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New HD Entertainment Company… small market… Diversify?
I am currently working with 3 other partners on the formation of a HD Entertainment company. We are working with a consultant on the business aspects of the company, how to incorporate as well as financial models and possible investors. What I am wondering is how production companies continue to make money and be profitable when they have no broadcast or corporate video work available. Are all of these thousands of companies simply selling their stock footage or have they diversified to other areas of media production? Without giving to much away, our concept is that if you build all of the necessary backbone systems into your business (SAN storage systems, tapeless workflow, good HD equipment and a solid editing platform) then you will be able to adapt and change within the market when work stops in one area and picks up in another. I come from the live sports and corporate media background; mostly live events for ESPN remote production, QVC and some 24-hour news networks. Trying to figure out where we will make money in our market (Burlington Vermont) has become a huge question mark for our business plan. I’m just wondering if anyone has any insight that they could provide on this matter, anyone that has been posed with this question and how they were able to get around it.
Thanks for your time!
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Ryan Ferris
24p Entertainment
Managing Partner
Executive Producer -
5 Replies
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Ryan-
There are plenty of kinds of jobs beyond broadcast and corporate, but in my opinion what is going to help your company more than anything else, at least in the beginning, is having VERY LOW OVERHEAD. Small shops need to be nimble in terms of expenses in their first years.
You mention getting the backbone of the company in place, using SAN, HD gear, etc. Will you really need these big-ticket items to start the company? You mentioned some big-names where you worked before, so you may have work lined up already that will require that you get all that gear right away.
But if you don’t already have clients lined up that will require all that high-end equipment you mentioned, I would advise you to purchase the equipment when you have the clients in place to support it. You can always rent equipment.
Trey Gregory
ECG Productions – Atlanta
HD Production and Post
https://www.ecgprod.com -
Trey,
Thanks for you response and insight. Back in 2002 I started a small production house with some low end industrial gear and a basic editing system and found myself relegated to local basketball games and fielding calls for wedding videography. Eventually I called it quits because I was unable to offer the types of services that higher end clients were looking for, I ended up getting into network sports and corporate freelancing. Freelancing was fare easier to do as a one man shop because I had no overhead in equipment, no office, and I was paid to travel; recently I have found myself wanting more creative control over projects and the ability to do all of the work in house. I have the opportunity to collaborate up with some colleagues and to create this entertainment venture; this will allow me and my partners to have complete creative control over all aspects of our business. I personally believe that the ability to move quickly when a client calls with a project is paramount to a successful enterprise; having the ability to grab a Varicam and go shoot something within an hour of getting a call is key. I cringe at the possibility of telling a client that we cant come out because we don’t have the necessary equipment and will have to rent it, ultimately adding cost to their production and eating into our profits. I think that having the systems in place to cover many bases in the industry is crucial, being able to adapt your production flow by simply re patching and using different software is a key component to a successful production house. I don’t in any way mean that we want to take over every aspect of the entertainment and digital media industry by offering everything all the time, but its those changes in the economy and clients specialized needs that I would like to address. Being able to immediately adapt to your clients needs and the changing economy without purchasing additional equipment or re tooling your operation are what make you competitive as a company. Again, I thank you for your insight and I will take into account your advice when we are looking at our financial situation.
Cheers,
-Ryan
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Ryan Ferris
24p Entertainment
Managing Partner
Executive Producer -
Ryan-
You’ve got a great point! I completely agree that you need to be able to provide a client exactly what they need ASAP. We are fortunate enough to have several very large, very well stocked rental houses in our city, which allows us to provide our clients with any camera, any format, pretty much ANY gear they could request, within 30 mins of the call. AND, as you said, this is critical to clients coming back. I’ve found that clients don’t care if we rent or own the gear, as long as it’s there when they need it. HOWEVER, as you pointed out, renting gear cuts into profit…..which is the absolute pits. Profit is king.Best of luck!
Trey Gregory
ECG Productions – Atlanta
HD Production and Post
https://www.ecgprod.com -
Lead.
Leading the way will always pave a road for you. Start advertising remote bluray capabilities to ESPN and you’ll have something to do at least once a week. You already know we all have to deversify. BEcause we are all doing it, some of us will have to do it on an extream level. For me, it was letting go of the role of a specialist and advertising myself as a one man band production unit. For others, it will be discarding the jack of all trades title and honing in on a nitch, becoming a specialist.
Miles vary. The creativity should stay peaked.
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Grinner,
You are absolutely right, companies that are inventive and savvy will make a name for themselves and ultimately the work will fall into place. We expect to produce nothing but a quality product for our clients, whether it is shooting B-Roll for NASCAR, working with a features unit at an event or doing a documentary. The ability to technically tackle any project and hit the ground running is the core component of our business philosophy. We hope that by creating an image of top-notch professionalism and a reputation of exceptional work that we will be able to establish ourselves as a stand out production house. Like they always say in the entertainment industry “your only as good as your last job”.
Thanks for your input!
-Ryan
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Ryan Ferris
24p Entertainment
Managing Partner
Executive Producer
http://www.24pGroup.com
Ryan.Ferris@24pGroup.com
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