Setting up a production house from scratch ...
 

Hey Everyone,

I'm researching what it would take to setup a video production house from scratch.

I've got a reasonably good idea of what I need to edit audio/video and create motion graphics/3D but I'm still of the mind that big budget productions need to be edited on high dollar editing systems with unattainably high priced software attached extravagant storage solutions.

When I started my education the personal computer was only capable of so much ... then you jumped into Silicon Graphics workstations and dedicated Media 100/Avid type editing systems for truly high end projects. The difference between low and and high end was about $100,000.

But these days, it seems like everything is so damn cheap and so damn good! And that transition happened so fast I'm not sure if this is too good to be true ... or maybe I'm missed a few evolutionary steps in technology along the way?

Shouldn't it be more complicated than this?

I watch as my $2500 Canon 5D destroys the old $80,000 Betacam SP I was trained on ... and my 5 pound, $2000 MacBook Pro computes the pants off the $100,000 SGI workstation I drooled over not more than 10 years ago. And did you know that you can get a 1 terabyte hard drive, spinning at 10,000 RPMs for about $150!

And then I look into the near future and I see all this solid state technology ... cameras like the Red Scarlet (granted, that may take another decade to actually come out) and that new Arri ALEXIA!

Can I seriously buy half a dozen Mac Pros loaded up with the Adobe Master Collection and Maya and call that a production facility? (Of course I need personnel, but that part hasn't changed.) I mean, I know i'll need some other things but it seems like once you have a workstation and some software ... you can practically re-make Lord of the Rings ... with enough time talent and money of course.

Has anyone here gone beyond the lone gunman freelance world and started their own studio?

I've not been that lone gunman who went on to found a studio, but, I did help a 12-person production co. become a 140-person production house / training & marketing producer.

IMO the first question is sales and relationships with clients. We really didn't have stable growth until we established an ad-agency style process with account execs, account supervisors, and account developers. In my experience, "build it and they will come" doesn't work and isn't sustainable. If you've got the client relationships all avenues are open to getting their work done. If you don't, you're playing around with gear. "All avenues" meaning that you can rent/purchase/subcontract or even have some work done in New Zealand and really remake "Lord of the Rings". You can spread the work around, or build a cadre of dedicated employees and a big pile of equipment, whatever.

If you were here in the upper left corner of the country I'd suggest editing in FCP or AVID, because you could not reasonably expect to find many editors proficient in Premiere - you'd have to train them. This is especially an issue when that one extra project comes along and you have to get a contractor in to edit on second shift.

There are no more on-line editing houses here; one still survives as a high-end graphics house, another survives because they also produce and never grew their post business beyond two edit bays.

Believe it! You can do a lot for a lot less nowadays. In the past, you needed to have a ton of expensive equipment to make anything look professional; nowadays, it's the talent, vision and manpower that matters. As long as you have that, and you invest a little bit of money on the right tools, and manage it well, you can have a production house.

Don't get too stuck into what specific "tools" you use; the final product will depend on the actual vision. I've seen a single guy film and edit video with a Sony handy cam and FCP that looks much more pro than a director with two red cams, full lighting and a team of 3. I'm not saying you should go for the cheapest, but then again, more expensive doesnt mean more quality productions.

It's Like Scorssese predicted. The day HAS arrived where a kid can walk around with a full, cinema quality production house in his backpack.

A T2I, a macbook, a Zoom H4n, a Shotgun Mic and couple of small lights. Thats it. The tripod can be light duty since the cam weighs 2lbs.

Amazing times, truly.

It is easy to get hung up on the concept of a production house. But this is almost a myth these days. To have a big production house you need a lot of work. They are not practical to have because it is tough to sustain a lot of work and overhead.

Do your craft and find your level. I do not want to grow my business beyond myself doing most of everything and hiring some contractors from time to time. I do not want the hassle of employees.

A studio would be nice for a greenscreen setup but it is all about workload vs overhead. Quite frankly, sales or new customers is the tough part and what stands in the way for me.

But I do not need a studio. I am quite happy being a lone gunman that can produce broadcast quality material.

It is more complicated than that, in both production and post production.

Production - i.e producing, doesn't require technology - it requires contacts, networks, a reputation, talent, expertise AND keeping up to date with the ever changing needs of your clients and delivering on them without interruption to regular services.

Post Production - i.e a lot of what you are talking about - still has significant hardware and software expenses when you talk about delivering industry standard deliverables for either television or theatrical deliverables. TVC delivery in most markets can now be done electronically and thus is the greatest example to date where deliverables CAN be low cost, but to be really successful in TVC delivery is much more about connections then talent than it has ever been about technology.

Yes you can do amazing things for very little money these days, but more talented people can do even more amazing things with the same money, and more talented people with even MORE money can blow you out of the water a lot of the time - and more talented people, unsurprisingly, tend to end up where the money is a lot of the time (although not always, often for personal reasons, which I often agree with).

That being said - there is definitely a growing culture of 'good enough' coming from the latest technological revolution, and also technology are making the tools of the trade cheaper.

However, the REALITIES of running a business are the same. You buy a cheap tool instead of a high cost market differentiating capital asset - it takes less time to pay it off, but because it is cheap there is more competition with the same tools, so because the tool does not differentiate you, you have to differentiate more with marketing and results. Because the tools are cheap, there are more players in the market, and it's harder/more expensive to have your work stand out from the crowd, and there is more competition for work so the amount clients are willing to pay may become lower, irrespective of respective quality. You have a high cost differentiating capital asset, you had best have planned ahead to ensure can get the quantity of work in with sufficient margins to pay it off. Again, how high a High Cost differentiating asset is may have come down, but chances are, the lower the cost, the more common it is, and the less it differentiates you.

Meanwhile, full facility level post production and equipment rental still fulfill a need and workflow that lower cost solutions have difficulty supplying to, because they require and allow for a certain concentration of equipment, knowledge and technology that allows them communicate, standardize and measure up to the exacting standards of the worlds to broadcasters/distributors.

Lower tier markets have always had a 'make do' attitude, and you can now get a lot more quality when you are just 'making do'. I have yet to see any real evidence that you can make any more money from it though.

I have some friends who will contribute their talents to any particular project as subcontractors.

One of the guys serves as the director or producer. Then he'll call people he knows for specific tasks. Perhaps someone has Glidecam experience. Another has access to a jib. Some are good at 3D, someone else is a green screen expert.

The crew grows and shrinks depending on the needs of a particular job.

This solves several problems: not having to pay for employees who might be idle. Having good talent available for specialty work. Avoiding large capital investments in equipment.

The subcontractors also work on other projects. So in this business model, having a good network helps everyone.

Dean is wise. I started small, went the full production house route. I am now small again and work as Dean suggests. Sooooo much more profitable. Funny. I now work less and make more.