A jolt for aired commercials

  • Business
  • Saturday, 20 Jan 2018

Malaysian Association of Advertising Filmmakers (PPFIM) president Khoo Kay Lye

Law of the jungle prevails without the need for production contracts

THE advertising film industry is jolted by the National Film Development Corp Malaysia’s (Finas) move to withdraw the requirement for advertising film production companies licensed by it to be members of Malaysian Association of Advertising Filmmakers (PPFIM) for the application of the Made in Malaysia (MiM) certificate.

This has led to the recent absence of production contracts with PPFIM after two years of its existence which had seen healthy competition and better regulation in the industry.

With the absence of such contracts, industry players together with PPFIM have expressed disappointment and are appealing to the Minister of Communications and Multimedia and Finas to help restore and facilitate such contracts which have been the envy of production houses in neighbouring countries like Thailand, Indonesia and Singapore.

PPFIM president Khoo Kay Lye tells StarBizWeek that the absence of proper production agreements will result in price undercutting in the industry, which is not healthy and will affect professionalism as well as the quality of TV commercials in the country.

With the advent of digital advertising platforms coupled with the absence of any form of production contract, the advertising film industry is heading towards troubled waters and will impact the revenue of the industry on the whole, he says.


Must have: Lee says it is imperative to have a production contract.
Must have: Lee says it is imperative to have a production contract.

Furthermore, without proper regulation in place, Khoo says the production industry will get worse akin to a scenario like the “law of the jungle” with no rules and no holds barred. This may be the beginning of the end of the industry, he adds.

“Production contracts are vital for the growth and professionalism in the advertising film industry which still has room to improve. In the absence of such contracts, it will not only allow the mushrooming of unprofessional practices such as price undercutting, making the crew work long hours without compensation but also poor employment opportunities.

“It will also give rise to poor regulation and an unequal playing field in the industry. These contracts are important and akin to the ‘blood and veins’ of the industry as they clearly spell out the obligations between agencies or clients and the production houses. Without this, agencies or clients can pretty much do as they please which will be an abuse to the industry’s working culture and etiquette,’’ he explains.

Khoo says that with the contracts in place the last two years, the commercial TV and film production process have been smooth as all the relevant parties were aware of their responsibilities like payments, proper working hours, etc,

Looking back, he says Malaysia has lost its regional dominance it once held in the area of TV commercial production as in the seventies and eighties resulting in the outflow of talents and experts to neighbouring countries as well as dwindling of professionalism.

Back in the heydays, he says there were 100 advertising film companies and the turnover was around RM300mil, adding that the figure has dwindled to about RM30mil currently.

Commenting on production contracts, the Association of Accredited Advertising Agents (4As) president Andrew Lee says it is imperative to have a contract signed prior to the start of any service or production, including film production as it is good business governance and a common business practice in any industry.

“Therefore, we should continue to have a film production contract as it protects the interest of both the production house and the advertiser.

It also protects the wellbeing of the production crew as it set the maximum working hours at 16 hours per day,’’ Lee adds.

In the absence of a production contract, Khoo says production houses are at a disadvantage in terms of costs as they now have to bear them from the agreed total sum with agencies and clients, adding that this has further burdened them especially when payments are delayed by up to a year or more.

In 2015, PPFIM and Finas made it mandatory for advertising film production companies to become members of the association in order to apply for the MiM certificate, which is a requirement before a commercial can be aired in the country.

Upon being granted this privilege, PPFIM implemented a production agreement which was supported by the 4As.

This ensured all parties knew their responsibilities in the production of commercials and areas such as payments, proper working hours, etc.

PPFIM also provided practical advice to members on production issues, collaborated with peer associations and introduced training sessions for its members for the betterment and growth of the industry.

In September last year, without giving any clear reasons and grounds, Finas abruptly decided to withdraw this privilege, which was a major blow to the advertising industry, according to Khoo.

He said the association has appealed to Finas to explain why the privilege i.e. the mandatory requirement for advertising film production companies to be members of PPFIM before they can apply for MIM cert was withdrawn but to no avail. Finas could not be reached for comments when contacted.

He says with production houses registering with the association, it will ensure orderly and systematic scheme of things for a more sustainable future for the advertising industry and for the entire entertainment industry.

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