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Content studios under threat as agencies join the game?

14-September-2018
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Content studios under threat as agencies join the game?

Content has become the latest battlefront for some digital agencies. Following the success of a number of partnerships between content studios/creators and brands, agencies are attempting to create the magic of content themselves.

In April this year, GroupM’s The Glitch launched a content division called The Flux. One division of The Flux is a content studio that addresses the long-term needs of the clients while the content lab vertical functions as an incubator for brands. Late last year, independent agency Foxymoron along with Famous Studios launched a content division that creates digital video solutions for brands.

These in-house content labs/studios come with the promise of connecting brands to influencers, much like what MCNs and content studios are known to do. Over the years, with content becoming a bigger part of a company’s digital spend, brands are preferring to work with content creators but with agencies as the mediator. “While it is hard to put a number to it, the number of projects coming through agencies is increasing,” said the creative director of a leading digital content studio. He said that brands find the process more streamlined if done through an agency.

But that’s just half the story. Agencies are under a lot of pressure and spend a significant fraction of their time and efforts on pitches. In addition, briefs from retainer clients, which are higher than they used to be, are being lost to content studios. “Agencies see an opportunity here. They believe they know brands and their needs better and they have access to these clients. So they see it as the logical next step,” said the head of a content studio.

In an interview to exchange4media, Pooja Jauhari, CEO, The Glitch, had highlighted this point. Explaining the launch of The Flux, she had said, “Content has shied away thinking ‘Will the brand ruin my content?’ and brands feel ‘Hey, I want more of my brand in that content.’ We build brands and tie-up or work with content where the brand is right at the centre of it all as we create great stories.”

It is not just large agencies that are building in-house capabilities for content studios. Smaller agencies that function out of hole-in-the-wall establishments too have a small room with a studio setup where they shoot content for social media posts and the like.

This is born out of the knowledge that content is ephemeral, particularly digital content. “Five years ago, brands saw digital as a place to make their presence felt with a website, Facebook page, Twitter account etc. Whereas now, brands have realised the need to engage with consumers online. The opportunity that has presented itself is the need to create content in a constant state,” says Advait Gupt - Founder & Managing Partner - Supari Studios.

Neither Gupt nor the two other content studio heads exchange4media spoke to saw the trend of agencies trying their hand at the content game as a threat. But they are cautious. “It would be foolhardy to think that no one can be a substitute to the product I offer,” one content studio head said.

While it is the agencies that are under threat on a number of fronts, content studios are cautious but confident about their position in the market. “The market is just opening up right now. It has not reached a state of hyper-competitiveness where we are worried about agencies eating into our business,” Gupt said.

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