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Commercials production companies have always operated in that perilous terrain between commerce and creative, handling the volatile properties of creative genius and the care and feeding of new talent while making the numbers work - for their clients and for themselves. Never an easy proposition, it's one that has become trickier than ever in today's ad climate. In this report, Creativity brings you a roundup of some of the key players in the U.S. commercials production arena - 25 of them to be exact. The list was derived from Creativity staff picks combined with industry polling. Companies are listed alphabetically with key information. Also in the report, the executives behind four of those companies listed talk about running a production operation today; how they have constructed their particular business model, and the challenges facing their company and the production industry at large.

The founders of @radical.media don't seem like a pair of guys who are averse to embracing the new. One of many clues to this comes as you arrive at the tastefully hip Radical offices in New York and are greeted by proprietor Jon Kamen, wheeling by on a Segway* test drive. Kamen offers another clue with his one question about the ostensible-wave-of-the-future conveyance: Does it fit in the back of a Mini? (Kamen's current ride). Similarly, when TiVo came on the scene some five years ago, Radical co-founder Frank Scherma immediately signed on for a lifetime membership. Not just another piece of gear to round the edges of a busy life, the gadget represented to both partners another development that could change mass viewing habits and potentially the industry in which they had both toiled for most of their lives.

Kamen and Scherma "reinvented" @radical.media in 1993, with an eye to what they saw as a changing media landscape and the building pressure on the production company model as it had evolved to that point. At that time, Kamen says, having spent 20-something years involved in the business it was important to him to create an entity a little outside the production company paradigm. "I didn't really think that the world or this business needed just another production company. We wanted to make sure we were creating something that had longevity; an atmosphere of creativity and alternative marketing. We recognized there were going to be other media that would have an impact on viewing habits of consumers and I was concerned that we were going to end up a dinosaur, exclusively producing TV commercials. So the content thing was certainly something we were aware of back then." The pair wanted to create a top commercials company that would also act as a creative hothouse for its talent.

Since then, the company has built an industry-leading body of commercials work, and created a well-oiled global brand for itself, with branches in New York, L.A., London, Paris, Sydney and Berlin that are meant to reflect the Radical concept down to the physical design of the offices. The shop won the Cannes festival's nod to top production shop, the Palme d'Or, for the second time last year and has continued its string of high-profile work across a wide range of company talent, including Errol Morris' genre-defining Apple testimonials, the new T Mobile rebranding campaign from Tarsem and a new Bud "True" installment from the team of Lemoine.Miller. The latter also directed Computer Associates' "Amnesia," one of two Emmy-nominated spots this year for Radical (the other nomination was for the Gregor Nicholas-helmed "Broadway Poem" out of BBDO). Radical veteran Frank Todaro went noticed in Cannes this year with the FedEx "Great Idea" spot, while more recent signatory Richard D'Alessio directed the latest Verizon Wireless effort, featuring mobsters and ferrets. At press time, Radical had also confirmed that it had acquired longstanding L.A. production shop Stiefel & Company.

At the same time, the company has stepped up to the entertainment and TV programming plate to a perhaps unprecedented degree in the industry. The company now has a full slate of long-form programming, TV series and one-offs with and without advertiser involvement, as well as feature films in various stages of development. All part of the Radical plan: building on a base of strong commercials work, long-form entertainment and branded content projects would feed the creative needs of directors, making the shop a magnet for talent and creating new revenue streams, forming a virtuous circle of new work and new thinking. This creative laboratory would also lend longevity to the lifespan of directors, people who Scherma says have traditionally had careers like ballplayers. With an agency background at shops like Ammirati and Chiat Day, Scherma had long been immersed in the question of how creative people stay creative. "The thing for us was to grow horizontally - it meant that if we entered into other media then we as a creative place would be more interesting to everyone. It keeps us interesting as a company and keeps the creative people with us even more interesting, because they have so many avenues to touch on."

The company's avenues continue to grow wider and longer, as does its production slate. A sampling of long-form projects includes new series for VH1 and Showtime, both in the pilot phase; a music project, now in post, which will likely become a six-part series for a major network; and Cyclone Season, a series based on a girls basketball team, being developed with WB Television. The company is also in development on an advertiser-supported show for Fox Studios and is in development on a book project with Miramax, based on kids' book Everything on a Waffle.

Radical also recently completed Report From Ground Zero, a two-hour movie for ABC, based on the book by retired firefighter Dennis Smith. The show airs this month, as the 9/11 anniversary is marked. While Radical was contracted to produce the show, Kamen also realized the need for special attention to be paid to the matter of how advertisers would be present in the show and persuaded ABC to let him take the project to agencies.

The production of a two-hour network movie is another milestone for the company, which has made a significant investment in becoming a content player. "It's taken us time to get our sea legs and to be able to develop and pitch and manage and sell and produce programming," says Kamen. "But I'd say over the last five years, in one form or another, we've been quietly working on a variety of different programming. A big part of our business plan was to remain agile enough to embrace all these opportunities and find a balance in what we do. We invested a lot into growing this, so it forced us to manage ourselves in an efficient and strategically intelligent way to get to the point where we could gain experience, actually practicing what we've been talking about."

Last year's production of 32 half hours of sports show The Life for ESPN was a significant step. It wasn't just that the production company was entrusted with a major, new branding initiative. The project meant Radical could also gain serious series production chops it has since parlayed into a growing body of TV content. Radical had worked with ESPN agency Wieden + Kennedy, of course, numerous times on ESPN and other agency clients. As far back as 1992, Kamen had been pitching the agency on his vision of branding's long-form, multimedia future and in 1994 Radical actually produced a shoe-centric program for Nike for the Japanese market called the Hoop Hop Tour. And while Radical considers itself more of a partner to agencies, it has solidified that relationship with W+K via Willing Partners, a non-exclusive joint venture through which the two companies are developing entertainment properties. Among them, most famously, The Ball, an original Broadway play Kamen says is a year and a half from completion. Another Willing Partners venture is a dramatic series being developed with the WB Studios. Neither project can be called branded content- while Kamen says Nike is participating in the basketball-oriented The Ball, and has first crack at future sponsorship opportunities, the shoemaker is not financing the show (a third partner in the play is Broadway producer Ariel Tepper). Outside of the Willing partnership, W+K and Radical have joined forces on other branded content, including last year's Road to Paris Nike docu-spot featuring Lance Armstrong.

In addition to the broadcast work in development, Radical has also fed an emerging media and design group with work from all areas of the creative spectrum (the Radical design arm was recently named as a top design shop in Businessweek). This section of the Radical office has undertaken everything from business-to-business interactive applications for clients like IBM (an installation at Epcot Center) to designing uniforms for four teams during this past Winter Olympics with resident artist/costume designer/director Eiko Ishioka. Outpost Digital, a post and production technology outfit acquired by Radical in 2000, which now resides on a new floor of the New York office, works on in- and out-of-house projects. Outpost recently finished post work on Steven Soderbergh's high-profile DV foray, Full Frontal, and is assembling the Radical-produced doc A Day in the Life of Africa. A new Outpost facility is set to open in L.A. this month.

The investment in the future is starting to pay off for the company; in fact, while long-form programming now makes up roughly 20 percent of company's revenues, in three to five years Kamen says it will equal Radical's commercials billings. Which could be good news for a production company, considering the downward pressure on margins in the commercials business. While TV production is no license to print money, it does create new avenues of financial potential with co-production partnerships, license fees, international rights, ancillary revenues - a piece of what is created. And while Kamen is fond of saying that with its commercials work, Radical already produces better TV than most and that its goal is to fill the gaps between commercials with better shows, a prime rationale for moving into programming was exploring new revenue opportunities. "The revenue stream from programming in itself is diversified; some of it will be work for hire, some will be as a co-producer, some will be a combination of licensees or royalty compensation and obviously we like the idea of building a portfolio of opportunities like that. It's healthy for our business."

The company has also had a hand in several features with its directors, including Ralf Schmerberg (Poem); Frank Todaro (Above Freezing for HBO); Alan White (The Erskineville Kings); Errol Morris (an upcoming feature doc on Vietnam-era Secretary of Defense Robert McNamara); and Tarsem (The Cell). ( The company brought on Jane Long in 1998 and, in 2000, Jack Lechner, former head of development at Miramax in development roles in L.A. and New York, respectively). While the features have been successful, Scherma says movie work is more strategically than financially motivated - the idea being to make "smart, small films" that feed into the shop's creative culture. Kamen and Scherma also point to the key roles played by Radical execs like Robert Fernandez, Donna Portaro and Greg Carlesimo, and those who spearhead the international offices.

On the commercials front, Kamen says while the company has been strained in the margin area like everyone else, it's managed to exceed its revenue and growth projections through two fairly tough years in advertising and into a third. "We never forget what our core business is. And all these other things are so related and so connected." He concludes: "There's not a Friday night that goes by where Frank and I don't say to each other, 'We've got our work cut out for us. But we're still having fun.' "

* Jon Kamen is no relation to Segway inventor Dean Kamen

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