Comments from Steve Garvey, Director of Moving Image and CEO of EVCOM. Follow @MovingImageNews and @EVCOMUK on Twitter for more.
Looking at the Televisual Corporate 50 over the past decade, the 2017 survey shows encouraging data about an industry that’s growing as its product is increasingly in demand.
The long-term trends in corporate film are positive. Two-thirds of respondents have reported increased turnover since 2011 and average turnover is up 30% since 2014. Every year since 2008 at least 59% of agencies have reported budgets increasing or staying the same and in the two best years, 2015 and 2016, this figure was over 85%. In-house headcount is up 26% since 2008 as producers keep pace with demand.
But the growth in the market doesn’t mean it’s easy, as any production company head will tell you. Average profits have stayed consistent despite increases in turnover: this year’s £275k is close to the decade average of £266,500. So revenues are growing, but agency owners are finding it hard to build their balance sheets.
Average video project budgets are drifting down, from £32,600 to £25,000 in the past decade. That’s a 23% drop, and when combined with the increase in staffing levels it’s clear why margins are under pressure.
There’s evidence that producers are broadening their service offering, perhaps to compete against agencies from other specialisms (events, digital, social, PR and others) who have started offering moving image content. 71% of their work is delivered as video, down from 79% in 2012.
The Televisual Corporate 50 is an invaluable source of data about an under-reported but significant industry. If you look beyond the survey, you find echoes of the same trends elsewhere.
For example, video advertising spend on mobile grew by 98% in the UK in 2016 and digital ad spend on video was £1.58bn in the first half of 2016 alone. These figures exclude broadcast commercials, indicating a huge switch in marketing budget from traditional media into digital video. The skills needed to produce digital video content are the same as traditional corporate film, which is great news for corporate producers.
On the other hand, the number of companies registering video production as their main business activity has tripled since 2009. Their average turnover was very low, suggesting a lot of startups meeting the booming demand for moving images in marketing and corporate. The market is growing fast, but well-established experts are competing against insurgents as much as traditional rivals.
So where does the industry go from here? EVCOM hosted a Screen Leaders’ Summit in February and most of the Corporate 50 attended along with Televisual and the BFI. We discussed these questions and more, and the result is a campaign that will promote the expertise of video storytellers and help shape the industry’s direction. We will supplement the Televisual Corporate 50 survey with a more in-depth survey, and will also produce an agreed method of measuring ROI for corporate commissioners.
This industry has an exciting future and currently sits at the heart of digital communications. It needs to demonstrate its relevance and effectiveness more successfully to budget holders at Board level. If we can achieve that by the time of the Corporate 50 in 2018, we will see the growth trend continue and profitability improve. And the next decade could be spectacular.