Will PPFIM contracts with agencies be revived?

  • Business
  • Saturday, 03 Feb 2018

Price war: Khoo says absence of proper agreements will result in price undercutting.

Finas to decide on matter at board meeting this month

THERE could be light at the end of the tunnel for the Malaysian Association of Advertising Filmmakers (PPFIM) for the revival of its production contracts with agencies.

The fate of these contracts depends on the outcome of the upcoming National Film Development Corp Malaysia’s (Finas) board meeting scheduled this month.

Among other things, the board will have to decide whether advertising film production companies licensed by Finas must be members of PPFIM before they can apply for the Made in Malaysia (MiM) certificate.

The decision by the national film body will eventually decide on the state of such contracts between PPFIM and agencies.

The contracts came to a halt when Finas in September last year decided to withdraw the requirement for advertising film production companies licensed by it to be members of PPFIM for the application of the MiM certificate.

The move resulted in such contracts with PPFIM coming to an end after two years of its existence. The privilege to be members of PPFIM first before the MiM certificate can be issued facilitated the enforceability of production contracts for aired commercials.

Finas director-general Datuk Fauzi Ayob when contacted by StarBizWeek via SMS responded:

“As I have informed the PPFIM president, the proposal ie production companies must be members of PPFIM for the application of MiM, needs to get an approval from Finas board of directors.

“Will bring up this issue in the upcoming board meeting.”

Industry observers have a mixed view of the existence of such contracts.

On one hand, industry observers view the contracts as creating a monopoly for PPFIM calling the shots of who should be given the MiM certificate and with its stringent “no willing seller and no willing buyer” approach when coming to production contracts.

On the other hand, there is also a strong voice in support of PPFIM’s move to have such contracts enforced with the above clause as this has thus far led to healthy competition and better regulation in the advertising filmmaking industry.

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 Association of Accredited Advertising Agents (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,

In recent interview with StarBizWeek, PPFIM president Khoo Kay Lye said the absence of proper production agreements would result in price undercutting in the industry, which was deemed unhealthy and affect the level of professionalism as well as the quality of TV commercials in the country.

Furthermore, he noted with the advent of digital advertising platforms coupled with the absence of any form of production contract, the advertising film industry was heading towards troubled waters.

Khoo noted 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,

Without a proper production contract, he added there would eventually be an outflow of talents and experts to neighbouring countries in the TV commercial production segment.

“Back in the heydays as in the seventies and eighties, there were 100 advertising film companies and the turnover was around RM300mil,” he said.

He added that the figure had dwindled to about RM30mil currently.

Commenting on production contracts, 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.


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