An industry driven by corruption

Syed Faisal Hashmi, Founder and Sultan Sultan Ghani Afzal, CEO, Stimulus Productions Worldwide speak to Aurora about the positive impact production houses have brought to Pakistan's ad industry and what needs to be changed.

AURORA: What is an ‘independent’ production house?
SULTAN GHANI AFZAL: We speak of independent production houses because in the past, the majority were director owned. We were the first organisation to introduce the independent production house model. In 2009, there were only about six or seven top-tier directors and they ran their own production facilities and most clients went to them. We came in without any directors on board, which meant we were able to recommend whoever we felt would be the best director for a particular project. The advantage is that we are more diversified in terms of the solutions we provide to clients.

A: Were the top-tier directors comfortable with this new model?
SYED FAISAL HASHMI: They eventually became comfortable; it was an evolutionary process. Today, there are about 50 production houses.

A: Can they all survive?
SGA: Not all; about eight or 10 will as long as the advertising is there.

A: Do you produce TV commercials as well as TV dramas?
SFH: TV commercials only.

A: Is this sustainable in terms of the overall number of TVCs that are made in a given year and the number of production houses offering the same services?
SGA: When it comes to producing any kind of content in Pakistan, TV commercials are the most expensive propositions. In the West and in India, feature films are the most expensive proposition.

A: Do you deal directly with clients?
SGA: We deal either with the agency or the client. They approach us with a concept or a storyboard and we discuss the kind of feel they want to achieve, the budget and then we decide on the director, depending on whether the approach will be comedy or action based – the genre in short. We also recommend the location, the type of music required, the animation (if required). Basically we provide the whole package.

A: Leaving aside foreign directors and as you said, not long ago there were only about six or seven good directors. Has the talent pool increased and if so how?
SFH: Until recently in Pakistan, there was a dearth of directors. However, in the last 10 years, several talented directors such as Soheb Akhter, Aniq Ernest and Nabeel Qureshi (Namaloom Afraad ) have emerged. And then in the last three years, a lot of new directors have come up in the shape of young kids who are very talented and very solid. All they need is a bit of polishing and they are good to go.

A: They are able to make a living out of it?
SGA: Yes. Earlier, the people who directed commercials were employed by the agencies. Later, directors opted to go freelance and later still, courses in media sciences and filmmaking started to take off and the evolution continued.

SFH: Actually they learn on the job. There is no infrastructure; no one is interested in teaching them anything. These newly-founded media sciences courses are not able to impart learning to the point where it becomes useful. A lot of people who applied to us were unable to deliver on the basics they were supposed to. Only a few were able to shine and those were the people with innate talent and passion. They started to observe, learn and experiment. They are all self-taught. Today, we have an amazing pool of art directors. There was not a single art director until 2011 – and the first art director was a woman. Now, there are five and all are women. They graduated from the Indus Valley School of Art & Architecture, the Karachi School of Arts or the National College of Arts (NCA). But it was their passion that drove them. The problem is that no one is bothered. Key areas such as art direction, costume styling and cinematography, all contribute to a single visual and the people who are responsible for this have never been properly trained. We lack learning, be it in advertising, marketing or production. Why are we still debating the reasons why Indian ads are better? We don’t seem to understand that we are failing to address the basics of good positioning or brand differentiation. We don’t understand that a simple concept can make for very effective advertising. We are in the habit of creating a whole feature film to communicate an idea. Furthermore, there is no infiltration of foreign education. This is why, the role of the production houses has been very important.

A: Important in what way?
SFH: By shooting outside Pakistan, we were able to work with foreign directors and their crews and learn from them. We took along a lot of people from Pakistan who also learnt how things are done and they brought back this knowledge to Pakistan. This is what has accelerated the learning in this market but it is not enough.

A: What is the solution?
SFH: We need foreign collaboration. Our industry is small; there are about 50 agencies and 50 production houses making something like 800 to a 1,000 commercials a year. Yet, we can represent Pakistan worldwide if we produce things that click. If we do, everything will change. We can become Pakistan’s global image ambassadors. In my opinion, the government needs to facilitate foreign learning; they need to develop platforms where people from Hollywood can collaborate with local talent, impart learning, do workshops and create a two-way traffic.

A: In broad terms, how much of your business comes from the ad agencies and how much from clients?
SFH: It used to be 90% from the agency and 10% directly from the client. Now, clients tend to approach us directly, so the split would be 60% agency, 40% client, but with an increasing client upward trend.

A: Is this a good thing?
SFH: It is a very bad thing. It is the agency’s job to ensure that the brand’s communication is coherent. The new trend means clients come directly to us and if they like our concept they will go for it. The next time, they may go to another production house and in the end, the brand will be all over the place in terms of their positioning and any strategic advantage they wanted to gain. Eventually, that brand will die and how is that good news for us? Agencies are going through a difficult time and there is a lot of pressure from clients to cut costs. Added to which is the fact that they did not foresee the impact of digital. Agencies have to redefine their business model and come back in full force, because as long as there is advertising, we will need advertising agencies; otherwise, I don’t know how it will work. They need to sort out their problems.

A: What would these problems be?
SFH: Many clients believe their agencies are not serving them well – that they don’t listen and their turnaround time is slow – basic servicing issues. Plus, the fact that often their output is not that great. I also have the feeling that quite a lot of agencies (but not all) are in it for the money only. At Stimulus, we keep our clients coming back because of the quality we give them.

A: What has been the extent of digital’s impact on your business?
SFH: It is an inevitable evolution. Nobody has to cry over it; all we can do is prepare for it. Eventually, people will move to digital. There is a set formula for TV commercials. A concept comes to us, we produce it and we make a certain margin that keeps our business running. With digital, you are not confined to a concept; you can work on tactical campaigns and try to make them go viral – and you can create original content. With the entry of Netflix, Amazon Prime and Apple Plus, TV will be dead in five years' time – outside Pakistan at any rate. Today, everyone wants to make a web series. There is no such platform in Pakistan but pretty soon, someone will think about it and will start to make original content for this space. A company dealing with digital content production has a lot more scope than a company producing TV commercials or dramas or feature films. That is where the future is.

A: Production houses have been accused of encouraging corrupt practices. Is this justified?
SFH: There is a lot of corruption in this business. A lot of the people (not all) who have the authority to sanction a project within an agency (and I am not saying the seths know about it; actually I am quite sure they don’t) are not clean. In some cases, clients are involved. All this has made the existence of production houses, such as ours (who have built their reputation on the basis of the quality of their work and not on anything else), very difficult. People have also approached us to cut a deal and we have categorically refused. From the start, we have stayed clear of this and we have been lucky to work with agencies that have also stayed clear of this. But lately, this has increased to the extent that I would say that about 50 to 75% of the industry is now driven by corruption.

A: That is a huge percentage.
SGA: Because Stimulus is doing very well, people assume we too have reached some sort of understanding with our clients.

SFH: And our response to this is that if we were to start going down this road, nobody else would exist because of the kind of portfolio we have. We have an office in Thailand, which is a tax-paying, legal entity and we have been producing commercials in Thailand and Dubai as well as elsewhere. We are the only company that hires foreign graduates; we train them according to our values, which are transparency, honesty and integrity. We do not hire people from the industry because we are afraid we may hire someone corrupt. So with all this in our favour, if we start bribing people, no other production house will be able to survive because clients would like nothing better than to work with us. The only reason we are fighting to not only survive but retain our position as a leader is because we don’t do this kind of thing. The corruption has now become so widespread that we don’t know where to go. We are sticking to working with a couple of agencies and a handful of clients and that’s it.

A: At the end of the day, the people who are being taken for a ride are the clients. Why do they tolerate this?
SFH: The problem with anything shady is that there is no way to prove it. Having said this, there are clients who are asking their procurement departments to get in touch directly with production houses. Dealing with procurement is painful because they don’t understand the difference between good art direction and bad art direction, or why a certain camera is better suited to a purpose and we have lost a pitch due to this. Sometimes, we are more expensive; for a certain job, we may want to involve a foreign director because we feel he or she can add value and this may cost $200 to 500 more. We want to make sure that whatever comes out of Stimulus looks good and this sometimes makes us a little more expensive. But procurement will only consider the lowest bid rather than evaluate quality versus cost.

A: Isn’t it about time that production houses formed an associative body?
SFH: We don’t have an association and we will perhaps not have an association for many years to come because everybody is so insecure. They think that if they share an idea, we will steal their business. This kind of mentality is self-destructive and I am not hopeful we will make progress in this direction. We badly need an association; there are a lot of problems that need government’s intervention. The government doesn’t understand how to tax TV commercial production. Everywhere else in the world, TV commercial and feature film production go hand in glove. The businesses are the same; they employ the same skills, the same equipment and the same resources. Then, there are anomalies in the taxation system. For example, the Federal Bureau of Revenue has regulations that the State Bank of Pakistan is unaware of; it is mind-bobbling but no one is bothered.

A: What is the future of production houses in Pakistan?
SFH: Our business is TV commercials and as long as there is advertising, we will be there. However, we have to look beyond that. In 2007, Nokia was the dominant market leader; 10 years later, it was non existent. This is an ever-evolving world. A lot of times, your competition is not your competitor; it is the next industry to emerge and in our case, this is the digital sphere. Trillions of dollars are pumped into digital and TV will soon be nonexistent. It will be about the Netflixes and Amazon Pluses. The future of digital innovation will be in original content, which is where we want to branch out. So Stimulus is going to stay, but perhaps five or 10 years hence, it will be a different sort of company.

Syed Faisal Hashmi and Sultan Ghani Afzal were in conversation with Mariam Ali Baig.

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