The Video Production Margin Curve: Where AI Output Stops Compounding

Video generators compress the cost of first-draft production, but the savings land on the line item clients already discount. Agencies that win retainers from this category treat generation as a volume layer under a custom scripting and brand-styling layer, and they price the layer, not the render. Forrester's 2027 predictions put every AI line item under P&L review, so the shops that can show cost per finished variant will hold rate cards while avatar-only shops get repriced downward.