“If I could turn back time”:  DOJ and In-House Units

2017 NAB Show Editorial Submission
by Brian Drewes

The news of a DOJ investigation into ad agency in-house production/post units is big news recently – for those that haven’t heard, the trouble is that advertising agencies are allegedly collecting check bids from vendors in order to undercut them via their in-house or in-network groups.  Agencies of course have greater insight into their clients’ true stomach for production costs and can use this information to come in cheaper than independent shops.  For anyone in the know, this is not newsworthy — it’s been the way of life.

I ask “What’s the big deal really?”  The direct connection to the end client is a strategic advantage that these large agencies have with their even larger holding company clients. Strategic advantage is what a good business plan is about, right?  For a long-while, the post industry had their strategic advantage:  a deft focus on a super complex, super expensive and a super niche ability to create content in multi-million-dollar Inferno and Flame suites.

Well, as we all know this is a past-tense statement – software tools once sequestered to only high-end shops are completely portable, easy to set up and many times less than 50k all in.  Agencies and their clients are fully able to deploy these systems quite easily.  What was once our strategic advantage is no longer.  Plain and simple: the gig is up and no DOJ investigation is powerful enough to turn back time.  Check bids or not, if an agency can leverage their scale to produce content cheaper internally, they are going to do it.

The days are numbered for businesses constructed entirely on the idea that you can make $800 an hour in conforming, titling and cleaning up some production equipment in the background.  It was fun while it lasted folks.  You’ve got to do more – and people do, one-stop shops are an example of a search for models that can and do still work.

I believe that others exist as well.  Creating mid-to-complex visual effects is an all-in proposition that in house agencies or client side units simply won’t have the stomach for.   Put simply – it’s a deep commitment.  It’s about supporting and protecting senior artists with experienced management as well as development of a serious codebase to pull it all together, all while executing and bringing vision.   Sure, you might be able to dodge these facts for a while and make some stuff that looks pretty good… but you probably burnt out your team doing it.  Delivering again and again, with consistently great results, year after year is no small task, it’s a love affair.  You can’t dabble and achieve at the same time.

The search is on for an affordable, approachable and flexible model where both agencies and end clients can tap into the creative capacity of larger VFX houses while providing decent and repeatable margin for the VFX creators.  This type of partnership can benefit all sides of the equation, allowing people and organizations to focus on their unique love affairs while providing their stakeholders a solid plan for the future.

I plan to make 2017 the year of rolling out new models, not pining for the old ones.

In order to encourage innovation and experimentation, you’ve got to let go of what worked a decade ago.

Broadcast Beat Magazine is an Official NAB Show Media partner and we cover Broadcast Engineering, Radio & TV Technology for the Animation, Broadcasting, Motion Picture and Post Production industries. We cover industry events and conventions like BroadcastAsia, CCW, IBC, SIGGRAPH, Digital Asset Symposium and more!
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