How media houses are keeping production costs in check with really low ad spends?

In the past few years, the traction between brands and film producers has tapered. Initially, production houses used to put out commercial ads through the medium of television and satellite alone. Today, there are multiple devices the likes of phone, laptop etc. by which ads can reach the final consumer. People are consuming content through various mediums and there are plenty opportunities to reach the target audience.

The cost of technology has reduced drastically to supplement the rise in demand. Earlier, the production houses used to have a large crew on set working with very expensive cameras and negatives which took a long time to process. As opposed to that, now everything has become digital. Today, if want to make a good commercial ad, the production houses can even use their latest 4k technology mobile phone to film it.

In today’s day and age, creating any kind of content whether it is commercial or films there are numerous available avenues that come with cheaper technology to meet the objective. Also, there is a big pool of talent at our disposal ranging from producers, to DOP and post-production people who can deliver a project and create quality content at a much lesser budget than it used to be 5 years ago and that has made a huge difference in the way the industry functions. Now you can make 4-5 campaigns in the same budget of the cost of one campaign about half a decade ago, and it is all a combination of cheaper technology, young talent, and the availability of multiple platforms that has made the content connect with its end consumer. 

What are the challenges faced by production houses?

There are two facets to the types of challenges faced by the media. The positive challenges are that brands are asking for campaigns where for one particular product they are asking for 4-5 commercials to push the product out in different scenarios and forms of story-telling in a short span of time which is done very quickly.

At the other end of the spectrum, there is a lot of competition between production houses that have popped up at every nook and corner due to which everyone is fighting for the same job and unfortunately the cost to get the job done has reduced significantly.

One of the other challenges faced by production houses is that the thriving talent pool budding in our country wants to grow at a fast pace and if the production house doesn’t collaborate or is producing breakthrough films/content then chances are, the talent will quickly move to the next best option where they see an opportunity to excel.

As a studio, we understand the merits and demerits of technology but for the production houses it is a learning curve. Education of technology is a very vital part of content creation which could sometimes pose a challenge to a production house because they might not be in tune of what’s available and working for the business.

Understanding the basics of technology is key for production houses in this country. They have to keep pace with technology and if they are not able to keep up with the dynamics, there is always somebody else waiting in the wings to take your place and deliver better content using technologically advanced methods

How are limited ad spends are putting pressure on them?

Firstly, the profits of production houses have declined. Then there are large media auditing companies that are responsible to maintain records on spends that the brands make when they are about to launch a campaign. Lately, the cost-cutting that has happened especially due to Covid has reduced the consumption as compared to last year and the ad spends have anyway come down. But the cost of the production is not reduced.

Today, when you are hiring a piece of equipment or tying-up with a studio or using hundreds of different people to deliver a project the cost of that is not reducing, it’s still the same because at the end of the day everybody needs to survive. But the brands are reducing their budgets overall and that is one of the prime reasons that there is pressure on production houses in terms of survival.