution.

That all changed in 2005 when BBC Broadcast, which produced those commercials, was sold to the Australian bank Macquarie for £166 million. In order that BBC Broadcast - later rechristened Red Bee - should have a value, the BBC granted it a ten-year exclusive contract to produce the vast majority of the corporation's commercials.

However, Red Bee still borrowed directors as if it was still the BBC's in-house production facility. And most production companies, aware only of its name change, not its ownership, continued to loan them.

Now the APA wants the BBC's ad agencies to be allowed to pick their own production company and negotiate a fair price for the work. And it accuses the BBC of hiding behind a contract that should never have been signed in the first place.

APA members claim the loan system is an anachronism and that Red Bee is reaping the benefit of their investment in directing talent.

"Twenty or 30 years ago, production companies didn't operate in the commercial way that they must now - the market wasn't so competitive," Steve Davies, the APA chief executive, says.

"The BBC has behaved atrociously," Helen Langridge, the founder of Helen Langridge Associates, fumes. "I don't believe Red Bee can get better deals in the market than we can."

At present, 66 APA members, who account for about 90 per cent of the membership, say they're unwilling to lend directors to Red Bee. And an offer of improved financial terms from Red Bee - including a 25 per cent increase in the directors' daily fee to £5,000 - has failed to shift them.

But Langridge insists: "It's not about money any more. There's a principle at stake here."

The BBC says it has been in touch with the APA and has brokered discussions between the parties but is adamant it will not intervene directly. "The contractual relationship is between Red Bee and the agencies from who they subcontract directors," a spokesman says. "Therefore, it is a matter for them to resolve, not the BBC."

It also claims there are mechanisms within the contract to ensure the corporation gets value for money and that, far from delivering more competitively priced work, allowing its creative agencies to pick a production company would be less efficient and cost-effective "which would, in turn, mean less licence-fee money to spend on screen". Nor, it adds, is there any evidence that an APA member boycott will impact on the quality of the work Red Bee produces.

Red Bee claims it would like to continue working with APA members. But with a number of production companies having agreed to continue loaning directors - and the possibility of using others from outside the UK - it won't be the end of the world if it can't.

Indeed, the head of one well-known production house, who declines to be named, says: "Although we continue to support the APA, we don't have a problem with this. A BBC project is still good for getting a young director started."

Andy Bryant, the Red Bee creative director, says: "We produce a range of BBC marketing content of which this work is a relatively small percentage. It isn't the same as for producing a TV commercial but it's high quality and high profile and there's a long list of top directors whose careers were helped because they had the opportunity to work for the BBC in their early years."

He adds: "Davies talks about a 'free market' but the fact is we're offering a 'free market' of opportunities both for directors and for the production companies that represent them. We'd like to work with the APA but life has to go on."

Bryant also denies APA claims that it puts the work of borrowed directors on its showreel to win briefs in competition with APA members. "The only BBC work on our showreel is from our own roster of directors," he insists. "We've never misrepresented the work of loaned directors as our own."

So what happens if the stalemate continues? Laura Gould, Red Bee's head of TV production, admits it will make life more difficult but not impossible. "There are a number of good directors not represented by APA member companies and we can call on others from animation companies and the world of feature films," she says. "It's also true that a number of APA companies have never been prepared to lend us directors."

Davies isn't convinced. "Red Bee can struggle on because it'll always find a director to do the work," he claims. "But the BBC has a reputation for quality advertising. It's hard to see how Red Bee can possibly keep delivering it."

THE APA'S CHALLENGES

How to cope with a difficult financial climate made worse by over-competition. There are too many production companies and directors for the number of scripts generated. The buyers' market is good for clients and for the quality of work, keeping London at the international forefront. But it's tough for individual companies.

Finding a way of identifying, investing in and nurturing the new talent that agencies demand and dealing with increased pitch costs despite the squeeze on profitability.

Fighting suggestions that TV advertising has had its day. "Fortunately, due to the excellent work of Thinkbox in particular, the idea that TV advertising is dead is largely being seen for the nonsense it is," Davies says. "It's still something we need to jump on when it crops up, though."

Confronting the idea that "digital" means "cheap". Clients now have a greater understanding of digital media, Davies says. But he warns: "There are still recidivists who want a fantastic commercial shot over several continents and then announce they have a budget of £30,000 'because it's a viral'."

Developing the potential new workflows from overseas markets as well as non-traditional media in the UK. With all their focus on making existing productions as good as possible and getting the next commercial in, companies have had little time to develop these new markets.

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