Yahoo News For Many Post-Production Houses, It’s Like the Strikes Never Ended
The post-strikes damage to the economy, and to the 2023 box office, have been calculated. Small businesses clinging to survival got a last-minute reprieve. The 2024 theatrical slate appears relatively stable. However, for those who live at the end of the line in post production, nothing is normal.
Post-production houses will feel the strikes well into the new year as they wait for the completion of just-restarted projects. Many of these companies have already endured layoffs, furloughs, pay cuts, or both. Those that hang on will face a changed industry with a shortage of talent, fewer projects, and payment rates expected to remain below pre-strike levels.
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“For much of the post-production industry, it gets worse before it gets better,” said Seth Hallen, president of the nonprofit post-production trade org Hollywood Professional Association. “It’s the unsung heroes in the business. They’re not doing it to be famous, they’re not outspoken. They just keep quiet and they do their work. But there are thousands of those people that are so instrumental and so hurt by all of this.”
The HPA reps thousands of individuals and hundreds of corporate clients in the post-production space. Hallen said things have been “getting real bad” since August when the HPA issued an open letter calling on the industry and the government to provide aid to the “factory floor workers.” Relief didn’t come and “the response just hasn’t been where we where we thought it should be,” Hallen said. As of the end of the strikes, the HPA estimates post-production was at 10 percent of its normal working capacity and that production won’t reach meaningful volumes until late February or early March.
“There are people who were barely hanging on, and they probably haven’t figured out if they might have insurmountable challenges or at least more challenges that they have to deal with,” said HPA board member Craig German, a former head of worldwide post for Amazon Studios. “Because how quickly will that work come back? We will get a lot more clarity because now people can actually attach dates and start going after deals and get people back on staff. But the picture is still very unclear.”
German says he’s talked to companies where work is “literally running out” and that have “nothing” on their dockets. MPC, DNEG, ILM, and more have all scaled back operations in some capacity, German says. Earlier this year, Rising Sun Pictures in Australia announced via LinkedIn it had substantial layoffs, and Goodbye Kansas, a major VFX firm in Europe, declared bankruptcy on five of its subsidiaries in October.
Some companies shut offices down during the summer or relocated to cheaper locations. Most though did what they could to retain staff because they know what happened after Covid. The industry suffered a “talent scarcity,” German said, where career professionals out of work for too long were forced to leave and simply didn’t come back. There’s already signs of that cycle happening again.
“You can’t do that infinitely if you’re in this stretch of diminishing business and uncertain futures,” German said. “It put a lot of pressure on everybody. We couldn’t just hang on to everybody forever.”
During the strikes hundreds of independent productions signed interim agreements with SAG-AFTRA that allowed production to continue, but their budgets were too small for some post-production houses: It would cost them more to staff up than to complete the project.
“It’s a dismally low figure,” Hallen said. “The impact of no meaningful scripted features and episodic being in production for six months and now for a few more months, really, is just unfathomably massive. You just can’t get your head around it. It’s just massive.”
The post industry can function only if there’s a robust supply chain of projects that post-production companies can bid for and negotiate on prices. As studios move toward major reductions in content spend, the result is “price compression” in which post houses vie for fewer shows just to get work in the door.
“It’s hard to tell how long that will last, or if it will persist and people will say, ‘That’s the new norm,'” German said. “All that really translates to more stressed companies. I think 2024 is really going to be a retrenching of what normal means because there will be companies that are gone. There’ll be new cost structures that people expect, there will be consolidations. There will be rethinking of business models for the studios and distributors.”
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