Hard Times Trickle Down Onto Companies That Film TV Commercials

Perhaps nobody knows better than Norman Barnett just how tough times are in the TV commercial production business.

As general manager at Raleigh Film & Television Studios, Barnett books the studio’s 12 stages to production companies that film TV spots for everything from Nissan cars to McDonald’s hamburgers.

In a good year, the Hollywood-based studio’s stages are booked nearly 90% of the time. But in 1990, the number of TV commercials being filmed plummeted, and the stages were only 60% to 65% booked.

“Times are definitely changing,” Barnett said. “If we have another year like this, I may have to rethink my marketing and diversify more into a studio that produces more features.”

The slow economy has pushed the advertising business into the pits, and now the effects of the ad slump have spread well beyond the advertising agencies that create the ads. They are reaching deeply into the companies that film them. These days, with fewer and less-expensive commercials being filmed, executives at the dozens of TV commercial production companies in the Los Angeles market must find creative ways to save a buck--and make a profit.

HKM Studios once provided free cellular phone service for clients to use on its commercial sets. But now, says Larry Morris, chief financial officer, “if you want a cellular phone, you’re paying for it yourself.”

And instead of always picking up the costs of client tapes that the studio constantly sends cross country via overnight mail, said Morris, “we’re asking clients if we can use their Federal Express numbers.”

Some say they are lucky to have clients at all. “Every time two corporations merge, that’s one less advertiser,” said Henry Holtzman, president of Holtzman Productions, which films ads for Big Boy restaurants. “Fewer advertisers means fewer commercials being shot.”

Top ad agency executives agree that clients are asking them to do fewer ads. “A lot of advertisers are making their commercials last longer,” said Kenneth Olshan, chairman of the New York ad agency Well, Rich, Greene. And, notes Graham Phillips, chairman of Ogilvy & Mather, “consumers are likely to see the same commercial on the air for a longer time.”

As a result, production companies must work much harder to dig up new business. A few years ago, Wright Banks Films, a mid-sized commercial production company in Westwood, won about six of every 10 bids that it made to film TV spots. Now it must bid 10 jobs to win two.

“I’ve sat around wringing my hands about as much as everyone else,” said Steve Banks, president of the firm, which has filmed a number of Shell “Answer Man” TV spots. “There are too many film companies and directors for the amount of work that’s around. Stuff is put under such a microscope now that I’m sometimes amazed any commercial gets produced.”

At the same time, advertising agencies are paying the companies less to film the ads. Production company margins have been squeezed enough to force some firms to consider merging--or even closing their doors.

“Just as the country could eventually end up with four airlines, we could also end up with just four major commercial producers,” said Ted Goetz, president of Murray Blum Moving Pictures, a Studio City production company that has filmed ads for Mazda.

Earlier this year, three independent production companies banded together to form Santa Monica-based Partners International. They share office space and administrative costs.

“There are going to be a lot of TV commercial companies that go out of business,” said Michael Romersa, managing partner of the company that has filmed ads for Pepsi and Bud Light. “Even the strong ones are having a hard time right now.”

The man who oversees the trade organization that many commercial producers belong to is also pessimistic. “There will be a lot of marginal production companies hurt very badly,” said Bill Perna, president of the Assn. of Independent Commercial Producers and executive producer at Smillie Films, which has filmed commercials for GTE and Maxwell House. “I can assure you, our company isn’t going to get into any high-risk activity in 1991.”

One Hollywood agent who books jobs for a dozen commercial cinematographers says things haven’t gone completely down the tubes yet--but she isn’t sure about 1991. “I’m advising caution,” said Judy Marks, co-founder of Cheriff/Marks Agency. “I’m warning the people I represent not to go out and buy those second vacation homes.”

Della Femina Bucks Retrenchment Trend

At a time when many Los Angeles ad agencies are struggling for new business, Della Femina McNamee’s local office has won yet another big account.

Last week the firm picked up $8 million to $10 million in annual billings after being handed the ad business for a yet-to-be-disclosed new hand-held video game from Sega of America. Advertising could begin as early as January.

Della Femina’s Los Angeles office--perhaps best-known for creating the Joe Isuzu character--has won $57 million in new business this year. All of it is from new clients. Executives say they plan to hire additional junior employees, such as account executives.

“The best way to grow an agency in a recession is to win new business,” said Peter Stranger, president of the agency. “We’ve been fortunate to win a bunch this year.”

Four Developers Pick Orange County Agency

With real estate development still growing in places such as Hawaii and Las Vegas, an Orange County advertising agency has recently landed $6 million in new business from four developers.

Among clients that Newport Beach agency InterCommunications has recently picked up are McCormack Properties Ltd., a developer on the island of Maui, and Summa Corp., which is developing a master-planned community in Las Vegas. The firm also won new business from two developers in Orange County and Bakersfield.

Besides advertising, the agency will also create everything from logo design to direct-mail brochures for the new clients. To help with the new business, it plans to add five employees to its staff of 35, said Toni Alexander, president of InterCommunications. “We’re a little-known entity that some day people will know.”

Movie Previews Shown at Mall’s Food Court

Shoppers who visit the Westside Pavilion’s third-floor food court might feel a sudden urge these days to buy popcorn and Milk Duds.

A half-dozen major film studios have recently begun to broadcast film previews on a giant screen in the food court. The reel of 15 film previews for such flicks as “Bonfire of the Vanities” and “L.A. Story” runs for more than 30 minutes.

“It’s a natural setting for previews,” said Rudy Melnitzer, whose Larkspur, Ca.-based firm, Cinema Preview Center, eventually hopes to install these giant screens in mall food courts nationwide. “The people are all seated there looking for entertainment.”

No advertisements other than movie previews are shown, “and they never will be,” insisted Melnitzer. The potential audience at the mall: about 1 million shoppers monthly.

2,000 Seek to Land ‘C&R; Man’ TV Spot

What a difference a contest makes.

Executives from C&R; Clothiers, the men’s clothing chain whose ads feature models parading around to the tune “What a Difference a Day Makes,” say they have so far received more than 2,000 entries from men who want to star in a future “C&R; Man” TV commercial.

The competition, open to men 18 and older, was launched Oct. 22 and ends Dec. 24. Entry forms may be picked up at one of the chain’s 70 stores in California and Nevada.

C&R; has received entries from men ranging from college age to retirement age, said Dianne Thomas, vice president of marketing at C&R.; And the personal interests of applicants range “from lambada dancers to chess players,” she said.