It has become a do or die world for commercials post-production outfits, in which everyone is exploring new-business opportunities to keep themselves afloat. Gone are the days when post- houses could rely on the simple model of providing expert editing, finishing and visual effects (VFX) for a UK-only market.
As audiences move away from TV and on to multiple platforms for visual entertainment, post- houses are having to become "media neutral", according to Andy Barmer, The Mill's managing director. "To date, the internet has been below the line - sure, there's been video online for quite a while, but it has not really been touching us," he says.
Now with full-screen video on the internet through services such as Joost, and 69 per cent of UK net users connected via broadband, online video is quickly moving above the line, "and that is an opportunity for us", Barmer adds.
The Mill worked with the picture edit house Final Cut and the advertising agency TBWA\London on the launch campaign for Sony's PlayStation3 in the UK. This project saw five films, shot in high definition, posted exclusively for viewing on the PS3 website - with plans to migrate to cinema over time.
"The commercials landscape is changing," Rick Russell, Final Cut's managing director, agrees. "Two years ago, when we could see this coming, it felt quite threatening: 'What is this going to mean to us?' But then you realise the bigger picture - that there will be more diverse work out there, and you have to change your thinking and embrace it."
Post- houses are seeing a whole host of transferable skills within their ranks and, spotting an opportunity, are setting up new ventures for non-linear services. For example, Golden Square Post has created Disqo - a new-media division to provide video content to agencies.
"Until recently, digital agencies didn't require our services. Any rich-media content could just about have been generated in-house," the Disqo commercial director, Ewan MacLeod, says. "But clients are asking more of their online marketing - their competitors have raised the creative bar and consumers are demanding more interesting content online."
Disqo is tackling all aspects of non-linear content, from website design to broadband video production, with an interactive Mini campaign for WCRS and a series of virals for Mazda through Syzergy already under its belt. And there seems to be an appetite among agencies for post-production companies to expand their portfolios and create more than just video content.
Framestore CFC has plans to expand its design and interactive division, while outfits such as Prime Focus UK (formerly Clear Post) and Rushes are reporting instances of web builds and even creating banner ads to coincide with campaigns they are working on.
It's about companies becoming more versatile, the Rushes managing director, Carl Grinter, says. "The requirements that clients have are changing, and there is now such an intense pressure on budget and schedule that is driving us into different business areas."
This applies even to the more traditional aspects of the trade.
At Rushes, a small team of offline editors has been brought in-house for occasions when there isn't time to use a third party. "If something needs to be turned around very quickly, it's good to be able to say that we can do the telecine, put that straight into offline then through to online - giving a better workflow, and a seamless facility," Grinter says. "If you're not adaptable and flexible, the work could easily go elsewhere."
The Framestore CFC managing director of commercials, Helen Stanley, agrees: "Anything that makes us slicker and quicker and, by result, more cost-effective is what people are looking for at the moment."
Stanley is even experiencing agency demand for a one-stop production of VFX-heavy projects: the latest Guinness spot, "quality", for Abbott Mead Vickers BBDO is one such example.
Yet, as post-production houses are having to handle a greater spectrum of services, from cinema commercials and print to online video and banner advertising, some agencies are still unaware of all the benefits they can bring their clients. "They are not using us efficiently enough," Simon Huhtala, the managing director of Clear, Prime Focus UK's visual effects division, says.
A continual budgetary pressure is also driving another change: post- houses are actively exploring the outsourcing of work to cheaper economies such as India. Representatives of India's post-production sector are already making frequent visits to Soho, and are in continual contact with the London market, offering themselves as outsource partners. The problem is how to make the arrangement work.
The Absolute Post managing director and VFX artist, Dave Smith, is taken by the idea for certain elements of post-production - such as rotoscoping and wire removal - "but although we know these people can do the work at a fraction of the cost, the problem is managing it", he explains.
"We looked into this last year and felt that, unless we have someone on the ground over there who was supervising the work being done, it just wasn't viable," he adds.
Barmer has similar reservations: "I've not seen an opportunity where I think this outsourcing arrangement will fit. There are issues to do with speed, quality and trust. The degree of quality required in commercials post-production and the ability to turn on your heels means we have to be absolutely sure that any outsource partner has the same flexibility and the same commitment to quality that we pride ourselves in."
Meanwhile, as UK companies try to figure out the best way to work with Asian markets, the Indian post- production giant Prime Focus has bought its way into London, purchasing a 55 per cent share in the VTR Group for £4.7 million last year. The combined force of Prime Focus and VTR then bought the award-winning VFX house Clear Post-Production to bolster its presence in the advertising and film effects (FX) market.
Huhtala says Prime Focus UK is in a unique position in terms of outsourcing and, where possible, he intends to capitalise on that. "We've hired internationally to place people in India to solidify our pipeline over there. We're also trying to send two or three people over there every couple of weeks on fact-finding exercises - it is fundamentally a transfer of knowledge."
However, Huhtala doesn't see the huge benefits in outsourcing advertising work as he would for film projects. "The trouble with a 30-second TV commercial is that - unless it has an awful lot of 2D work or VFX - it's actually not worth outsourcing."
He adds that, despite fears that outsourcing could drain work from the UK market, Prime Focus UK actually has received more commercials from India than it has sent over there. "There's a bit of a one-way street that's envisaged with work being taken out of the London marketplace. But the agencies in India are looking at this as an opportunity - they want that international level of talent, and our owners can offer that by coming to London."
Post- houses in the UK are also looking further afield for opportunities to expand their core businesses and reach clients internationally. The Mill and Framestore CFC have already set up shop in the US, but in the past few months, the appearance of Absolute Post in New York has demonstrated the importance of the international market to the smaller VFX houses.
"We had been working in the US, where we would dry hire the room and kit, but it got to the point where it wasn't financially viable to do that any more," Smith says. "It made more sense to buy a Flame, a support machine, CG workstations and set up shop."
"The Mill's US outposts let us get closer to our international clients, particularly in New York because that's where the big corporate advertising is coming out of," Barmer explains. And with the success of its New York office - now employing nearly 100 people - The Mill has opened an outpost in Los Angeles to use US directing talent.
"Many directors represented by London production companies live and shoot in LA," Barmer says.
Final Cut also has offices in New York and LA. "It's become like one big marketplace - directors are beginning to work in America and the UK, and our editors are going to work with them," Russell says. "It's also an era where the editors in the US are having a say about the team they're wanting to put together."
Transatlantic projects, made possible by the shift to digital workflows and the ability to send high-definition data files in almost real time, has also allowed companies to have a virtual presence in the US and form strategic partnerships.
The Moving Picture Company provides "virtual telecine" with Traktor and MJZ in Los Angeles, "so clients can be sitting in America looking at exactly the same monitoring and calibration of imagery that we're looking at in London", its chief executive, Mark Benson, says. By throwing a webcam into the mix, it's almost as if the operator is in the same room as the director - reacting to comments.
The other international territory that is on the radar for the UK's post- community is, of course, the Far East. China now ranks as the third-largest ad economy in the world, and with a population of more than one billion and multinational ad agencies there, post- houses see this as a prime target.
This year, Golden Square partnered with the digital communications group Profero to be the first UK post- house to set up in Shanghai, and has relocated one of its video designers to recruit for the operation and ensure a strong link between the two bases.
With so many drivers and opportunities in the post-production market, it's not immediately obvious which should take priority. Everyone is changing, but by no means in the same way. While some see branching out into other media as a natural next step, others are looking to expand internationally, or cutting budgets by outsourcing. From a market made up of many of the same, we're moving to a more colourful selection, with niche offerings that will help secure future business.
HONDA - 'HONDAMENTALISM'
The Mill is experiencing a trend towards more transatlantic projects, where the digital handling of high-definition images allow the company's remote sites to work together on a commercial.
This was the case for "Hondamentalism" - a spot for Wieden & Kennedy London - with clients in London and Los Angeles. The ad portrays Honda engineers battling through high winds, pushing themselves to the limit, before they are engulfed by a deep light force.
All three offices of The Mill in London, Los Angeles and New York were involved in some aspect of the post-production. Of the 60 shots in the minute-long ad, The Mill LA worked on 55, creating the "invisible" effects. The Mill NY graded the spot as clients in LA viewed the work via digital delivery. This data was then transferred to The Mill in London, where a digital colour processing regrade of the spot was completed by the colourist Seamus O'Kane.
"Five years ago, you could not have worked like this," The Mill's managing director, Andy Barmer, says. "You would have been waiting for a satellite uplink and the quality wouldn't have been that good. But now, because of the speed of the internet and the expertise within our IT department, we can send HD-quality video almost as fast as real time across the Atlantic."
As younger audiences turn to the internet for entertainment, creating content for non-linear platforms is becoming a more frequent requirement for companies such as Absolute Post.
Last year, what appeared to be amateur footage of a giant puppet stalking the streets of Reykjavik turned out to be an elaborate viral campaign for Levi's. Efforts had been made to make the material look as user-generated as possible. Footage was also drip-fed on to the web, with other videos showing the helicopter-controlled, 60-foot puppet.
This campaign was a commercial project by Levi Strauss, Bartle Bogle Hegarty and The Viral Factory, and constructed by Absolute Post. To retain authenticity, the output had to be made to look rough, ready for an internet-only distribution.
"The whole idea was that it was meant to be completely seamless, as if someone had filmed the event on their mobile phone," the Absolute Post managing director, Dave Smith, explains.
"But in actual fact there was a vast amount of post-production involved that we couldn't brag about."