Large Commercial Video Productions Are Dead (2025)

The video production industry is changing and if you don't make these changes, you're going to be left behind. Now this video was prompted by a call I had with somebody. It was actually last week. They run a successful video production company, been doing it for about 25 years. Do on average like 2 to 3 million dollars a year. Which on paper looks great, right? It looks really, really good. But what he told me is that over the past couple years he had been noticing that the amount of people doing large scale video production projects was going down every single year. And, and he went from about $2 million a year to now 8 to $900,000 a year. And we were talking and he's like, I just don't know what gives. Like, I don't know why people are not buying large scale video commercials anymore. I don't know what's going on. And the problem is, is his margin was shrinking as well. And this one concept is large scale, one time video production contracts are dead. What most video production companies would do is they would do a large commercial for a client. It would be 50, 75 people on set. It'd be a huge expense. It would be, you know, 100 could be anywhere from 100k to multiple seven figures for just one commercial. And while those are good for TV, it's not what most businesses want anymore because they're not seeing an ROI from those videos. I mean, think about it. If you were a company, would it make sense for you to spend 100,000 to multiple million dollars on one single commercial? Put all of your eggs in one basket and if for some reason that doesn't work, you're just at a loss for billions of dollars? Probably not. It wouldn't make any sense. You see, a lot of companies are moving to what we call a retainer model when they're hiring companies to do content for them. Because they don't just want one single piece of content, they want multiple pieces of content spread out across multiple months. And the reason this is important is because if one piece of content flops, it's not that big of a deal because they have tons of content to buffer that and they get more what we call shots on goal, which like if you're, you know, a soccer player, you know, would you rather kick one soccer ball? Would you rather be able to kick 100 soccer balls? Well, obviously 100, because there's a higher likelihood that you actually make it in and you're successful in that. So this is the biggest problem, right? And like I said, a lot of People are asking why? Well, I mean they're spending 100k to 7 figures sometimes on commercials that sometimes actually do flop. Now there's still some companies obviously that you see do that because you see them spend money on super bowl commercials and you know, other commercials that are on tv. But, but the amount of those companies is rapidly declining and there's even studies that show this. Right? So according to several studies including Comscore and Shopify, companies are spending significantly less on large scale commercials and they're going more towards smaller user generated or UGC content because the UGC content is actually achieving significantly higher click through rates, ROI cost per click than traditional advertising. And so as a video production company this can be concerning and it can be frustrating sometimes too because clients don't want large cinematic content anymore. They want a bunch of content and they want it on an ongoing basis. That's usually not as high quality as large scale productions. But this is actually a good thing because a lot of our clients have been shifting to retainer based models. And the problem with a lot of these larger type budgets could be anywhere between 100k to let's just say for the sake of this, a million dollars even though it does go over that. Right. So could be anywhere between 100k and a million dollars per commercial. But you as the production company, their Profit margin is anywh 18 to 20% on these large scale projects which is like not very good. I mean it's like doing 100k and then only profiting 18k off of that. Right. That's not very good and it's not a lot of margin to work with. So it's actually a good thing that companies are going away from stuff like this because they're not very high margin for video production companies anyway. And that's exactly what one of our clients Ben did. Ben used to do these large scale productions that frankly wasn't actually profiting the business any money. But there were these large involved productions that were really, really difficult to p. They took a lot of time, they took ages to close and it was just a really big problem for him and for the company and for their company. They were doing multiple seven figures and they weren't making as much money as they actually wanted to be making because of this problem. And what we did is we helped him switch to retainer based pricing to where he was able to close a 44k deal here in, in full in just 30 days. And that was for a three month package. Right? So because he had this three month package he was able to close a 44k deal. And the best part is, is he did this at profit margins, right? Huge 80% profit margins. Previously. The other work he was doing was between that 20 and 30% profit margin and it was just costing the business a lot of money. And with all the other extra expenses, it ended up eating up that margin and it was left, and it left the business in a tough spot. Now if you were going to do a project and put your blood, sweat and tears into something, would you rather make 80% profit or would you rather make 20 to 30% profit? Exactly, you'd rather make 20 to 30% profit. And this is where the industry is going in 2025. And if you don't hop on board, you're going to get left behind. This is why a lot of our clients are moving to the retainer based model. Because we're in an era where companies want content. They want a lot of content. They don't need it to be huge productions, they just want content to start getting brand awareness. They don't need these large scale productions with, you know, 25 to 75 people on them, unless they're Fortune 500 companies, which there's not that many of those anyways. And a lot of our clients are not going after them because they take a very long time to and they're able to build consistent revenue with these small to medium sized businesses who need content on an ongoing basis and are willing to pay very well for it and they make more margin for it. So it's a win win. Now let's talk about the different types of content buckets very briefly so you understand like what kind of idea or bucket the content that you're going to create, you're going to be creating on an ongoing basis for these companies is because that's a big question that we get. So typically companies are looking for three different types of content buckets, right? So they're looking for ads that they're going to run on Facebook, Instagram and YouTube. Next they're looking for organic short form content. This is content that they can post on their Instagram, their Facebook, their YouTube. This is typically gonna be those vertical reels that you see. And this is gonna be short form content that they can use to start building their brand awareness and attracting more leads and more customers. And then finally it's gonna be organic long form content. This is gonna be content that they're putting on their YouTube, content that they're putting on their website. And any other place where that content might Live like FAQ pages. And so for this, it might be brand videos, it might be testimonials, it might be longer form content that they can live on their YouTube and their website to help convert more customers. Right. But these are the typical content buckets that they're going to fall into and the content that they're going to want on an ongoing basis. Right. And so putting together retainer based packages is just a concept of combining all these different types of content into a package that you want to offer where you're going, providing them with ads, organic short form, organic long form, or just doing short form, or just doing ads, or just doing organic long form. But like providing them with content that's going to actually help them grow their business as opposed to just like one large commercial where if it doesn't perform, they just wasted tons and tons of money on it. So like this is just where the industry is going. And I'm curious if you're watching this, I'm curious your thoughts on this. So drop a comment down below, let us know if this is what you're seeing as well. Over the 500 clients that we've been working with at Master Filmmaker, this is one of the biggest things that we've seen and this is why we do what we do, to start helping our clients transition into offering more retainer based packages on an ongoing basis so they can make more money, grow their business and not be affected by this problem that's going on in the industry right now. And Shameless Plug, if you want to learn more about what we do at Master Filmmaker, how we help our clients do just this and grow their business, should be a link down below to schedule a call with our team. We'd love to chat with you, see if we can help. And with that being said, enjoy the videos we'll see in the next one.