With programme budgets being squeezed ever tighter producers, broadcasters and advertising agencies are looking at ways of taking traditional post-production work - such as offline and basic onlining - in-house. So how are facilities planning to adapt and diversify the services they offer?
Broadcast identified five growth basic onlining areas that have been mooted to make a mint for the post sector over the next few years. We then polled some of the UK's top facilities on what the likelihood was that any of these would improve their revenue.
Companies scored each area out of 10 on two bases: how much the new areas of business were contributing to their bottom line right now, and how much they estimated them contributing in one to three years' time.
High-definition broadcasting is still largely driven by the US and Asia, so broadcasters and producers who co-produce extensively are still the largest clients for HD services. But with Sky and the BBC both looking to broadcast HD programming into UK homes during the course of 2006, facilities are hoping this will take the format into the mainstream.
The Farm Group built its dedicated HD post house, Home, in 2000 and according to David Klafkowski, the Farm Group's technical director, the facility has been busy since it opened but still mainly with work for the US and Japan. UK-based HD "only really kicked off in 2005" he says, having just completed work on some of Sky's first HD commissions. "HD transmission will really give HD a point," he adds. However, Klafkowski warns that the premium for HD post will start to fall and be "only fractional" by the end of 2006.
At DGP Media, Rowan Bray, general manager, adds: "No week goes past without us doing an HD edit, and some clients will only work in HD: all this is an indication of where the broadcast market is going."
The Mill managing director Andy Barmer says that while HD does bring in a certain amount of revenue, at present those figures aren't great enough to make HD more than "a differentiator" in his opinion. "Just because people are using HD it doesn't mean they have 30% more money to spend. For HD to really make money, the volume needs to increase and this has to be driven by the broadcasters."
Keith Williams, managing director at St Anne's Post, has also noticed some anomalies in the HD post market: while it may be strong in terms of editing, telecine transfers have dropped off, he notes.
The VTR Group's Neil Lane, director of operations, believes that HD is already commanding less of a premium price. He predicts that HD post work will fall in the next year to equal SD prices. "It's market forces at work," he explains. "Everyone will fight for the work, HD kit will get cheaper and prices will fall too."
However, Manchester-based facilities managing director Andy Sumner believes that some areas of HD work, such as audio post, will always need much greater attention than SD and so command greater prices.
Contribution to bottom line now: 4.5/10
Contribution to bottom line in the future: 7.4/10
DVD has been one of the biggest success stories in UK media of recent years. Massive consumer take-up has been driven by falling prices of DVD players and now almost every household has at least one player, with users slowly replacing old VHS collections with updated and upgraded digital versions. This mass market has seen some facilities, such as The Strong Room, partnering with DVD specialists.
The Strong Room formed a creative partnership with DVD house The Pavement just over five years ago, and business development manager Rob Kelly believes that by now, the DVD market "is getting more difficult, unless you're at the very high-end. We could get into DVD authoring but I don't think there's great money to be made in it".
However, DGP Media undertakes large amounts of DVD work, and Bray believes that even with the market as saturated as it is, it's still possible to make money: if you can attract the sheer volumes of orders.
"We produce around 60 or 70 DVDs a month, often at premium price points, so the DVD market accounts for around 50% of our business," Bray estimates. DGP is also working with Sony on the UMD HD DVD standard and is working with partners in Europe in an HD DVD alliance to bring PAL HD DVD to Europe. Another growth area for the company is quick-turnaround corporate or broadcast DVDs, which are handled by its new bureau service, DVD Expresso.
HD DVD is tipped by The Farm's Klafkowski as a great improvement on DVD, "really quite a clunky format" in his opinion. "HD DVD will make things like menu function much better, but HD requires much more authoring," he adds.
Brett Symes, facility manager at Ascent Media's DVD house Stream, believes that the saturated nature of the DVD market means "there are only so many special editions you can push and, from a consumer electronics point of view, the market has bottomed out". He's more excited about HD DVD peripherals, such as Bright Things' interactive console, The Bubble, which works in conjunction with a DVD player.
Symes speaks for many when he identifies HD DVD's main problems as being the lack of "any ratification of format. Also, we need the public to actually see HD in order to raise their expectations and the prices of HD-capable screens need to fall. This will very much depend on the rollout of HD by the BBC and Sky".
Contribution to bottom line now: 4.4/10
Contribution to bottom line in the future: 6.4/10
Tapeless technologies promise a seamless media workflow, from ingest through manipulation to storage and finally delivery. But the jury's still out on how feasible an entirely tapeless, large-scale media environment is.
Post houses, as The Farm's Klafkowski says, "are all about being tapeless anyway: we take people's tapes, digitise them, manipulate them and then give them back".
However, there is a sea change afoot as many clients are not looking to be provided with a finished programme but a digital file which can be reversioned to mobile phone or the internet as easily as for broadcast.
Stream's Symes has noticed "a dramatic upswing in demand" from clients wanting to digitise their archives. Encoding, storage and management used to be about future-proofing, but now the future has arrived, he believes, and clients want their content to be usable on new platforms.
At St Anne's Post, Williams sees tapeless as being inextricably linked with HD work. "Clients appreciate the fact that they can take any acquisition standard and plug it into our tapeless workflow. It also makes life easier for them as they don't have to worry about keeping track of multiple versions or keeping track on where tapes have got to," he says.
St Anne's has its own system of tapeless workflow and Williams estimates that in the past 18 months the facility has completed between 10 and 12 films at least partly tapeless.
However, there is an argument that tapeless technology on a grand scale could be technology for technology's sake. "Everyone thinks that tapeless will save them money; the belief is that the cost of storage will be offset by the accessibility and reusability of the data," explains DGP's Bray. "But like all new technologies, it'll actually create more work at first. Each clip must be ingested, saved, named and branded - and the quality of this metadata is crucial."
Even a small discrepancy between clip names, she points out, will mean the data could become inaccessible. Yes, there's money to be made in digitising the data, but vast amounts of storage are needed as well as a very capable network or broadband set-up, she warns.
The VTR Group's operations director Neil Lane also counsels against a rush towards large-scale tapeless working where it's not needed. "To go tapeless you need to introduce a whole set of new workflow values and you could end up needing twice as many people," he warns. It's as an internal way of moving information around VTR's group of companies that Lane sees tapeless's greatest value, but for external projects "people find real reassurance in having a tape to hand".
Outside Soho, Sumner makes the point that tapeless technologies could be particularly important in encouraging work out to the regions. If the BBC does make its much-vaunted move to Manchester, "then the promise of tapeless working could be absolutely central", he believes. "We need big pipes and big infrastructure to make tapeless happen, but as a reason to attract business to the regions it could be really important."
Contribution to bottom line now: 3.7/10
Contribution to bottom line in the future: 7.3/10
With media needing to be available for use on a variety of different delivery platforms, storing and tracking each element for retrieval is becoming increasingly important. Digital asset management is something most post houses already employ in some form but with some investment there's the scope to act as a host and portal to vast amounts of valuable content.
"Digital asset management is hard to separate from tapeless workflow: it's like the wrapper that surrounds it," Stream's Symes believes. "If you're encoding thousands of files, they all need to be tracked and managed." Stream uses a bespoke system written by the company's own in-house team. "We didn't want an off-the-peg system because each client wants something different, and we didn't want to be beholden to developers - we can be more flexible," Symes says.
The Farm Group also has developed its own software for logging and storing footage, and placing it for remote viewing by clients. "We anticipate our library will change in future and we'll become more of a gateway for material," says Klafkowski.
To make the move into offering digital asset management as a money-making operation, the Strong Room's Kelly says he'd "need to see European broadcasters airing more HD content". With HD creating bigger files, Kelly could envisage a time when the company might offer clients access to a Raid-based server, alongside in-house back-up. The Strong Room currently runs an Apple X-Server connected to a WebDav server, which allows users to post files online for clients and is backed up in-house. "We could bolt on added storage to this for HD content," predicts Kelly.
The VTR Group's TMR Digital was set up four years ago, in line with an envisaged boom in digital asset management. Lane says the aim was to diversify away from the forecasted falling revenues of the post business. TMR Digital, part of The Machine Room, provides digital asset management systems for a range of purposes, including print, "brand guardian" services such as style guides, as well as website hosting. Lane estimates the company already provides up to 10% of the VTR Group's overall revenues and he believes this will only increase.
Contribution to bottom line now: 4.25/10
Contribution to bottom line in the future: 6/10
With programmes like Final Cut Pro making it ever easier for clients to take a certain amount of the post process in-house, is it worth railing against the inevitable or could it pay to help those same clients as they get to grips with new kit? According to The Farm's Klafkowski: "Support and consultancy is the single biggest growth area. Post isn't just about selling people access to your hardware, as it might have been years ago when kit was so expensive as to be completely inaccessible. Now, the main thing you're selling is access to your creative talent and solutions to production and post problems - either in the facility or out on location."
The Strong Room has expanded its tech support department and expects it to be "a major focus for 2006", according to Kelly. At St Anne's Post, Williams advises clients to seek advice well before they start shooting.
"There seems to be a perception that post houses are looking to rip people off on HD post: there needs to be more trust," he believes. "If people would come to us before they start shooting in HD they would save themselves a lot of disappointment and realise how their budget will affect them in post."
"When change is coming, the best thing is to try and work with it," says The Mill's Barmer. Ad agencies are increasingly looking to develop more post capabilities in-house, and so four clients: BBH, Ogilvy, Lowe & Partners and Publicis have installed "mini-Mills" in their buildings. These are Flame suites staffed by Mill employees, connecting back to The Mill and integrated with the AV department of the ad agency. "This kind of arrangement works well on high-volume jobs, where you could be producing 30 different language versions of an ad," says Barmer. "For the agency, it means your creative director takes 10 minutes to sign off an ad, instead of taking hours getting across London."
Contribution to bottom line now: 3/10
Contribution to bottom line in the future: 6/10