edition 21 feb 10 2004

the impact of the strong $AUD


The strong Australian dollar has had an impact making imports more attractive and exports less attractive. In the same way it has had an impact on television commercial production in Australia.

But before you run off and have the agency produce your commercials overseas, in this edition of P3 e-news we look into the benefits and issues with off-shore productions.

P3 À helping people achieve commercial purpose through creative process

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television production update

Increasingly more Australian film companies and agencies are looking off-shore for cost effective shooting locations, such as South Africa and the Czech Republic and to a lesser extent New Zealand. But why?

Exchange Rates
While the dollar is higher against the major currencies such as the US Dollar, the Pound and the Euro, the cost of producing televisions commercials is more affordable. The issue for Australian advertisers is that many agencies and film companies will include a contingency for exchange rate fluctuations within their estimates to ensure that they are not exposed to changes during the production. But likewise, it is important to ensure that either positive change will lead to a refund or the cost is locked in at the time of approval and that the contingency is removed.

Cost Advantages
South Africa and the Czech Republic offer excellent value in two key areas:
1. Crew costs - film crews areconsistently lower in cost than local crews and they work longer standard days before overtime is incurred.
2. Talent costs - Both markets have access to a huge pool of talent due to the proximity to Europe, especially during the summer seasons in each market. The combination of the current exchange rate and the higher competition means that rates are typically lower than Australian talent and even New Zealand.

Cost Penalties
The main issues that advertisers should be aware of are:
1. Travel - These locations can be expensive to travel to and so any estimate should clearly state the agency and film company travel costs. Also, do not overlook the advertiser costs if you intend to attend the shoot.
2. Travel Time - Directors and producers will typically charge for travel days to and from the location, above and beyond the shoot days. Likewise, agency supervision hours can be higher due to extended travel time. But in most cases the agency will waiver these additional charges for the opportunity of shooting overseas.
3. Facilitation fees - If using an Australian production company, you will find that they will use a "local" film company in the country of shoot to facilitate the production. This means that the locals organise the shoot and pay the bills locally with a mark up of typically 10% - 15%. Then the film company may apply their own production fee mark up on top of this.

P3 Advice
Shooting overseas can be cost effective for shoots with high numbers of talent or a particularly long shoot of 3 days or more. But before approving a shoot overseas, make sure:
1. you understand the costs you are paying including any contingencies.
2. the agency identifies where the savings have been achieved over a local production.
3. the agency have explored all local options and that they are comparing like for like.

If in doubt as to the advantages and risks, contact P3TV for a full 48-hour assessment of the proposed production.

test p3tv on-line for yourself

 

Want to try out the P3TV benchmark
application for yourself? Now you can
with our free on-line demonstration.

Just go to www.p3tv.com.au/app

Advertisers enter username client
Agencies enter username
agencyproducer or agencystaff
Film companies enter username
producer1 or producer 2

  

And all have the password demo.

Try it out for yourself. If you need help simply click the HELP button on any page.

If you enter an estimate remember this is an open demo section of the applications so we cannot provide any security. Therefore just use the time to check out how it works and what it can do.
     
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television production workshops
 
 

Want to know more about television commercial production?

For the majority of marketers, television production is a complex and technical aspect of advertising and often the single most expensive cost after media.

P3 is planning a P3TV half-day workshop for advertisers to be held in late March in Sydney and Melbourne.

If you are interested in attending, email your details to tv@p3.com.au  and we will send you details regarding the workshop.
 
 

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