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  • Why I think this is GREAT news

    Posted by Tim Wilson on September 9, 2009 at 4:08 pm

    In a thread below, somebody asks why some of the posters there think that BMD buying da Vinci is good news. I have my own thoughts on the matter, noting these are my personal opinions, working from more or less the same amount of knowledge you see reflected in our articles so far.

    We’ll be learning more and sharing ALL of it as we go, but for now, here’s a start.

    1) da Vinci has historically defined the upper range of what’s possible for color grading will now have the resources to reinvigorate those efforts. The rest of the industry will benefit from that leadership, whether or not they buy any da Vinci products.

    2) Engineers working on new interfaces, features and products had been cut. Under BMD, those engineers have been rehired, and their ranks will be expanding dramatically in the next two months.

    3) The cluelessness of da Vinci’s marketing reflected the overall cluelessness of the company. As a marketing weasel myself, I’m delighted to see more clue-iness in general.

    Kidding aside, marketing reflects a company’s understanding of its own products, and the needs of its customers. Bad marketing means many, many bad things. Good companies don’t do bad marketing. Bad companies don’t do good marketing. Nary an exception has ever walked the earth.

    4) As Rafael notes above, Blackmagic has been among the very smallest handful of companies who have sparked the digital revolution that we all benefit from…regardless of whether we work digitally or not.

    In particular, Grant Petty is one of the single people most responsible for that. He personally shepherded a number of innovations that have dramatically raised the bar for image quality in the current age, starting with bringing SDI to the desktop.

    He has also singlehandedly done more to shape the landscape of the market than anyone — disrupting pricing models has been only part of that.

    5) How’s THIS for disruptive? He’s honoring service contracts…but getting rid of service contracts! Yes, while increasing service, going so far as to add an entirely new office in New York.

    (Da Vinci had NO presence in New York! Are you kidding me?? More sign of cluelessness, and a sign that Grant absolutely gets it.

    Here’s the disruptive part. You and I can each name at least one company that would have been dead long ago if they had had to rely on product sales. Instead, they have used service contracts as their main — if not their ONLY — source of profit.

    Actually, I can name several companies like this. You probably can too.

    Why did Grant kill service contracts? Because they were making da Vinci too much money!!! He says so very plainly in his email. I have never really heard of anyone who has used the cost of the support contract in failed boards, and I think it’s a waste of money.

    Read that again — who was it a waste of money for? For YOU. For ME. It was costing customers far more than they were getting in return.

    To put that another way – the company was making too much profit from it. Therefore, it is dead.

    In fairness, some products are so complicated, and are designed to be used in custom configurations, in one-off workflows for specific facilities. Service contracts can make sense in those situations.

    But for a product that works? That’s reliable? Forget it.

    Talk about disruptive! Can you even imagine how much the landscape would change if everybody did this? Simply supported you for free, because you already bought it, and it mostly works! Insanity!

    5) Related to this: they want to ENCOURAGE second-hand ownership. They will support those new customers who bought used systems, without charging them extra for service.

    Keep in mind that Grant believes that these systems generally don’t need new parts or other repairs. That’s why he’s ending the issuing of new service contracts.

    So what’s in it for them? Upgrades down the road of course. But until then, secondhand customers will be getting free support.

    Can you think of another company that does this? I can think of a couple…but in THIS industry? Not so much.

    It’s obvious that the eventual upside will be upgrades. They’re clearly intending to make major overhauls to the product lines. People buying secondhand today will want a slice of that juicy goodness down the road.

    But seriously, do you see companies in this industry ENCOURAGING secondhand sales, and intentionally intending to support secondhand sales by adding value back to the company’s brand? I can’t think of any examples.

    7) Last note re: a BMD approach that I’d love to see rub off on the rest of the industry. If you go to the Blackmagic Design forum here at the Cow, you’ll see Grant’s name and picture right at the top of the page as a forum host. He can’t always post all that often, but many Cows will attest that he has been known to contact folks from Cow forums directly.

    Moreover, the other three forum hosts are people who not only work at BMD, but who IDENTIFY themselves as working for Blackmagic, and actually answer questions. Contrast this with other companies who either don’t directly participate with online communities, or expressly FORBID their employees from participating.

    The moral of the story: staying visible. Being held accountable. Public and free support. Everybody should do this. Blackmagic does. I. Love. It.

    Knowing that another company, with such a high profile and such a position of influence in its area, will be taking on these traits? I love that too.

    This is just off the top of my head. I’m still thinking about this, and looking forward to your replies, but here it is: I’m positively giddy to see someone so aggressive, so customer-minded, with such a track-record for innovation at the helm of a company that has deserved the marginalization that it has brought on itself…and from which we all deserve better…and, based on Grant’s past performance we WILL be getting.

    Anybody here have a problem with that?


    Tim Wilson
    Creative Cow Magazine!

    My Blog: “Is this thing on? Oh it’s on!”

    Don’t forget to rate your favorite posts!

    Joseph Owens replied 14 years, 8 months ago 2 Members · 1 Reply
  • 1 Reply
  • Joseph Owens

    September 9, 2009 at 6:08 pm

    Time will tell.
    All this has happened before, and there has been a plot twist associated with each. My understanding of the re-hires is that individuals who had been headed off the previous management’s agenda had been let go and they are now back on the track that the new owners are pursuing… consequently there is a group currently out of that loop — namely the adherents to the old track. But that may just be embellishment.

    I sincerely doubt that this will make any difference at the Apple COLOR end… might not affect the Final Cut workflow at all. Where it will be a threat is in the Lustre/Baselight/Scratch et al., market of $75,000 – $500,000 (and on up) systems which was daVinci’s territory up until multi-layer non-linear serve-grading came into favour/vogue, whatever. But — I suspect no Cadillacs at the bottom of the Cracker jack box, to re-borrow a phrase. Apple disrupted Silicon Color Final Touch2K from its $27K placement, including its service contract, so there is a bad, but not entirely dissimilar, example. The Apple offering now has the undeserved reputation of an uncomfortable side-kick (gimpy Deputy Festus to Sheriff Dillon) and although shows flashes of brilliance won’t ever get its own prime-time series, to stretch the metaphor to the breaking point.

    So, this does remind me of the automobile industry as a business model. There are plenty of examples of well known domestic brands taking control of exotics. Plenty of cachet, no practical upshot. FIAT owns Ferrari — a new Maranello or Enzo still costs more than a mansion… with servants, and they still need a new timing belt every year, and do not react well to winter conditions. (And if you don’t know how to drive the thing, it will kill you.) Everybody thought the private Formula One teams would benefit from factory ownership… BAR, Sauber, Jordan… eventually were taken over by, for example Honda, BMW, and so on… who are now in the process of withdrawing and/or shutting down those teams. (Err… the exception now being Brawn GP, but that is a special combination of gifts.) Not to mention the knock-on problems of corporate expectations, including the client relations that go along with that, and so on.

    Be extremely careful what you wish for. In any case, this is probably yet another nail in the coffin of what we have known up to this point as “telecine”, unless the non-linears start “reaching back” into that world. NOT easy, and “why”?


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