HPA’s sales luncheon on September 30 came at a good time. With momentum returning to the industry, people are ready to learn from past mistakes and prepare for success . . . as opposed to running for cover.
“I don’t care about the no’s, I just want the yes’s.” – Robert Katz, owner, Amicus Entertainment
It’s been a tough year filled with a lot of intense fear and worry. Twelve months ago, we saw an economy heading toward collapse. But we are now in a low plateau. People are not as shell shocked as they were in February. Business is not as good as a year ago, but it is turning around. For example, the number of pages in Production Weekly that lists productions taking place in town grew from 10 to 21.
“The post industry has seen tough times before.” – Bob Solomon, former president, Ascent Media
The post industry has seen dire times before in the form of labor unrest, production stoppages and in the transition to high definition (HD). Bob pointed out that years ago everyone wanted HD, but no one wanted to pay for the new infrastructure. Sales reps had to become creative and generate value by solving business problems for vendors in downstream distribution. Panasonic and Sony needed to sell HDTVs, so they helped fund the production of HD content to get the industry past the tipping point.
But the industry is structurally changing, as well.
The entertainment industry does not adapt as fast as other industries. Once producers find people and a process that works, they keep it and avoid risking unproven techniques that could harm the production schedule. A positive change is occurring: aggressively low budgets are forcing producers to switch to digital cameras and tapeless workflow, and once they are comfortable in the new digital paradigm, they seldom go back.
As the cost of post services are pushed down, the roll of talent becomes even more exposed. Bob said there are simply too many colorists in town – the great ones will continue to work, everyone else will either need to improve or find a new line of work.
“Now the one who controls data wins.” – Bob Solomon
New content distribution pathways (iTunes, Hulu, other IP delivery services) are reshaping revenue models and are eating away at the extremely profitable studio-dominated distribution systems. Bob mentioned that the broadcast TV advertising support model is not pretty picture. If they do not find alternative revenue, they will be forced to change. Cable networks, on the other hand, are benefiting because their revenue structure keeps them insulated from declining ad revenue. Look to cable to grow content while networks reduce original content by “Jay Leno-ing.”
“We’re seeing the ‘Walmartization’ of content.” – Rob Katz
Back in 1991, Rob Katz sat on the board of Walmart with Sam Walton and heard him say that Walmart would never sell something made outside of the US. Within four years of Sam’s death, Walmart sold nothing made in the US. Today, Walmart asks vendors to sell product to them at a loss, which basically amounts to paying Walmart for the privilege of having their items on the shelf. Vendors then use Walmart ties to increase sales at Target, Sears, etc., because doing business with Walmart is a “legitimizer.” When a sound supervisor acquiesces to a 50% drop in a sound package, the client will not think twice about asking for that cut again.
People are still making movies; but garbage movies will not be made, and good movies will be made for less. $12 to 14 million pictures are now being made for $7 to 8 million, with everyone across the board taking a haircut. People are now working for $75K against $600K instead of $300K against $600K. Rob used to be unable to get the talent he wanted, but now that’s changed.
“I was the only one who asked the client what they needed.” – Charlie Mitchell, SVP, Electric Pictures Solution
In a recent bid, Charlie asked for the client’s core needs (live TV with no room for error) and guaranteed his solution would be able to handle his needs at a fair price. When he won the contract, he asked the reason for the win. The client said he was the only one to ask what they truly needed and earned their trust. Even in the worst economy, it’s not always about price.
“The more info you know, the more you sell.” – Naida Albright, Industry Sherpa
Everyone advised getting out there and educating yourself when it’s slow so you can know something that no one else knows. Naida recommends talking to your vendors and learning about as many changes in technology as you can. Bob talked about studying global trends and reading outside your market. You can then bring information back to your industry.
Everyone said that learning about your clients needs, specifically their workflows and points of pain, is always a good idea. Rob mentioned that he’s now learning about 3-D and finds that none of his trusted DPs knows anything about it. He points out that if he is looking, there are probably others who are looking, too. He doesn’t buy until he needs something, but when he’s ready he wants to know whom to trust.
“Make your cold calls and stop blaming the economy.” – Charlie Mitchell
Charlie has heard many sales people blame their lack of sales achievement on the economy. He feels that people simply have forgotten the techniques they used earlier in their careers, like cold calling, to get ahead. All too often they email when they should be calling and call when they should be meeting in person. A year and a half ago, Rob never heard from post companies. Now he gets 8-10 calls a week from post, VFX and sound companies. Many are calling from outside Los Angeles from business centers like New York and Toronto.
Make more time for virtual networking and actual networking.
Unless you’ve been hiding under a rock, you’re overwhelmed with information about social media. But when Bob asked how many people have Twitter accounts, fewer than 10% responded. These toolsets cost little to nothing and are a very effective way of spreading your message. So get on it, people!
There were also good suggestions about physical networking. For example, make sure you meet with the top three people in the room before you have your first drink!
Customer service is always valuable.
Has customer service held its own in this downturn? On the production side, budget constraints can lead to understaffed (and underqualified) teams that place a bigger burden on post to get in early, be proactive, rather than react to situations. Unfortunately, when budgets cannot pay for the additional problem-solving required, the client may have a bad experience. The bad experience may lead to the loss of business, which requires “reinvestment” in a better customer experience. A good salesperson needs to defend the client from himself in this situation.
Where are we going in the future?
Consumers can already move content around easily, but they are asking for a device-agnostic world where they can watch anything, everything, everywhere. They want to start watching something on the road and pick up from where they left off at home on the TV. Movie theaters are in better shape than television, largely because audiences prefer theaters and love the communal experience. Soon, some companies will be out of business, the broadcast market will go through an upheaval, and a slew of new companies that don’t exist today will emerge and reshape the landscape.
We’d love to hear from you. Are you seeing signs of rebound or changing your business in any significant way? Please add your comments below.
Regards,
Bill