Surviving in the world of video post-production is a high tech, high priced, high stakes proposition. Through the magic of computer technology, the equipment required to stay competitive and to be able to deliver a dazzling piece of finished work provides more capabilities than ever. And though early generations of any given technology can come with staggering price tags, more established components and workstations are at more affordable prices than ever before. As varied as the production facilities are in Atlanta, they use many similar strategies in coping with the never-ending stream of available production tools and deciding which ones to bring in-house. However, they also have some surprisingly different philosophies when it comes to equipment acquisition.
As with most endeavors, knowledge is the key, so staying up to date with the dizzying array of available technology is essential. This can be accomplished through reading trade publications, involvement in industry organizations, perusing the Internet, and simply word of mouth. But assessing your client base and their needs, and weighing that against the capabilities of (and manufacturer claims about) equipment are equally important. In addition to the old bottom line, examining the processes and services you provide, creative needs, looking at learning curves of new gear, and whether new staff will be needed are all part of the equation to help determine what you want, what you can't live without, what's upgradable, and what might ultimately make a wonderful $50,000 boat anchor or coffee table.
"Typically, there's a trend for better, faster, cheaper," points out Jeff Blauvelt, President of Peachtree Post. Clients come to expect that, "you have to buy new equipment that you're not going to be able to charge more for." That was his experience in converting from analog to digital online - new equipment, but the same rates as before. "It makes the margins thinner, which makes being in business riskier. As a result, any mistakes are dangerous and repeated wrong decisions will be disastrous," he says.
That becomes a real concern when technology changes as quickly as it does in the post environment. Candace Alger, Executive Vice President at Crawford Communications, says that a lot of finesse is required to test the waters and determine which new toys will really fly and clients will accept. "We have a strategy of buying in over time so that costs are amortized," she says. This means implementing new pieces in existing rooms, like digital Beta Cams, changing out digital video editors, adding new edit controllers, and at the same time as developing plans for broader changes - like adapting for digital broadcast. Alger likens the process to balancing the various elements in a financial portfolio.
While a large facility like Crawford can cast a very large net over many different systems and technologies, other companies try to stay more focused on their acquisitions. Michael Koepnick, Director of Guillotine Post, has a client base interested in doing online and offline Avid production. He has the latest resolution upgrades and a 3D box and says, "I could easily spend more money on bells and whistles that I wouldn't need and my clients wouldn't ask for. You have to examine what you want to offer and tailor purchases around that."
Making the decision to go with Avid was as much a matter of brand recognition as technical considerations. Established less than a year ago, Koepnick believes the Avid name generates business. Although it cost more, he says, the speed of the system was also a determining factor in his purchase. "You can do just as sophisticated work (on Media 100), but it takes longer, which wouldn't be an issue if clients weren't sitting there." He is currently considering the addition of a third Avid as well as Digital Beta Cam in order to expand his finishing work and ability to generate production.
A potential buyer can get information about such things as real time operation from other users and associates, but what about hard core specs? As mentioned, a great deal of research is done on the Internet, although there are complaints that some web pages are no more than public relations pamphlets when what's needed is pricing information, performance specs, and details like pictures showing back panels and connectors.
Anne Fowler of Niche Video Products says that, in fact, it can be more difficult to assess equipment than in the past, not only because of performance being so dependent on software (making side by side demos tough), but also because of a drenching torrent of marketing hype and misinformation. Heralded by the evolution of non-linear editing systems, there is also new lingo and a redefining of terms. The result is marketing that sounds more like car advertising. "It amounts to 'How does it look and feel?' and 'Wouldn't you like to drive this baby?'" says Fowler. "It's more fluff and very little what's under the hood."
Although manufacturers were determining where the market was going for several years, Fowler adds that technology has now begun to catch up with the marketing hype, resulting in more capable equipment. "Most of the time it's not the same generation equipment customers bought, though. They've had to go through several upgrades and additions to get there," she says.
Once the decision has been made to go with new gear, there are still hurdles to overcome in bringing clients along for the ride. A year-and-a-half ago, 11th Street Post made the decision to convert its editing facilities to 601 digital. "It was a tough sell because if clients didn't see lots of whirring machines and switchers and racks of gear, they didn't feel comfortable," says President James Klotz. The company has kept rates the same since the investment, and Klotz says ultimately it cost less than if all new equipment had been brought in to get a linear suite up and running.
In most cases, however, there seems to be a symbiosis between clients and facility operators - a kind of mutual evolution of need and desire. Since everyone has access to the same information, the best way for operators to be proactive is to listen carefully and make accurate assessments from client input. Charlie Willis, President of Magick Lantern, says this practice has enabled his facility to "want the same things at the same time as clients. We listen to them all the time and analyze what they want to do, and then find ways of helping them do that." Willis says Magick Lantern brought in its Quantel HAL system not because it would attract clients, but because it would be the perfect tool for carrying out what they needed.
Financing options and recommendations for new equipment are, not surprisingly, directly tied to all the usual elements that determine economic leverage, or lack thereof. Startup companies have fewer options than established operators. Leasing is always on option, and one school of thought maintains that you can protect yourself against obsolete technology by leasing rather than buying. But as Jeff Blauvelt of Peachtree Post points out, banks offer better rates, and by the end of a lease you've probably paid out enough to have owned the system anyway. (Peachtree spends from $500,000 - $700,000 each year on equipment.)
James Klotz agrees that most lease deals are not that attractive, unless they provide some needed tax benefit. However, 11th Street Post did enter a lease agreement in its $400,000 audio suites upgrade to Fairlight equipment. The manufacturer offered a leasing program backed by its own capital in an effort to gain market presence. The upgrade was prompted by the buyout of Studer, after which Klotz says there was concern over continued support for Dyaxis II, which had been the primary system in 11th Street's audio suites.
In most cases, 11th Street's acquisitions had been executed through loans backed by real estate. (The company owns its building.) Klotz says, "You try to tell a bank what a D2 machine is and they're lost, but they understand backing the purchase with real estate." He adds, though, that there is no formula, and that "you have to look at every option every time you go through [a major purchase]." For smaller operations without benefit of an in-house CFO, he recommends getting some sort of expert advice. He says that a lease deal that sounds good could end up costing thousands of dollars if entered into without adequate research, and warns against jumping into offers that sound great, but that provide equipment that isn't best suited to your needs.
Checking out as many options as possible makes for good common sense, but in the beginning, leasing through vendor recommended sources may be as good as it gets. Guillotine Post's Koepnick says that option helped with his Avid purchase, but that looking at the loan now, he could probably do better through refinancing. Any future purchases will probably be made with a bank loan with adjustable payments. "That way you can pay more when you're having a better month and pay it off faster," he says. "You don't want to be stuck with that fixed payment."
The one wild card that exists in planning for future equipment purchases is high definition TV (HDTV). Although the Federal Communications Commission (FCC) has mandated its implementation, there is no definite timetable nor has an industry standard been agreed upon. So in this case, where there's smoke there may not be fire.
Nonlinear leaders like Avid and Media 100 have no formal specifications for compatibility with HDTV, and probably won't until broadcasters develop a working standard, according to Michael Davis of Digital Solutions. As a result, there is no technology that promises to be compatible. "It's a nonissue in our world currently," says Davis. "It's on everyone's mind, but it's not something we can address."
So what's a post facility to do? Most seem to be proceeding cautiously and trying to position themselves for the future. Charlie Willis at Magick Lantern says that his goal is to have a 100% component digital facility, and while he is looking at purchases that will include new cameras, some vendors are recommending delaying until a firm HDTV standard has been adopted. He points out that consumers will ultimately drive any momentum behind HDTV, so it's not something that will happen overnight, especially with new consumer sets currently costing many thousands of dollars.
Crawford Communications' acquisition of a Phillips/BTS Spirit Data Cine is perhaps representative of the few transitional moves made in the Atlanta market toward HDTV. The unit is a telecine capable of transferring high definition signals through a unique lensing system. Candace Alger says they are delighted with the results so far. Only time will tell how Crawford and the rest of Atlanta's post community will make the transition to high definition.
In some ways, video post production would seem to substantiate the adage that "he who dies with the most toys wins." However, everyone seems to win if proper research is put into creative, acquisition, and financing decisions. Even within such a fiercely competitive industry, there are definitely trends that benefit everyone. Digital Solutions' Davis says that entry level digital workstations are now available at $30,000, a new low. Evolving computer technology means new opportunities are constantly being created by developers, with $100,000 systems capable of what only $500,000 systems could do in the past. These benefits all come at the literal and figurative expense of constant refinements, upgrades, and new learning curves which will ultimately create competitive incentives and deliver great benefits to the end user. Davis admits, though, that keeping up with it all is a great pain in the neck for everyone.
Undeniably, however, the "pain" is going to keep on coming. The strategic crystal ball shows continued movement to nonlinear digital suites, uncompressed editing systems, further development of server technology, and the prospect of that 395 lb. gorilla (at least for now), HDTV. It's a delicate balancing act between creative direction, client needs, and research, research, research. As James Klotz puts it, "in every upgrade and equipment acquisition the issues are the same, but they're all different at the same time. It's your gut feeling about what you think is right to do."
In the meantime, as Atlanta's post community keeps thriving, technology will continue its inexorable movement forward to help make production more exciting. At the same time, the bar measuring creative inspiration will certainly be raised even higher.