Hopelessly Romantic: The Business of Commissioned Videos Destroys Itself

price war order video order production
Illustration: Katerina Limpitsouni

No video production company has the right not to be undercut on price by a competitor. This is to be accepted as long as the wiser does not make himself the fool, writes Carlo P. Olsson.

The market economy has it all. The strongest wins. In this the system resembles Darwinism, in which the weaker is not allowed to survive in the long run.

The winner can only be the best, in the digital economy also who is more agile or faster than his competitors, or who scores with the better price-performance ratio.

Unfortunately, the business with video productions brings it with itself that mostly before the finished product only the price, but not the achievement, can be judged competently by the Nachfrager. Too many clients don’t understand enough about the “ingredients” needed to make a successful video. Even less do they understand the complex interplay of the success-relevant drivers that ultimately make up a high-quality commissioned film.

As a result, those suppliers who define themselves by price rather than quality are increasingly ahead in the market. Here a fast-paced video with the best scenes from previous commissions, there a slick PowerPoint presentation with an agency look. Many customers are inspired by such window dressing and believe to recognize professionalism in it.

In theory, such misbehavior should not be a problem because it is self-correcting: if the video production cannot deliver on its customer promise, the customer will simply choose another provider in the future.

In practice, it looks completely different.

On the one hand, new film productions are popping up on the communications landscape every day with the tenacity of biting flies. Anyone and everyone can call themselves a producer or director. If you forego a holiday for once, you buy a film camera with the budget you save and set up the best of all possible film production companies with friends. Hopeless romance is one of the main drivers of the cutthroat price war in the video business.

On the other hand, herein lies the second reason for the murderously low prices, companies have no memory. In corporate structures, contact persons and decision-makers for video productions often change their function after a few years. This also means that existing relationships lose their validity and – somehow, after all, the new job holder has to distinguish himself – the door is opened for new providers with an “optimised” price structure.

Video production companies can subsequently undercut each other on their prices until they run out of steam. Whereupon, as in the case of snack bars, a dozen new suppliers immediately appear on the horizon, who continue to twist the price spiral as unencumbered as they are cheerful.

In the long run, this leads to the moving image losing power compared to other media. Video companies that do not generate reasonable revenues are not in a position to employ, let alone train, well-trained employees. The principle of “one chief and many Indians” is becoming increasingly widespread in Germany. But where interns make films, the films look like they were made by interns.

For years, professional associations and film organizations have been trying to put a stop to the industry’s ruinous self-cutting. So far without success. Because many newly established film companies don’t want to know about self-regulation and don’t like to commit to a code of conduct as a member of organizations.

However, it is also a fact that the trade and professional associations in the DACH region have not yet succeeded in establishing their own seal of approval for their members on the market, which, with its unmistakable appeal, guarantees quality and is perceived as such by potential clients for video productions.

Interestingly, recent research has scientifically proven that Darwin was only half right: it is not the stronger species that survive in the long run. But those who are capable of intra-species cooperation.

Perhaps swarm intelligence – now that contract producers have gone from lion to ant – will eventually reach the minds of video producers and contract filmmakers. It is to be wished for the wonderful communication tool that is film and video.

This article was automatically translated into English using AI. If you would like to help us improve the quality, we would be happy to hear from you.

Carlo P. Olsson
About Carlo P. Olsson 138 Articles
Carlo P. Olsson begleitet die Herstellung von Filmen, Videos und TV-Serien im Auftrag von Unternehmen, Agenturen und Produktionsfirmen. In seiner Freizeit spielt er Eishockey und beschäftigt sich mit barocker Klangdramatik.

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