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If you’re not aware of the global production industry shifting, then you’ve been on holiday since COVID. In which case, I applaud you. For the rest of us, the chips are down…
The Market is Messier than Ever
Barely a week goes by without me receiving an email or text from a production friend asking me what the hell’s going on. Macro-economic uncertainty, AI-driven disruption, post-COVID client pullback are some of the headwinds stirring up the high seas for anyone navigating the industry.
Couple that with clients’ current short-sighted obsession with performance marketing over long-term brand building, and you’ve got the toughest environment in decades to run a production company.
There have never been so many players — creators, influencers, internal agencies, branding shops that hired a producer and call themselves production companies, and “have-a-go heroes” in marketing departments making their own films.
The shift is driving an unprecedented fragmentation. And yet, the market is still growing at 9-10% annually. 91% of businesses now use video as a marketing tool versus 61% in 2016.
So while the market grows, fragmentation, margin pressure, and tech disruption are forcing companies to adapt or fold. And yet, despite everyone feeling the pain, almost no one is talking about what comes next: consolidation.
M&A is on the Move in Adjacent Industries
Look across media and entertainment, and the pattern is obvious. Global M&A volume in 2024 hit $115Bn, the busiest year since 2018 (PwC/Bain). Brightcove was acquired by Bending Spoons for $233M despite middling performance. Omnicom is now circling IPG.
These aren’t creative bets. They’re survival strategies in a world where scale and efficiency matter more than ever.
Why Corporate Is Next in Line
For years, I’ve believed we’d see a barbell effect in corporate production, where the centre gets hollowed out. The explosion in tools and talent means enterprise clients have never had more choice.
At the other end of the spectrum, big brands increasingly want to consolidate suppliers. Managing dozens of producers around the world is inefficient and inconsistent for companies trying to present themselves as unified global brands. What they need: partners with a global footprint and local expertise. Global capability, local sensibility. That takes scale.
Meanwhile, demand for efficiency is pushing tech platform development, AI integration, and production cost arbitrage. Again, all require scale to deliver cost-effectively. Which leaves the middle exposed. Mid-sized companies without either the scale or the sharp niche to stand out will face a choice: specialise, consolidate, or shrink.
Many Companies in Our Sector Hit Terminal Velocity
Margins are tightening. Centralisation is increasing. Despite 85% of marketers calling video “essential,” 57% say budgets are flat or declining in real terms (HubSpot 2025). There is a real split between the clients who can see the value and are making larger investments, and those who are yet to see the light and want to pull back. This means that consolidation isn’t just a creative trend; it’s often driven indirectly by the CFOs of the companies we work for.
Production is a challenging business, incorporating a largely commoditised product, where the value of creativity is often misunderstood or undervalued by clients, and the fact that creative people don’t conform and shouldn’t just be used as cogs in a machine. Because of this, every production company eventually hits terminal velocity. As businesses get larger, complexity rises, and the drag can overwhelm the energy, experience, and desire of even the best teams. Company scale isn’t just about ambition - it’s a function of physics.
What This Means
The next three to five years will see a wave of roll-ups as mid-sized shops are absorbed into larger, private equity–backed networks.
The winners will be businesses with scale, tech, global reach, and the agility to weather the storm. But let’s be clear: this isn’t just a threat. It’s a once-in-a-generation opportunity to redefine what we do. The next phase won’t be about “making films.” It will be about engineering behaviour change at scale through multi-touch, multimedia projects.
What this Means for Smaller Companies
Consolidation doesn’t mean small players are finished. Far from it. What we’re likely to see is a barbell effect:
- At one end, large global platforms.
- At the other, nimble boutiques with distinctive creative voices or deep sector expertise. The squeeze will hit the undifferentiated middle.
Small companies that lean into what makes them special — creativity, speed, cultural nuance — can thrive. Some will choose to stay fiercely independent, others will join bigger networks on their own terms. Either way, agility and originality remain currencies of real value in this new era.
Closing Thought
The industry is changing fast. For those in the middle, the choice is simple: get big, get specialised, or get bought. For those at either end, the opportunity is wide open, and the time is now.
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