3rd March 2025
The ad industry is reeling from the collapse of the visual effects giant and its advertising arm The Mill. Green Square partner Nick Berry examines how production is changing and what will fill the void.
Many people are still reeling from Technicolor’s sudden fall from grace, going into administration with the loss of up to 10,000 jobs across MPC, The Mill and Mikros Animation globally.
Some have been quick to note that the signs were clear for all to see, and warnings such as the collapse of Deluxe Entertainment in 2019 should have acted as a wake-up call. But for most people the loss of a pioneering force with an incredible legacy, still working on the biggest movie titles and advertising campaigns in the world, is an unimaginable outcome.
Technicolor’s collapse will continue to be examined for some time. It will be correct to cite the massive impact of the pandemic in 2020, followed by the writers’ strike in 2023. But alongside those hammer blows the unprecedented acceleration in technology, automation and the power of the cloud – allowing immediate scalability without huge tech infrastructure – has resulted in the goalposts being uprooted and thrown away, as opposed to simply being moved.
Hindsight is a wonderful thing. The strength of the 110-year-old stalwart of the global movie and advertising industry was once its scale of tech infrastructure along with wonderful offices in the best creative hubs in the world. Unfortunately, this legacy technology and physical infrastructure in expensive locations, became antiquated in what seems like the blink of an eye.
All of that said, there can be no question as to the creative quality and talent employed across MPC, The Mill and Mikros Animation, each responsible for iconic work and setting the gold standard across entertainment and advertising right up until the end.
My thoughts go out to all of those directly impacted as there will inevitably be life-changing ramifications for many people.
For Technicolor’s peers there will be an immediate gold rush opportunity. There are massive movie and advertising projects now in limbo with panicked clients needing quick solutions. There will also be an injection of much sought after talent into the market.
As the dust settles, however, I would bet my bottom dollar that the energy, creativity and hunger released into the marketplace, not least from those displaced from Technicolor, will result in a new exciting era for the creative production industry, and further market fragmentation seems inevitable.
Smaller independent production houses now armed with scalable cloud-based VFX technology pipelines, lower overheads, access to cost-effective global talent networks that can work seamlessly on projects wherever they are in the world, now have a wonderful opportunity to blaze a new trail.
I will also bet on there being a surge of new startups from ex-Technicolor staffers, ready, willing, and able to feed on the insatiable desire for content.
So, the King is dead, long live the King(s), along with the princesses and princes…
The demand for content across the entertainment and marketing sectors is unrelenting, and in industries driven by craft and innovation, change is the only constant. The question is how production houses can maintain workable margins while still prioritizing and safeguarding creativity.
Technology and the cloud have gone a long way to leveling the playing field for smaller independent players. Established divisions and snobbery between different forms of production output are being discarded. Many production companies now seamlessly work across different genres of entertainment and advertising as opposed to being pigeonholed. When managed well, this agility can mean added resilience and opportunity.
Compared with a decade ago in the advertising world, production studios no longer feel completely subservient to all-powerful agencies of record. Nearly all production houses now confidently call themselves “Creative Production Studios.” They have less fear of the established advertising agencies when approaching brands directly to offer creative ideation and strategy, as opposed to staying downstream in the shallower waters of execution and post-production.
Those that don’t change their operating model may well struggle in the brave new world, but the inherent strength of the US entertainment and advertising markets will be fertile ground for existing and new progressive creative production houses to flourish.
The same can be said for the UK, where the incredible growth in new studio facilities can’t be ignored. Increased capacity along with unquestionable levels of talent, is leading some to predict that by 2027, once Sunset Waltham Cross studios are fully open, in addition to established facilities at Elstree and Leavesden, Hertfordshire alone will produce more long-form movie content per year than Hollywood. It’s a shame there’s not many hills in Hertfordshire to put a big sign on.
So given the demand and foundations exist in the US and UK, the vital factor in shaping the future of creative production across entertainment and advertising is the shift in balance between artist and technology. Technology is clearly now leading the way, with AI at the vanguard.
Artists and producer roles must pivot to manage and harness technology to maximize creativity and efficiency, as well as communicating the art of what is possible to clients in a tangible and meaningful way. The creative production studios that crack this code to maintain healthy margins and protect the perceived value of creativity will be the winners.
As sad as it is to see the loss of Technicolor and its family of incredible creative studios, I eagerly await an array of new superstar creative production houses stretching the boundaries of visual effects even further, to fill the void left by Technicolor, and our screens with joy and wonder.