No big surprise: It hasn’t been an easy year for the companies that produce television commercials. The terrorist attacks on the World Trade Center and at the Pentagon on Sept. 11 most certainly altered many business plans. But the sheer horror and impact of the attacks on the country also made some forget that a six-month-long strike by actors against advertisers last year, coupled with a weak advertising market most of this year, had already made life difficult for spotmakers. In fact, production company executives say that while business has tended to get back to normal in the two months since the events that now go by the shorthand "9/11," normal before 9/11 was nothing to wax nostalgic about. The year has seen the closure of such shops as Shooting Gallery Productions, the spot division of now defunct The Shooting Gallery; Crash Films, Santa Monica; and bicoastal Straw Dogs and Shelter Films, both of which were a part of Paradise Music & Entertainment, New York. Now Propaganda Films has entered the realm of the extinct (see page one story), a high-profile closure that carries implications for and figures to generate reverberations throughout the production house community.
Those closings may be only the beginning. "A shakeout was inevitable no matter what the economy did," says Stavros Merjos, president of bicoastal HSI Productions. "Obviously, a bad economy has made [that shakout] happen quicker, but it was going to happen no matter how good or bad the economy was. There are too many production companies, too many directors vying for a shrinking market."
Merjos puts HSI among a handful of firms that are busy these days. "You can have one-director or two-director shops that are doing fine," he notes, "but of the bigger places with bigger overheads, I think a lot of them are hurting right now."
One executive of a bicoastal production company, who wished to remain anonymous, puts it more bluntly. "A lot of production companies are in deep shit right now. The real story is going to be not what happened, but what is going to happen," states the exec. "Even when business was good a year or two ago, there were too many directors, too many production companies. Before, they could just survive. Now a lot of these people can’t survive."
Jon Kamen, co-proprietor/ CEO at bicoastal/international @radical.media, reiterates that times were already challenging before the events of Sept. 11. "This has only made matters that much worse and uncertain, but under the circumstances, both my staff and our vision of where we’re headed in the company are quite optimistic," Kamen says. "It has certainly had a huge impact on all of us, but we have, amazingly, been quite busy. Whatever the new ‘normal’ is, we’re experiencing that. We’re OK."
Sally Antonacchio, VP of bicoastal/international The Artists Company, and newly elected president of the East Coast chapter of the Association of Independent Commercial Producers (AICP), says her company has avoided layoffs, but she paints a somewhat bleaker picture than Kamen’s or Merjos’, dating back to early last year when commercial actors started talking about a strike. "First we had the threat of the SAG strike," she recounts. "Then we had the SAG strike. Then once the SAG strike was over, the advertising community went into a recession, and I think we’ve been in that recession since then. Just now, the rest of the world is starting to realize we’re in a recession, but we’ve known it since last year. Quite honestly, I don’t know how long most production companies can hold on. I would say everybody is down at least thirty percent. That happened before Sept. 11."
Competition
Steve Orent, partner/executive producer at bicoastal/international hungry man, adds the shrinking of the dot-com segment of advertisers to the gloomy mix before and since 9/11, but he says that his company is weathering the storms. "We’ve been very fortunate in that we’ve been OK," Orent relates. "There are twelve directors [on the roster] here and some are struggling a bit, but the top echelon of directors—here and elsewhere—are continuing to see boards. I don’t think it’s slowed down for that group. The up-and-comers, the people you’re trying to build, are having a tougher time. So are the guys in the middle of the pack trying to take it to the next level. They’re the people really being hurt the most."
One reason the second tier of helmers is getting hurt, company executives say, is that top directors, many of whom are famous for turning up their noses at uninspiring boards, are more willing to take on jobs that may not make it onto their reels. "I’m encouraging our directors to not be as picky about the choices they make with work," says a production company executive who wished to be unnamed. "We have a lot of high-end guys. They’re very, very picky."
Whereas such directors might want to see five projects on the table before they would pick one, they are now being asked to look at a couple and choose. "For us, it needs to be translated to the directors that we’re in a recession," continues the exec. "We’re now saying, ‘This is a business and you’re part of this business.’ We’re asking them to do more for the team."
Other company executives say they are seeing directors take on jobs they might have passed on not too long ago, but they add that the helmers are under no pressure to do so. "Directors are pretty savvy," says Joanne Ferraro, managing director of bicoastal Coppos Films. "They know that there are not going to be as many projects for them to choose from, so they are going to be more careful about what they want to pass on. They’re trying to look at the good in every project and trying to make every possible project a little better than it might be." In other words, she points out, it’s a buyer’s market right now. "Agencies are getting the pick of the litter in terms of directors to look at their boards," Ferraro adds.
At HSI, Merjos sees directors in a frame of mind that reflects the economic times. "People in general, right now, understand the country is in a bad economy, and when you are in a tough economy you are more amenable to working with people, period." he states. "I see my directors being amenable to helping the company do well, and maybe helping a client we work with a lot, and has been good to us, by doing a job that they might not have done two years ago. They know we have a lot of employees here, and we want to take care of them. We do want to help agencies. We’re worried that agencies are going to get pinched in a lot of ways worse than us."
Gary Rose, VP/executive producer at bicoastal Moxie Pictures, and newly elected president of the West Coast chapter of the AICP, says that Moxie is getting work, just not at the usual level for this time of year—but he adds that his directors are pretty much doing business as usual. "When it’s slower and there are fewer boards, I do feel a bit more obligated to bring more projects to their attention and let them turn them down," Rose notes. "The directors here pick and choose their projects pretty carefully."
Reel Changes
Against the backdrop of a weakened ad market and general economy, the terrorist attacks of Sept. 11 had a devastating initial impact on the production business, but one that doesn’t seem to be having long-term effects. Many jobs were interrupted by the attacks, but none of the production company executives SHOOT spoke with said that any jobs in progress were canceled outright as a result of the events of Sept. 11. In the two months since the attacks, company executives say no strong trends have emerged in the kinds of boards they are seeing. Some acknowledge that there is less dark humor in today’s spots, but add that comedy is still a big part of advertising. Many are seeing more work shot in New York City, but some say that shooting in Canada, Australia or South Africa will still happen, whether because of budgets or location needs.
Kamen suggests that there may be some short-term impact on runaway production, with agencies and clients wanting to keep work stateside, but that a real shift to more domestic production is unlikely. "There are underlying, longer-term issues that haven’t been addressed or solved at this point," he observes.
In her capacity as East Coast president of the AICP, Antonacchio has been active in promoting shooting in New York. She says The Artists Company was filming a Wendy’s commercial directed by Bill Hudson, a helmer with the shop, out of Bates USA, New York, at Giants’ Stadium on Sept. 11, with the New York City skyline in the background, including the World Trade Center. Although the shoot that day was cancelled, the ad was completed in mid-October. The company is working on two more New York shoots: a David Cameron-directed Cover Girl ad, out of Grey Advertising, New York; and an AT&T spot out of Young & Rubicam, New York, which is to be helmed by Gregory Maya. Antonacchio says that shooting in New York was not a perquisite for either project, but that the agencies decided it would be good to do the jobs in the city. "This is the city that got hit the hardest," she explains. "We have to do our part to help it bounce back."
One unnamed executive reports that a lot of people are talking about shooting in the U.S. rather than overseas—but that’s all they’re doing, talking. "I still see a lot of clients coming in budget-challenged and saying, ‘South Africa, Australia, Canada.’ Maybe marginally less than before, and certainly not because they want to, but because they have to because of the numbers. Do we like it? No. Do our directors like it? Absolutely not. Do agencies and clients have less money than they used to and thus need to find a solution even if it isn’t us? Yes."
Ferraro says that Coppos Films is shooting more in New York since the attacks. "We are being asked, ‘Do you have a New York director? We want to shoot this in New York.’ Tom Schiller and John Turturro are our New York-based directors. Tom just finished his first year with us, and during that time he shot in New York twice. Now he just shot in New York [in October] and he’s shooting in New York again."
Ferraro says the work coming into Coppos is pretty much content as usual, with a good amount of light humor. However, since 9/11, Ferraro notes, changes have been necessary for some projects and directors’ reels. For example, a comedy-based Bud-weiser campaign directed by Schiller for DDB Chicago was altered to change the tag line, which had been "Real American Heroes," to avoid what might have seemed to be insensitivity to the real American heroes: those who lost their lives as a result of the terrorist attacks. And Ferraro adds that when the company was putting together a reel for its newest director, Richard Sears, some of the darker-humored spots that he has helmed were left off. "They were great spots and we loved them," states Ferraro, "but we thought maybe people didn’t want to see that right now."
Back to Business
At hungry man, Orent reports that the company has taken E*Trade’s "Broker" off partner/ director Bryan Buckley’s reel because it had the World Trade Center in the background. "It just didn’t feel right," Orent says of leaving the spot on the reel. "[Other than that] we really haven’t made too many changes [to our directors’ reels.] A lot of the darker stuff we have done has certainly been seen by people, so it wasn’t anything we had to change." Orent says hungry man is about to do "a big job" in New York with Goodby, Silverstein & Partners, San Francisco, but he was unable to provide details at press time.
Moxie recently completed a job for Suave, out of Ogilvy & Mather, Chicago, and directed by Pam Thomas, that was originally scheduled to shoot on Sept. 12 in the New York and New Jersey area. When the filming had to be postponed, Rose began discussing the possibility of shooting in Toronto. "And then [New York City] Mayor Rudolph Giuliani said, ‘No, keep the business here in New York.’ So I decided we won’t do Toronto, and we went back to New York. Now I’m producing another job in New York, as well." Rose says the second New York job he is doing—a Thomas-helmed Gatorade ad out of FCB Chicago—didn’t necessarily need a New York setting. Merjos expects to see more spots that he calls "Americana," such as the campaign HSI’s Peggy Sirota is directing for American Airlines. "I’ve seen other campaigns that are that same type—people feeling good about America. I call it ‘Olympic advertising.’"
Production company executives don’t claim to be economists, but in general they are mildly optimistic about business turning around next year. Among the more positive is Moxie’s Rose: "We’ll get through to next year, and go into the new year, and business will start picking up and building steam. There are a lot of elements at play that are bigger than our business."
Orent is also looking on the bright side. "This will definitely change," he says of the economy. "Business is very cyclical. I personally foresee this downturn going on a while longer. There will be work, but it certainly won’t be the way it’s been the past couple of years. As long as we all adapt and are smart—which I think we had to be anyway because of the economy—we’ll survive and do well and prosper."
Another difficult year is foreseen by Ferraro. "I think advertising and the economy are going to have a bad year, and therefore we’re going to have a tougher year," she opines. "It’s not the year to redesign your studio space or make a big move or take on more space. Keep it together, get through it, and those that get through it will do really well the following year."
