There is no denying a slowdown in commercial production across North America in recent months. Clearly, Canadian spot shops have not been left unscathed. Companies are scrambling to find new sources of revenue, and whispers continue that not everyone will survive the dip.

With agency layoffs signaling a greater slump in the overall economy, some nervous producers are saying this slowdown, unlike others that preceded it in the ’80s and ’90s, may signal a complete paradigm shift in the industry.

Canadian spot shops are responding to the downturn in different ways. Some smaller companies, with lower overheads, are ‘sticking to their knitting,’ using the down time to strengthen relationships with agency people. But most medium to large shops cannot afford to wait it out.

‘Everybody’s trying to find something to shoot,’ says Richard Speer, president at Jet Films in Montreal. Speer, whose Canadian director Guillaume de Fontenay was recently lauded for a Bombardier corporate video (see p. S-5), insists corporate work ‘is not a second option.’ It does, however, point to a necessary diversification of business at the larger shops.

At Radke Films, executive producer Scott MacKenzie says his shop has always been a leader when it comes to diversifying its business model. ‘We look globally for business. You have to be broader based. This market is shrinking,’ he says.

Many companies are hesitant to talk about a slowdown in the industry for fear of worsening an already battered business momentum.

‘The bigger companies are definitely exploring other forms of revenue,’ says one executive producer, who prefers to remain in the shadows.

‘People are starting to make noises about long form and independent movie projects,’ says the producer. ‘Every production company has scripts they’re looking at. I haven’t seen more music videos, but I know that pretty much every company in town that does commercials has been actively reminding their U.S. affiliates about how great our dollar is.’

While an attempt to increase roadhouse work, long-form, corporate video and international spot business has many commercial executives working overtime, some industry veterans have completely changed their approach.

William Cranor, longtime Spy Films executive, recently launched adbeast, an Internet company serving the advertising business (see p. S-4). ‘If you’re going to rely on the commercial business, you’re living in a fool’s paradise,’ Cranor says. ‘Your portfolio needs to be diverse. You need to do other things.’

MacKenzie cautions that too much diversification can also be a problem. ‘You treat [the slowdown] like Labatt or Molson or any of those companies found out. Your core strength – don’t give up on it. Remember your core business, your local business. We do commercials, and we do it better than anybody else.’

There is also a quiet movement in the industry toward long-form product placement, which some see as the future of the advertising business. As well, projects such as BMWfilms.com are revolutionizing the way consumers are pitched. Many believe early adopters of this new paradigm will become leaders. Others, however, contend the costs of being an early adopter outweigh the benefits. *