Commercial production rises to the challenges of Covid-19

Covid 19 has had a dire impact on the commercial production sector in South Africa but the good news is that the industry is turning the corner.

The Commercial Producers Association of South Africa (CPA) recently commissioned a survey on the impact of Covid-19 on the industry.  The CPA surveyed 36 member companies who compared their level of activity from March to August 2019 to the same 6-month period this year.

The results show that production on 73 local and international commercials, with an estimated value of R200 million, were cancelled as a direct result of the pandemic.  An additional 28 commercials were postponed, of which only 5 have gone into production since the industry re-opened under Level 4.  The companies surveyed reported that they had lost additional opportunities and resources to the value of R170 million due to Covid-19.

In the period under review, the number of local commercials produced declined by 40% with turnover down 52% and shoot days down 55%.  International commercials saw a 60% decline with turnover dropping by 59% and shoot days by 68%.

The saving grace for the service sector was that Covid arrived in South Africa towards the end of the foreign commercial season which meant the drop off in work applied to a far smaller number of commercial than it would have if it had started at the beginning of season in Spring 2019.

Commercial budgets have also been significantly impacted by Covid-19.  Local commercial production companies have reported a 15% to 20% drop in budgets (despite additional costs for Covid compliance) while the budgets of international commercials have increased due to the costs associated with remote streaming (where foreign clients are able to view in real time both the material that is being shot and the action on set from their own homes or offices) and the additional costs of complying with strict Covid protocols.

The situation is made worse by increased risk in the industry as it is not possible to purchase insurance for any Covid related claims. In addition to this production companies have reported many other factors that have impacted negatively on their businesses. Most common are a loss of income, opportunities, staff and resources, clients not paying and the devastating impact Covid has had on freelancers working in the industry.

Despite the many challenges the industry has done a great job of working together to get through Covid-19. Companies have collaborated, shared ideas and resources and come up with creative and ingenuous ways to continue making commercials.  This has seen an increase in the number of local commercials produced over the last few months and, although the production environment remains very challenging, there is optimism that work will continue well into December and the New Year.

The service side of the industry is in a more precarious position – although some clients have used South African directors and remote streaming with great success there remains a degree of unpredictability.  The opening of South Africa’s boarders on 1st October was a great step in the right direction and we are now seeing more international clients bringing their jobs to South Africa. The recent increase in Covid infections in the Western Cape is cause for concern but we are hopeful that this can be contained to ensure the impact on the industry is minimal.

The CPA aims to repeat this study next year to see the impact Covid-19 has in the medium term.  It will provide greater insight into the effects of the pandemic on the service sector and indicate if local business has returned to previous levels.  When asked to predict the time it would take for production companies to recover from the impact of Covid 19, 40% of respondents said that they were not sure as things are too uncertain, 30% said 3 to 12 months and a further 8% said 12 to 24 months. A fortunate 3% said that business was better than ever.  No company owners thought that their business would not recover which is cause for optimism as we head in to 2021.

The CPA wishes all our clients, suppliers and partners health and prosperity in 2021!

This article was first published in the Gauteng Film Commission’s Newsletter, Dec 2020