top of page
Family - A Seattle Advertising Agency

Why Traditional Production Companies Will Not Survive

Seattle Production Company

The production world isn’t changing – it has changed. And there will be winners and losers.

Companies need more and more videos every year to satisfy the insatiable appetites of audiences on YouTube, Facebook, Instagram and Snapchat. They need them for their websites, landing pages and email blasts. They need them for presentations, pitches and the next big marketing trend right around the corner. It would be insane to pay for all those videos at what production companies charged 10 years ago. So, unwilling to increase their marketing budgets, companies are willing to fudge on quality or pull all production in-house.

Today, many people are working twice as hard for half as much money. Mid-range budgets are gone and it’s a bloodbath for the scraps. The fight is even squeezing high-budget commercial productions. The market has spoken: Evolve or die. No one is looking for a creative. They're looking for creative intelligence in their marketing, how to apply creative to emerging technologies.

The following is gleaned from a presentation I’ve given to production companies, studio heads and business owners at least four times over the last three months.

Here are your options:

  • Do nothing

  • Sell the company

  • Sell more to existing clients

  • Expand into new markets

  • Explore niches in your current market

  • Create a new product

Business Marketing

There are a lot of basic questions folks at production companies need to start asking themselves, like:

  • Who’s in charge of sales?

  • How much is your annual marketing budget?

  • Have you written down your marketing strategy?

  • What CRM system are you currently using?

  • What are your loyalty programs?

  • How many networking events do you go to each month?

  • Is anyone doing public speaking about storytelling?

  • Are you marketing to Seattle, or marketing to the country?

  • How are you adding value in a way that differentiates you from everyone else?

We all need to start thinking like marketers.


Instead of marketing to Seattle, you should be marketing to the country. An account-based marketing solution targeting agencies and decision-makers at corporations makes a lot of sense in the long term.

However, getting professional representation is going to be an instant difference-maker. But before you approach reps, you should showcase your storytellers and directors on your website. The reps want to understand the voice they’ll be pitching, and want to link to their work. Many specialize, but plenty of them represent a broad assortment of styles. Finding the right fit is as tricky as an actor finding the right agent.


Find a niche that distinguishes you from the competition. Sally Hogshead coined the term “Different is better than better.” The mistake a lot of production companies make is trying to be everything to everyone – thinking they’ll be in contention for every job. The mistake is that this might get you considered, but when the client is making the final selection, all the companies being considered are just as good as you. The company that distinguishes itself is the one that usually gets the job. So, different is better than better.

The following are examples of how production companies are distinguishing themselves:

Content Studio


I believe it was Albert Einstein who said we cannot solve problems using the same thinking we used to create them. So stop flailing. Focus on innovations that make your company stand out, and then pivot.

Look for opportunities in blue oceans rather than red oceans. Right now you’re probably swimming in a red ocean, filled with sharks eating each other. Look for possibilities where there are fewer competitors: calm, blue oceans.

  • Don’t start with an idea. Start with an opportunity.

  • Identify the value you’re going to be adding in the process.

  • Don’t bet on one thing. Spread your bets out and see what proves to be profitable.

Think of this innovation as the R&D (research and development) of a large corporation. R&D is the lifeblood of many corporations. As a business, when you cut R&D you’re lying down to die. Right now, if you’re not innovating, you’re dying.

Content Marketing


Production companies struggle to generate a 1.5 multiple of their costs. Agencies are paid a multiple of around two. But management consultancies generate five times their costs. Adding a consultant fee would be a profitable line item and influence how the budget is allocated.

Agencies are bringing production in-house. Folks are creating agency/production hybrids. Pepsi and Coca Cola have their own studios to create original content. Think about doing the opposite and adding an agency on top of the production company, charging for strategy as well as execution.

What about a strategic alliance with a local agency to become their in-house production engine, for a monthly retainer?

Digital Kitchen Chicago designed the interior of The Cosmopolitan in Las Vegas and won a Cannes Grand Prix. What might you be able to design?

Out of home is able to accomplish more and more through digital billboards. These are nothing more than the combination of technology and video. Approach companies like Posterscope about becoming their digital solution.

There are several high-end crowdsourcing options that are looking for high-caliber talent.

Target companies that just got funding from venture capitalists and angel investors. These fledgling companies are usually given money with the express intent that they are going to market themselves to the world.

Indiegogo is another source of leads for companies that just got funding. Networking with Pioneer Square Labs would be a good idea, because they could steer their start-ups to you for production work.

Upsell additional services like the following:

  • Still photography

  • Original music composition

  • Creating style guides for clients

  • A “making of” video about the creation of the spot

Corporations are pulling production in-house, but there are preferred vendors they’re going to continue working with. Offer them long-term (relationship) pricing.

  • BECU

  • REI

  • Amazon

  • Microsoft

Who should be moving all production in-house but hasn’t yet, like local banks, hospitals and insurance companies?

Develop a brand extension that does lower-quality/lower-price work.

There are small production companies popping up every day. For a set fee, offer a “premium pass” at your company that makes an average video look and sound exceptional. You’re basically recruiting your competition’s sales team to find work for you.

Create videos at cost plus a percentage of the business. This would be ideal for a marijuana retailer, edibles producer or grower. As they grow, you become more profitable.


Some of these initiatives might become expensive. There are new crowdfunding sites popping up every day:

Return on Investiment


There are over 20 different pricing models in today’s economy. Which one could make the difference for your company?

  • Gillette – gave away the razor and sold the blade

  • Dollar Shave Club – disrupted the space with a subscription model

  • Walmart and Fred Meyer – volume buying power

  • Costco – membership model, and they make money on the float

  • Amazon – direct to consumers

  • Go Net Yourself – subscription-based video production

There are many production companies that are thriving. But the days of placing an ad and waiting for the phone to ring are gone. This business used to be portfolios and relationships. Now, it’s innovate or die.

Mike Johnston is a production executive and advertising creative in Seattle. He is available for freelance consulting, writing and directing. Contact Mike


Want to know more about the life and death of businesses? Read, "What You Need to Know About Brand Life Cycles."

bottom of page