By Luke Lashley, Founder, Departure
If you’re a major brand or large agency considering starting an internal production offering, I see two main roads ahead of you. And the road you choose will determine whether you’re building a small additional revenue stream for your parent organziation, or creating a genuine competitive advantage.
Let me break this down, because I think a lot of organizations are accidentally choosing the wrong path.
Road A: Build A “Normal” Production Company
Option A is to start a “normal” production company. Your objective is to get boards, submit directors, win some jobs, stay afloat, and generate additional bottom-line revenue for your parent organization. Maybe you have a separate P&L, maybe you don’t. The exact accounting and legal setup here isn’t the point, more so the headspace and high level objective. With Road A, you’re essentially building another production company that happens to live inside your organization.
If this is you, that might be totally okay. Especially if you’re working under a large agency or brand, it might be more than a small business. There’s nothing wrong with this approach, it’s straightforward, it’s familiar, and it can absolutely work.
But for me, when I look at this route, it seems like you’re voluntarily choosing to compete in exactly the same game as every other production company out there. Production company land is incredibly congested and overcrowded, so you’re voluntarily opting in to play the game in an incredibly crowded room by the same rules as everyone else. Essentially you’re hoping to win through execution rather than structural advantage.
Road B: The Unfair Advantage
Option B is something entirely different. In this option, the goal is to create a production entity that captures market share on the production side of the table, gaining an unfair advantage over third-party production players, and establishes meaningful stability, control, and economic upside.
This is a whole other story. The game becomes less about getting boards and sending directors like every other production company, and more about setting up your production entity to have a truly unfair advantage in the production ecosystem.
This approach comes with a whole slew of challenges and very niche nuances around talent acquisition, director relationships, board distribution, reel submission, timing protocols, bidding strategies, mandate structures, and so on. But it also comes with the potential for genuine competitive moats that external production companies simply can’t replicate.
The Missed Opportunity
At Departure, we’ve identified a series of about three “easy to make” moves that would put an internal production entity at a serious unfair advantage (at least theoretically…we haven’t proven it with a partner yet). But it sure is fun to think about, and as I’ve written in other articles, we follow “what seems wrong” as our northstar.
Part of what seems wrong is how heads of production sound at major companies when we talk to them.
Most HOPs we’ve spoken to are thinking, operating, and receiving mandates from leadership to “build a production company.” Build a production company. Full stop. As if the goal is to recreate what already exists in the marketplace, just with your logo on it.
We see a massive opportunity for internal production entities to be thinking much larger, more competitively, and using their proximity to the brand, agency, or parent organization to remarkable advantage.
Beyond the Soft Benefits
And we’re not talking about the usual soft benefits that get thrown around like “understanding the brand better” or “being close to the office.” Those are too…fluffy. We’re talking about hard, business process advantages that create structural moats your competitors can’t cross.
Think about it: you have direct access to budget allocation decisions. You can control the flow of information. You can influence briefing processes. You can structure workflows that external partners simply can’t match. You can create decision-making efficiencies that cut weeks out of traditional procurement cycles.
Most importantly, you can align economic incentives in ways that make your offering not just competitive, but structurally superior to external alternatives.
The Strategic Question
So here’s the real question for CMOs and leadership teams: what are you actually trying to accomplish?
If you want a production company that happens to live inside your organization, Road A is perfectly fine. You’ll probably save some money, maintain some control, and create a nice little revenue stream.
But if you want to fundamentally change how production works for your organization. If you want to create genuine competitive advantages that compound over time. Then you need to think bigger than just “building a production company.”
You need to think about building a production entity that plays by different rules entirely.
The Nerd-Out Invitation
If you’re a CMO, HOP, or anybody involved in an internal production offering at a major organization and you want to nerd out about what this could actually look like, holler at us.
We spend a lot of time thinking about structural advantages in production, and we’d love to explore how those concepts could apply to internal entities. Because it seems like many internal production companies are leaving a lot of competitive advantage on the table.
