UK and US production associations reveal the impact the virus is having on their respective industries and the actions they’re taking to protect themselves, write Alex Reeves and Addison Capper
Steve Davies is the chief executive of the Advertising Producers Association (APA), the UK industry trade body for advertising production, VFX, animation, music, editing & sound design companies. In his position as president and chief executive officer of the Association of Independent Commercial Producers (AICP), Matt Miller is his counterpart in the USA. LBB’s Europe editor, Alex Reeves, and Americas editor Addison Capper chatted with the pair about how the coronavirus outbreak was impacting local production companies and what kind of advice they were offering to association members.
LBB> What sort of effects have APA and AICP members started seeing from the coronavirus outbreak?
Steve> It is a very difficult issue. We have created an addendum to the production contract, that provides that the agency (and through them the client) meets relocation, postponement or cancellation costs of the production company. The aim of that is clarity and for the client to understand and be able to assess the position and make an informed choice to go ahead with the production, make changes to it to reduce the risks or put it off.
We want productions to go ahead, of course. This is critically important as we have had a fragile recovery this year (one month between Brexit becoming clearer and Coronavirus arriving!) and can’t afford a fallow period.
We are keen that everyone sticks to the closest thing we have to objective advice - the World Health Organisation and the Foreign Office. They only advise against travel to China and 11 villages in Italy. So that is all that should be affected. In reality though, some clients and agency groups have decided staff cannot fly internationally, so shoots are being cancelled which are not affected by coronavirus.
Matt> There’s a lot of caution. Production companies are generally looking at variables and planning accordingly, that’s a normal course of action. The problem is that there are so many variables right now. Obviously people are being prudent and trying to foresee any issues and mitigate them as much as they can when planning a production, or even more so with productions that were already planned. It seems that both corporate policy on the agency side and the client side is what’s going to dictate what’s permissible and what’s happening, so a lot of what production companies have to be doing is reacting. They seem to be the things that are moving at a very rapid pace day-to-day.
LBB> Could you share any cautionary stories so far?
Steve> A company is shooting in Italy, considers moving the shoot, which is four weeks away. Where should they move it to? It’s impossible to advise, as the spread of the disease is unknown, but it is possible to replan or rewrite to minimise risk - e.g. by keeping the shoot in the UK, using UK talent etc.
Matt> Anecdotally I am definitely hearing that there are companies that are at least being directed to investigate keeping things domestically in the US. At least at this point in time the outbreak in the US has been much less so than in other parts of the world. But people don’t know exactly what is going to be going on or how quickly this thing can spread. International travel seems to be something that people are shying away from. I see a pattern in clients, agencies and production companies coming to the conclusion that, even if they were investigating or planning to shoot abroad, they’re looking at some domestic solutions instead. I haven’t heard a lot of cancellation type things as of now. That doesn’t mean it’s not happening.
LBB> When it comes to productions being cancelled, what is your general advice to companies?
Steve> Discuss the alternatives with the agency and, if none, advise them on what their contractual entitlement to compensation is.
Matt> We wrote a memo to our members last Friday which, on this issue, seems to feel like a world ago. But we have cancellation guidelines that have been in existence and generally accepted for decades. The guidelines deal with cancellations that are kind of no different to this. It’s a health aspect as opposed to many of the forced cancellations that happen, but with this pandemic background to it, it’s a little different. But ultimately when you strip it down they’re very similar. What we’re dealing with are issues that are unexpected and uncontrollable and out of the hands and reasonable planning of anybody.
LBB> How would you advise companies who haven't yet been hit to prepare for the effects of the outbreak on their business?
Steve> By ensuring they talk with their clients up front, plan for each eventuality and minimise risk - all things that production companies are expert at. Coronavirus is just another production issue - a big one but production companies’ problem solving skills can keep everything on track.
Matt> The advice that we’re giving shouldn’t be out of the ordinary. We’re telling people to take very active measures. Since cancellations and postponements that are directly related to the outbreak will be considered a ‘force majeure’, it’s very important that everyone is on the same page going into it - the client, the agency, the production company - and everyone knows what they’re in for when they’re looking at a plan or proposal. People should always be doing this but even more so when we have an issue like this. It's even more important that everyone understands that, if something were to happen, that a force majeure issue is in place. Therefore the client is going to be ultimately responsible in scenarios where insurance wouldn’t cover expenses for cancelling.
It’s even more important right now that everyone truly understands what those guidelines say and what any risk factors are, and that they work together with smart people and be prepared to stand up as businesses and deal with it accordingly. That’s similar to what we issued to our members last week and it all still stands. The problem is that it’s getting more complicated as the days go on because there are more corporate limitations. Some of that can make things more complicated but some of that can make it much easier too. You have black and white limitations that are being put in place by either agencies or clients about what they will or will not allow their employees to do. Business can still go on but everyone just has to go into every aspect with eyes wide open and be as prudent as possible and mitigate as many risks as you can.