APAC Production Houses Combat Shrinking Budgets With AI and Cross-Border Deals

APAC production houses face a brutal equation: budgets are shrinking, timelines are tightening, and clients still demand world-class quality -- pushing studios to rely on AI, cross-border deals, and cost-cutting hubs like Thailand.

"In terms of branded content, the biggest issues we still see are shrinking timelines, shrinking budgets, fierce competition, and the ever-present and undefined challenge of AI," Mighty Nice head of business development and original content Matt Taylor told LBB.

But as Monks APAC head of film Rebecca So warned, APAC producers are "undercutting each other in desperate attempts to win the work."

According to industry leaders, production costs in APAC have risen sharply, while budgets for regional campaigns have dropped by as much as 30%. The disparity is forcing tough choices across the region.

"Budget transparencies are reduced and everyone in the production food chain suffers,” Rebecca said.

Some production companies are adapting through strategic expansion.

electriclime co-founder Michael Ahmadzadeh highlighted that the company’s new Thailand office is not so much a luxury but a strategic adaptation.

"Since soft-opening in December, we’ve delivered high-end productions at significantly lower costs, giving brands a global aesthetic without blowing the budget," he noted.

"Thailand has become a go-to destination for top-tier productions at lower costs, attracting Hollywood blockbusters like ‘The White Lotus.’"

The country's 30% cash rebate for international productions has made it a viable alternative. Similarly, electriclime’s Korean office taps into world-class talent for global campaigns with brands like Samsung and Hyundai.

Production spend pressures also create stark disparities across the industry. Rebecca describes a "poor cousin syndrome" wherein APAC teams are judged against global benchmarks without equivalent resources.

"Local clients are underfunded but expected to generate global-level results," she said.

Despite these challenges, Australian companies are exploring new regional opportunities. Australian animation studio Mighty Nice, for example, is currently in talks with a Japanese studio about future co-productions.

"The American market is very risk averse right now," said Matt.

"It would be good to see Australian studios engage more with the region rather than always looking westward."

Similarly, Whale founder and executive producer Rachel Perry sees untapped potential in broader regional campaigns.

"Creatively, you’ll often hear in APAC, ‘the markets are too different,’ but there are strong examples of cross-market and global creative concepts that succeed with smart adaptation and localisation," she argued.

"In a region as diverse as APAC, we need to make work that respects local markets while aiming for broad appeal.

"In Amsterdam, briefs tend to be either for global or EMEA regions, including minor adaptations for their specific markets.

"Here in APAC, brands still appear shy to tackle briefs cross-market. When the brand story and creative concept is strong enough to reach multiple, diverse audiences, the focus can be on the making of the craft, leading to more effective work."