Here’s What the Producers of the World Discussed in Cannes Last Week

Whatever your views on the value of Cannes Lions, it’s hard to dispute how fruitful bringing the whole of the world’s creative industries together in one place for a week.

That unique situation is something that production companies have been capitalising on for 16 years now at the World Producers Summit. Hosted each year on the Little Black Book & Friends Beach, it’s an opportunity for production companies to gather and share intelligence about the biggest challenges, solutions and opportunities they’re seeing play out in their individual markets. By sharing what’s working and what’s not, the hope is that countries that are facing difficulties will learn from those that are making progress.

The session began with an introduction from Steve Davies, chief executive of the APA – the UK’s Advertising Producers Association – and Tony Petersen, former president and member of the advisory board of the Commercial Film Producers of Europe (CFP-E). Steve noted the absence of Matt Miller, president and CEO of the AICP – the US Association of Independent Commercial Producers – who had been waylaid in union negotiations back in New York. Although the AICP is usually a key component of these meetings, the reason for his absence revealed some of the general climate in US production today.

Steve was the first to admit that this meeting of global production leaders can often feel like “group therapy” – or at least a chance for leaders in the sector to realise they’re not alone in their concerns and stresses. However, he encouraged everyone to try and focus on information which can help the summit attendees to learn solutions and innovations.

Before breaking into table discussions, Steve suggested some topics which might be of interest to discuss including:

- How some markets have been beginning to negotiate payment for directors’ treatments, whether they win the bid or not

- The rise of in-house agency production, some of which he noted originally “faltered”, although the big holding companies will eventually make it work, “to some extent to our detriment”

- Generative artificial intelligence and ways in which it’s augmenting processes in production

- The challenges and opportunities in launching new talent in the current landscape

- Strikes among filmmaking crew and other disciplines

- Ways to increase diversity of talent behind the camera and to ensure that those people get the work

After each table’s informal chat, the Summit proceeded, working through a representative from a production company in each country that had someone there in alphabetical order, from Belgium to the UK.

The theme of “group therapy” turned out to be one of the larger ones as many of the struggles production companies are facing were repeated from all over the world. Crew costs appear to be growing higher in much of the world as inflation pushes up wage expectations and a lack of supply drives up expected rates. Company owners also noted that crew members are better organised than before, with people regularly sharing what they’ve been paid and by whom in WhatsApp groups. In Italy crews recently added 15% to their costs with no negotiation, a producer shared.

Meanwhile budgets are not growing at a rate for production companies to accommodate for this and many markets reported that they are often shrinking.

Transparency with bidding is an issue in many companies such as the US, where sometimes it’s five or six production companies bidding, but this information is often obscured. A company recently spent $40,000 on a treatment, one summit member claimed.

Payment terms have also been continuing to put pressure on production, turning production companies into banks, many at the Summit said. China was at one extreme of this, with reports of no down payments up to 15 months after delivery. The representative from a Chinese production company said that they turn down close to 70% of the boards that come to them because they can’t agree on the payment terms. As a result companies that go for growth there usually end up doing “huge revenue at a loss and disappear within five to seven years.” The only solution offered was to “keep saying no” until you’re indispensable to those clients and they have to agree.

The impact of in-house agency production’s proliferation is a global phenomenon that concerned the majority of production leaders attending the World Producers Summit. Bidding against independent companies was a practice that several producers expressed concern about. “It’s certainly a principle in the UK and in our worldwide document that we refuse to bid against in-house entities, because once they see your bid, they can easily beat that, they can take the methodology. It's a waste of time and money,” said Steve from the APA.

One of the issues production companies face as a result of these in-house departments growing is agencies borrowing directing talent and hiring people from production companies, with reports of salaries doubling in some markets.

Summit attendees shared cause for hope in this regard though, reminding one another that in-house production is often being fought by procurement, who argue it’s often not the best value for the client. Many creatives are also fighting it because they want to work with the directing talent production companies have externally.

Certain markets had positive and inspiring developments to report. One French producer called for unity in the face of the common challenges the sector faces, arguing that the power is in “saying no together” to practices that they deem unfair. Independent production companies need to remind one another – and their clients and agency partners – how talented, flexible and agile they can be compared to some of their lumbering corporate competitors.

Germany came to the Summit with a project to change pitch culture called the Pitch Cost Share. The German commercial directors association – Direct – came to the production association to build a campaign together with them and they are now calling for agencies to pay directors and production companies for the work they put into writing treatments, whether they win their bids or not. The APCP reported directors' strikes in Spain over payment for treatments, so this cause certainly has international support.

Japan came to the discussion with positive results. With a weak Yen driving down costs, large productions coming and drawing talent back from the likes of Los Angeles, as well as how lockdown helped local talent to thrive, it’s been a good year for production in Japan, the country’s representative reported.

The Baltics are also booming, said a producer from Lithuania. 2023 started slow, but the season is now picking up for them. However, they echoed all the same complaints as many others.

Taking a contrary positive note, the Netherlands’ representative said he doesn’t mind in-house work getting done because there’s enough “high-end” work and the agencies do the lower level productions that they’re not interested in. Payment terms were also comparatively favourable, while as much as 50% of production companies’ work is now going direct to clients there. 

The Polish production association shared a positive initiative in the form of its work towards educating  crew, building internship schemes that in theory will help reduce the scarcity in this talent and therefore drive down costs.

Although a country within the UK, Scotland took its own slot at the Summit, sharing positives around an influx of talent, kit and studios in the country, suggesting that the production industry in Scotland is booming.

Meanwhile in Spain, the government has announced investment and regulation to help bring film work into the country, in the form of the Spain Audiovisual Bureau. It offers assistance service for companies interested in undertaking projects in the audiovisual sector in Spain as well as for Spanish companies interested in internationalising their activity, through a centralised point of contact. Paired with a new visa for a 90-day visa for audiovisual media, the hope is that production in the country will be supported.

Serbia also shared positive news about tax incentives for commercials, with the producer representing the country encouraging others to try and work with their governments to promote a better business environment. There’s been good collaboration between production companies there too, which has allowed them to slow the increasing costs that other markets have seen. 

Well-publicised strikes in the US and extended negotiations left a production representative sharing, “we’re pretty exhausted”. And with the risk of a SAG strike to come, there are fears that more production jobs will go outside of the US where the talent is working. One welcome development in the States was the Alliance of Independent Representatives (AIR), which has formed to unite, support and elevate independent representatives by creating a platform where community dialogue, resources, and vital guidance are shared. 

The World Producers Summit confirmed just how internationalised the commercial production industry is in 2023. Challenges production companies face are often shared across hundreds of borders, but when a successful tactic to overcome these challenges emerges in one country, it’s not long before production companies in other countries pick it up. A little catharsis between producers is welcome at these events, but solutions to business problems are what keep them coming back every June.