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television commercials, for instance, the approval of the client has to be sought and maintained at every stage. Documentaries, industrial and other sponsored films, and some other products may require less direct contact if a close personal relationship has been established between Producer and client. The need for such relationships is less for larger production firms that have consolidated a reputation for creative ability and high-quality execution.
4.2 Mechanisms of Growth
The growth of individual film producers in Canada has been inhibited by the small scale of the total market, and by the dispersal and diversity of demand; the great majority continue small in size, and only a very few have an annual output exceeding $1 million. Thus no Producer has been able to secure a predominant share in any geographical Or product segment of the market, and the industry remains highly competitive. Small firms minimize their risks by economical employment and investment policies that are quickly responsive to the erratic nature of demand, thus maintaining a high degree of flexibility in their operations. Reliance is placed on outside providers of services and external capital facilities, and the most valuable resource of a small producing firm is its stock of in-house creative ability.
It has been shown that there appears to be a critical point in the growth process, when output is somewhere between $250,000 and $500,000 a year, which has to be overcome before a production firm can Survive on a larger scale. This is the point at which weighty decisions have to be made about the delegation of authority, the specialization of labour, and the acquisition of technical and other facilities. Certain economies of scale may be expected, but the factor that limits growth is the extent to which the in-house creative capability can be stretched Or augmented without loss of quality and originality.
A growing production firm will tend to invest in creative talent before it feels ready to adopt a degree of integration of its