And you thought your computer was expensive!
If you’ve only been in the industry for the past 10 or 15 years and your idea of a post production facility is an office with a few iMacs, then you have no idea what sort of fun you’ve missed. I’ve been fortunate to have been part of several teams that designed, installed, and operated a range of facilities in the 70s, 80s, and 90s. The most involved of these was Century III, the resident post house on the lot at Universal Studios Florida during the “Hollywood East” days. We went online in 1989 and made subsequent additions and changes throughout the 90s.
In the heyday of large post facilities, a typical layout might include several online edit suites, graphics, audio editing/mixing, and film-to-tape transfer. Depending on your business model, this might also include several offline edit suites and an insert stage. The rooms were often connected to a central machine room, which housed racks for routing, patching, video electronics, and the videotape decks. Of course, all of the suites were designed with client comfort in mind, since it was common practice for clients to be involved in the entire session. The most upscale shops in major markets often featured in-house kitchens with a resident chef just to serve clients and staff.
Before you could design the rooms and install the gear, you first had to purchase the equipment and work out a financing package. In those decades, large companies like RCA and Sony were key suppliers. Not only would they work out the total package of gear, but their financing arms would also develop the financing arrangement. It’s a bit like buying a GM truck and paying for it through GMAC. Any given package would include a certain percentage of other products. For example, it might be a large RCA deal, including RCA VTRs, cameras, and telecine hardware, but also Grass Valley switchers and CMX edit controllers. The exact mix of company versus non-company product would determine the leverage you had in negotiating discounts.
Once you had cut your deal with the hardware sales rep, next you would work on the financing. Savvy owners could sometimes work great deals with BOTH parts of the company – the best of all worlds. We were negotiating with Sony. They wanted us to include their Sony BVE-9000 linear edit controller in the package. However, we wanted to install CMX, which was the industry standard at the time. It was cheaper for us to include a BVE (and leave it in a box unused) in the package and then buy the CMX systems outright, than it would have been not to buy the Sony BVE at all. All because of the purchase and financing deals.
When you are talking about a multimillion dollar hardware purchase, you’ve got to play the financing right. That’s what killed many thriving post companies. At the start of the 80s, the prime rate for the best financial customers hovered around 20% interest. Your average facility owner paid a few points above that. This means that a lot of your revenue is going towards servicing the debt and not to pay down the principal. This can be acceptable if your gear is useful for many years and the revenue is steady or growing. It’s terrible if the technology changes. Five to ten years in, you still have a very expensive note. Meanwhile that new competitor that just opened up bought the newest gear, which cost less and at lower interest rates.
This is exactly what happened right as the industry made three important transitions – the shift to broadcast-quality nonlinear systems, the transition to HD, and the move from videotape to file-based mastering and delivery. Companies that didn’t read these tea leaves or were not financially solvent or nimble enough to quickly pivot were left in the dust. That VTR that cost you $100,000 to buy a few years earlier literally became a doorstop.
When you complain about the cost of outfitting a high-end computer that will likely be paid for in a few jobs – or the cost of the annual Adobe or Avid subscription – just think about what the industry used to be like.
©2022 Oliver Peters
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