Video Postproduction Services in the US Industry Market Research Report Now Available from IBISWorld

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The fallout from the recession will continue to hamper revenue growth, as production numbers slow and movie studios undertake in-house postproduction. The industry will rely on increasing advertising budgets to support overall demand, while new technologies will boost efficiency; however, external competition will have an adverse effect on services, hurting profitability. For these reasons, industry research firm IBISWorld has added a report on the Video Postproduction Services industry to its growing industry report collection.

The Video Postproduction Services industry provides production-support services, ranging from animation to format conversion. The industry relies on three markets for nearly all of its demand: TV production, advertising and filmmaking. Thanks to the introduction of 3D movies in 2010, demand for industry services boomed as many studios sought to cash in on the trend. However, demand petered out in the following years, including an expected 0.3% decline in 2012, as studios continue to expand in-house postproduction capabilities in order to cut costs. The Great Recession negatively affected demand from the industry's key downstream markets. According to IBISWorld industry analyst Agata Labianca, a drop in consumer spending reduced advertisers' budgets and resulted in fewer produced commercials, which hurt demand from this segment. The credit crunch also made it harder to finance new movies and shows, and producers have internalized many parts of the production process, drastically cutting demand for industry services. Over the five years to 2012, IBISWorld estimates revenue will drop at an average annual rate of 0.3% to $5.5 billion.

Technology is changing how this industry does business. Advancements in user interfaces recently enabled movie and TV production companies to internalize many tasks, reducing demand for some postproduction services, such as content duplication and subtitling. Previously, industry work was performed once the initial production had wrapped, but with digital workflows, postproducers are starting to work alongside production companies during video creation to expedite release times and collaborate with producers, especially with digital animation. As a result, employment numbers are estimated to decline at a five-year annualized rate of 0.6% to 1,504 in 2012. The full impact of the drop in demand from advertising, movie and TV studios will be felt through 2017, as the pipeline of projects remains thin. However, the industry will continue to benefit from its diversity across revenue sources, particularly as rebounding TV ad budgets lead to higher demand from the ad segment. The three related industries are forecast to continue growing over the next five years, but movie and TV production studios' move to internalize postproduction will still hinder industry revenue growth. IBISWorld estimates that revenue will stagnate through 2017.

The Video Postproduction Services industry is fragmented with a market share concentration of under 21.0%. It has a high number of small and specialist or niche service providers. The industry is small-business oriented, with the majority of employer firms having nine or fewer employees. “Over the past five years, movie and television production companies dealt with tight budgets and hired in-house postproduction specialists, which slightly decreased industry concentration because when they contracted out it was smaller jobs that went to smaller companies,” said Labianca. There are about 11 firms that have 250 or more employees. For more information, visit IBISWorld’s Video Postproduction Services in the US industry report page.

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IBISWorld industry Report Key Topics

The Video Postproduction Services industry includes businesses that prepare motion pictures for public distribution. Companies that are involved in movie or television production and also do postproduction in-house are excluded from this industry.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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