AICP Survey Tracks Key Metrics for Commercial Production

AICP Issues Results for 2009 Member
Survey of Commercial Production Trends

Matt Miller, President and CEO of the Association of Independent Commercial Producers (AICP) has announced the release of its seventh annual Survey of the Commercial Production Industry.  The study, conducted by research firm Goodwin Simon Strategic Research, measures industry trends and activity in commercial production.

“The data collected offers a detailed picture of how and where the billions of dollars in commercial production activity were spent in 2008,” Miller says.  "Clearly, these numbers will be quite different when we field 2009 data, but they give a good snapshot of the trends and challenges shaping our business."

The survey quantified the economic impact of commercial production, the centers of commercial filming activity by AICP member companies; calculated production outside U.S. borders; and measured industry responses to a number of key issues that impact the financial health of the industry.

This year's member survey explored developing trends in both the production of advertising using digital production techniques and for developing content for nontraditional marketing communications vehicles by AICP members. "Our industry continues to evolve, with a continuing trend in our industry toward utilizing digital techniques to create original content," Miller notes. "The survey shows that two-thirds of our member companies produced marketing communications outside of the traditional commercial in the past year.

“Our members are on the leading edge of creating new forms of advertising and marketing in the moving image, and are now devoting about one in six shoot days to projects such as web films, product integration pieces, and mobile content,” Miller continues.  “While this trend has remained constant since 2005, we expect this figure to grow, as evidenced by this data and the surge of interest in the AICP Next Awards.”

Among the highlights of the study:

--AICP members spent about $2.51 billion dollars in direct production expenditures in 2008: Roughly $2.16 billion spent in the United States and $352 million spent overseas. This includes $2.42 billion spent on live action production, with $94 million on in-house digital production. When factoring in postproduction, talent payment and other indirect expenditures, commercial production represents a $5 billion industry.

--Commercial producers are deeply involved in creating nontraditional advertising:  Nearly seven in ten (66 percent) of members produced "nontraditional advertising projects outside of the traditional television commercial" in 2008.  The survey found that the most common format for such projects was an internet or broadband viral, followed by original content (branded entertainment).  Visual effects and animation accounted for the largest shares (26 percent each) of the digital-production techniques AICP members used in 2008, followed by graphic design (21 percent).

--Commercial producers anticipate swift growth in projects for new and emerging media channels:  At present, producers estimate that about 24 percent of their billings comes from nontraditional projects.  But they estimate that by 2013, on average 40 percent of their billings will be from such projects.

--2008 sees continuing trend towards domestic filming activity:  Eighty-eight percent of all reported shoot days took place domestically, with 12 percent taking place abroad.  This represents a decrease from the 23 percent of shoot days that were abroad in 2005, and the lowest ratio for shoot days overseas since this survey’s inception in 2002.

--Southern California remains the most popular location for commercial shoots:  Just below half (48 percent) of all shoot days—a figure that includes both shoot days in the US and those abroad—took place in Southern California, with 45 percent of those occurring in L.A. County alone, with New York a distant second with 15 percent of all shoot days.  Looking at domestic shoot days only, 54 percent took place in Southern California in 2008, compared to 17 percent in New York.  This ratio of location shooting has remained largely unchanged over the survey’s history.

--Latin America ranks at the top of international locations for the 2nd straight year:  In 2008, Central/South America remained the most frequent non-U.S. location for shoots, with 5 percent of all shoot days (and 37 percent of all foreign shoot days – up from 26 percent in 2006), leading Canada again, which had previously been the most popular international destination for shoot days prior to 2007.  The study contends that this growth has come mostly at the expense of Europe and the UK, as well as Canada (Vancouver in large part) which has seen a decline from 24 percent of foreign shooting in 2002 to 14 percent by 2008.
 
--Significant filming activity occurs outside of traditional production centers: In 2008, about 20 percent of all shoot days, and 26 percent of domestic shoot days, took place away from the major production centers of New York, Illinois and Southern California.

“This study annually provides an eye-opening look at trends in commercial production,” Miller concludes.  “To succeed in a competitive environment, access to information that paints a true picture of where and how business is happening is paramount. This survey provides that resource, and we hope it will be a valuable tool for our members in making business decisions as business models shift, and at the same time educate policymakers and others about the economic importance of commercial production."

Published Feb. 17, 2010