Recession and Video Production

[Brendan Coots]

“we will work on anything that comes our way as long as there is a fair price”

We’re actually heading the opposite direction, narrowing our focus much more in terms of specific industry and our services. But strategy totally depends on where you’re located and a whole host of other factors. Locally, most of our competition is very scatter-shot and will “work on anything that comes their way” meaning they are all competing for the same jobs, and none of them offer any real expertise in a particular industry. For us, it makes sense to narrow in and specialize, for someone in a region with less local competition not so much.

In terms of the economy, I just posted a thread about the closing of a major player here in the Bay Area. Every “insider” I know reports major slowdown at both large agencies and smaller studios. In fact, a lot of people I’ve spoken with report having no work AT ALL since 2008. Many, many studios are NOT going to survive this, many more will limp out the other side barely alive, and some will thrive. If you look at the factors driving which category a particular studio will fall in, it comes down to the basics like overhead, profit margin, differentiation and sales/marketing strategy.

Brendan Coots
Splitvision Digital
http://www.splitvisiondigital.com

[Mike Cohen]

It is certainly a buyer’s market for services. My clients are shopping around, and I too am shopping around for my own vendors. For example, I have been getting bids on live webcasting. Rather than my customary 2 quotes, I got 5 and in fact the 5th one was the best deal.
So be prepared as a vendor to be subject to price comparisons. Call attention to your value added services, or what sets you apart from the competition.
Study search engine optimization to make sure your websites are easy to find.
In tough times it does not hurt to diversify also.
It could be a tough year for a lot of folks.

Mike

[Ron Lindeboom]

[Mike Cohen] “It is certainly a buyer’s market for services. My clients are shopping around, and I too am shopping around for my own vendors. For example, I have been getting bids on live webcasting. Rather than my customary 2 quotes, I got 5 and in fact the 5th one was the best deal. So be prepared as a vendor to be subject to price comparisons. Call attention to your value added services, or what sets you apart from the competition.”

We just bumped into this today, Mike. One of the major camera manufacturers (that we haven’t done business with in years) told us that they would buy an ad from us in the next issue of Creative COW Magazine, IF we sold it to them at $1,000 for the full page — oh, and they wanted to be on the inside front cover.

True story.

They told us that “the other magazines are doing it” and that if we wanted their business, we’d do it too.

We told them, “Er, excuse me but aren’t many of those other magazines going out of print? April will find the next one bowing out.”

If we followed their example, we’d too be out of business soon. We don’t plan to follow, as we plan to be around a long time, thank you.

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

[Joel Jackson]

It’s been a while since I’ve had time to be on the COW, BUT, I’ll buy the inside cover for $1500.00. Seriously, today!

What I think we will find, and it may take some time, is that there is a reason our clients “stick” with us. They can shop out cheaper alternatives and may get good results once or twice, but do their new hires really understand their brand. Can they show up on a shoot and say, “wait, isn’t that the old packaging” to the producer to save his butt on set. That is what a true client relationship is all about. Protecting and making our clients look good. We’re in the business of making people, corporations, and broadcasters look good. And more importantly FEEL good. That may sound ridiculous but it’s true. Yes, there are a million professionals out there that can shoot and cut a “blow your mind” video (and I hire these people) but without that deeper dedication to the production and brand the client will not return for future business.

Here I am in Paris shooting high fashion for L’Oreal by my own design, for my own company. These are the business principals I believe in and as always, I could be wrong.

But I stray, what economically based issue are you guys dealing with? I really want to know what our industry is facing and I can’t find answers. Should I start a forum?

Best,
Joel

Joel Jackson
http://www.creativebloc.com/port.html

[Ron Lindeboom]

[joel jackson] “…without that deeper dedication to the production and brand the client will not return for future business.”

I know plenty of companies in this industry that are VERY dedicated and QUITE good and professional. They are hurting anyway and many are dropping like flies. Even companies like The Orphanage are closing — and only someone with little knowledge would argue that The Orphanage were not dedicated to making whatever they touched look and feel good.

The issues are many and if there were an easy answer to what’s happening, I’d fill an entire issue of Creative COW Magazine with it and print an extra 50,000 copies knowing that they’d all be grabbed in short order.

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

[Chris Blair]

We have clients whose business is actually up over last year, especially Health Care companies. We also handle 2 car dealer groups(11 separate dealers) and their business is steady. Now if GM doesn’t survive, all bets are off, but at least at the local level, they are selling cars and are still able to secure credit for the majority of their customers.

Overall our sales are steady even though we lost our biggest client (a national company) last fall when they went belly up. We had to lay off one person but so far, that’s it.

Some companies are benefiting from people’s change in spending. Many fast food and casual dining company’s sales are up and their stock is steady or up over a year ago.

McDonalds sales are up and their stock is equal to over a year ago https://money.cnn.com/2009/02/09/news/companies/mcdonalds_sales.reut/

BW3’s stock is up nearly 50% over a year ago and sales are up something like 28% https://www.allheadlinenews.com/articles/7014049641

Residential property companies are reporting record occupancy and revenues at their properties mainly due to people moving back into apartments who’ve lost or sold homes. My wife has worked in that industry for 18 years and has never seen it as busy or seen so many apartment communities at 100% capacity.

So in all the carnage, there ARE opportunities. But in the end, succeeding in OUR business I believe comes down to one simple principal: solving a client’s communication problem.

A client calls and his boss wants a video to stream on their website. They’re utterly confused by the jargon they read on the websites of streaming video services. They open a trial account and try to upload a video themselves. It doesn’t work. They’re frustrated and just want their damn video up on their website and they want it play when a visitor clicks on it. We take their video and have it up and working THAT DAY. In my opinion, that’s an example of what clients want today. They don’t want explanations, they want stuff done. I could give a dozen other examples like that.

Now how do you find the clients that need our services? Well…we’ve found that it takes time and persistence. Not a good answer in this economy…but there are no quick fixes here. Get your company’s name and story in front of as many of your potential customers as often as possible. Make sure they hear from you in some way every single month.

Use every opportunity available to show how you can SOLVE problems and help companies tell their story more clearly and persuasively than their competitors. In my opinion, if you do that, you’ll have a better shot at surviving all this.

Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com

[Chris Blair]

Ron Lindeboom :

I know plenty of companies in this industry that are VERY dedicated and QUITE good and professional. They are hurting anyway and many are dropping like flies. Even companies like The Orphanage are closing — and only someone with little knowledge would argue that The Orphanage were not dedicated to making whatever they touched look and feel good.

I certainly don’t know the folks that ran the Orphanage and don’t doubt they are wonderful people who did incredible work.

But from a purely business point of view (and at the risk of angering people on here), when a company with their tremendous track record, sample reel and reputation suddenly and inexplicably closes, it’s a good bet there were some problems with their business model. Either pricing was out of whack with salaries and expenses, or their debt load was too high, or revenue was too dependent on a couple of large clients….or even a combination of those and other red flag issues simply snowballed.

Just because a company and its people do great work doesn’t magically make them good business people or guarantee financial success. They were probably GREAT people on many fronts, but most of us would like to think that a company with their reputation would have a HUGE advantage over us smaller fish in this economy. And in this case it didn’t prove to be true.

I want to be clear that I’m not knocking these guys or anyone on here who knows them and might know more about the reasons behind their closing. It could happen to any of us…especially if, as mentioned above, you have 1 or 2 very large clients that drive your sales.

But I’ve got to think there is a bigger story behing their problems than just the economy. Anybody remember Pittard-Sullivan from the late 1990’s? They were an internationally recognized branding giant with a client list that was dizzying. They suddenly closed shop in 2001 claiming they had too much work tied up in the dot-coms that went bust. But if you looked at their client roster you had to ask yourself, “how was that possible?” How could losing a few clients bankrupt the entire operation with a client roster that included what seemed like half of the Fortune 500?

They also did incredible work, so it seems there had to be more going on from the business side than just fallout from the dot-com collapse.

Anyway…Ron makes a great point that the issues affecting some companies are many and for some, they just won’t be able to figure them out before it’s too late.

Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com

[Brendan Coots]

While I can’t speak to all of their business practices, I do know that they were extremely good at cost control and budgeting, they had a fairly stable list of top-notch clients and were tripling in size year over year. A few years ago Stu made it clear that Hollywood was killing its vendors through dramatic cost cutting and every-increasing expectations. We all experience that, but he laid out a pretty clear case that this was different, and bound to end in disaster. I would also guess that they tried to be too many things at once by developing out a commercials division and animation studio.

It goes without saying that when a business fails it is because of a failure in the business plan, but not many people successfully predicted that the economy would shed 50% of its value in less than one year. That’s a little tough to plan for.

Brendan Coots
Splitvision Digital
http://www.splitvisiondigital.com

[Mick Haensler]

As in many industries, how this economy is affecting things runs the gamut from those closing their doors to those actually increasing business. For me I guess it’s somewhere in between. January was OK, February absolutely sucked with March picking up a bit. As of yesterday, it looks like April will pick up the slack for the whole quarter! I can’t believe how many jobs I have on the books so far. I believe the increase is due in large part to a marketing push I did in February. Nothing huge, but it got me in the habit of promoting my business everywhere I went. Looks like it’s paying off.

One thing I will say that has made this whole thing easier is low overhead, access to credit, and cash reserves. Without those things in place, I would have been stressed to the max which makes me worthless at just about anything. With those things in place, I was able to relax, take things in stride, do some extra marketing, learn some new revenue generating skills, do some pro bono work, and most of all keep a level head.

Mick Haensler
Higher Ground Media

[Walter Biscardi]

[Mick Haensler] “One thing I will say that has made this whole thing easier is low overhead, access to credit, and cash reserves. “

All three of those things, with low overhead being the most important in my book, are the three keys to running a successful business no matter what the economic climate is like.

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

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