In an industry that has undergone dramatic changes over the past decade, we are faced with a new reality. The evolution of content has shifted consumer attention to digital platforms, increasing the demand for digital-first content while fragmenting marketing budgets. This shift has fundamentally altered our relationship with content and exposed the flaws in traditional content production business models.
By mid-2020, the industry had arrived at a crossroads. An economic crisis, a global pandemic, and an underlying sense of rebellion against established norms created an environment where digital content consumption skyrocketed. Capturing consumer attention in this new economic landscape became paramount.
A decade of rapid evolution has reshaped content production, causing a surge in demand. To keep up, content must now be produced and published at an unprecedented pace. Deliverables continue to rise, but budgets remain stagnant, forcing media companies to fight for survival.
An Outdated Approach
Traditional business models, designed for an era when TV commercials dominated, now struggle to remain relevant. These outdated models place significant strain on media companies that must now operate in a digital-first world.
Production companies have been slow to adapt, often perceived as too expensive and too sluggish to meet the needs of digital content. Over the years, average production markups have plummeted from nearly 30% to as low as 10%, making it increasingly difficult for these companies to sustain themselves.
Simultaneously, agencies are losing retainers due to the industry's shift to project-based work. To compensate, they have started internal production studios, further disrupting the market. Meanwhile, brands have begun to distrust both agencies and production houses, realizing that high quality does not always equate to high cost. As a result, alternative solutions such as influencer marketing, user-generated content, and in-house teams have gained traction.
As the market share for agencies and production companies shrinks, a lack of transparency seeps through the industry. Each entity prioritizes self-preservation, often at the expense of those further down the chain. Creativity is stifled as the creators, crews, and suppliers — the backbone of content production — struggle to sustain themselves. In reality, these individuals hold more power than those simply managing the work.
The post-pandemic world is here to stay, making adaptation essential. To remain viable, production companies must embrace a leaner, more efficient approach. The industry has reached a turning point: adapt or become obsolete.
Redefining Production Companies
For production companies to thrive, they must redefine their role and the value they offer. Despite the challenges, they still have an important place in the industry. Their expertise, networks, and deep understanding of content creation provide undeniable value.
However, survival requires transformation. Companies must streamline their processes, embrace leaner teams, and execute projects on tighter budgets. Success will come to those who clarify their purpose and reshape how they collaborate with clients and creators.
The Freedom of Creativity
The future of content lies in decentralizing creativity. Rather than relying on exclusive creative ownership, the focus should shift toward institutionalized creative collaboration. Engaging a broad network of creators and suppliers will enable companies to coordinate talent effectively and deliver high-quality content at scale.
A Culture of Trust
Transparency fosters trust. A culture of direct and honest communication strengthens relationships between clients and creators, reducing suspicion and uncertainty about the value being provided. By prioritizing transparency, we empower both ourselves and our clients to make more informed decisions.
Fearless Innovation
At Dare, our philosophy embraces fearless problem-solving. While many alternative models exist, the key to navigating this new era of content production is the willingness to experiment and challenge traditional norms. By pushing boundaries and embracing change, we can forge a new path forward.
Written by Chris Coetsee
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