10 people invest $10K in a production company at DVinfo.net

Sean J. Manning · June 7th, 2007, 10:25 PM

Today I was thinking about how expensive equipment is and the fact that it will probably sit in your closet a large percentage of the time, when I had the following simple idea:

You get ten people who live in the same city to invest $10K each in a $100K worth of equipment, and then everyone can simply take turns using the equipment.

You could buy two Red One's, and a ton of other equipment.

Itd be awesome to have a $100k worth of equipment at your finger tips for the cost of $10K.

Kevin Shaw · June 7th, 2007, 10:28 PM

Yeah, but then you'd have to split the revenue received ten ways, plus argue over whether that should be equal shares. I think the objective you're describing is satisfied by rental shops...

Sean J. Manning · June 7th, 2007, 10:45 PM

no, in my example each person would have to fund their own productions and recieve all the profits. This is just a bunch of people chipping in and sharing equipment.

I think rental houses are a frigging rip off.

Peter Jefferson · June 7th, 2007, 11:23 PM

lol and what if i had a job which clashed in with yours...
or what if a shoot went over time and required an additional several days shooting due to bad ether or what have you, BUT its been pre booked for another one of those investors..

no rental shops are where this is at, and best of all the rental fees are FULL tax deductions as opposed to a percentile of depreciation

Dylan Couper · June 7th, 2007, 11:25 PM

Whoa Sean... don't go so hard on rental houses. Maybe they aren't for you, but they provide a great service to a whole lot of people. Sure it's better to buy, if you can afford it an make it worth your while, but for a lot of people who need a variety of tools, owning all of them isn't an option.

Anyway, I like your idea in theory but with 10 owners, it won't be long before schedules and attitudes caused a train wreck.

Bert Smyth · June 7th, 2007, 11:45 PM

It would only work for 10 people who for some specific reason want high end gear for their independent productions. In business terms, I think its a real myth that its "the gear" that holds you back... "ah... all the great jobs I'd get if I only had that new piece of equipment". Marketing is far more important for running a sucessful business, and rental houses provide a valuable service for projects that have a decent budget. While I know sometimes rental costs can seem exorbitant, throwing $100k at the problem is equivalent to beating the high cost of airline ticket prices by buying your own plane.
There are some film societies out there that think along your lines, and will offer equipment rental at very low prices for members. Sometimes the rental comes with no strings attached, sometimes they say it has to be a indie film production. One place locally offered the same light kit that at the rental house was $150 per day for $50. Check around, you should be able to find some alternatives. Our local TV cable company has some really good gear that is free to use by the public, so long as the finished product can be aired on its station. You still retain ownership of the work, and can do whatever you want with it after its aired.
Probably what bugs me the most about rental houses is just the time it takes to pick-up and drop off the gear.

Sean J. Manning · June 8th, 2007, 12:18 AM

im not saying that 100k of equipment will make someone a good filmmaker, im just saying that i would rather spend $10k to use $100k worth or stuff then to spend $10k to use $10k worth of stuff.

rental houses charging 1/5 of the products value for a weeks worth of use is highway robbery. people making movies dont have alot of dough, so capitalism plays its role. I am offering an alternative.

Ken Diewert · June 8th, 2007, 12:40 AM

Sean,

I don't know about Bangkok, but most cities have film-makers cooperatives where you can join and get cut rate rental rates on lighting, grip gear etc. Typically though it's not hi-end stuff.

What you're talking about makes sense, but think about it. Trying to get 10 guys to agree on which camera to purchase...

Bill Davis · June 8th, 2007, 01:24 AM

It's fun to think about but it doesn't really work.

You've got 10 "owners" each of which wants to do a project a year - so you divy up the year in advance? The "owner" that gets summer OR dead of winter slot just has to suck it up?

With 10 owners everyone should get around a "five week" share. What if YOUR project has delays and you go SEVEN weeks? What if your talent is only available in the middle of someone elses shoot? Who adjudicates the conflicts? What if FIVE of the projects takes seven weeks? How do the teams squeezed into a few leftover weeks feel? Who's gonna get stuck with a week or two in the middle of a sweltering summer ? Are they just gonna have to suck it up and hope for better luck next year?

With a shared resource like this, the cold hard reality is that each team gets to LEARN how to operate the gear for five weeks, after which they have FORTY SEVEN weeks to sit around waiting until they get to learn some more. Not good for building familiarity and/or expertise with complex equipment.

The logistics of an arangement like this will almost guarantee that people end up getting pissed and angry with each other.

My two cents anyway.

(and probably worth at least that! ;)

Ervin Farkas · June 8th, 2007, 06:05 AM

While reading this thread I remembered my good old high school political science teacher. I grew up in a communist country in eastern Europe. The theory was that we lived in socialism but we were aiming toward communism. And this is how this teacher explained us what communism is going to look like: everyone will give (in terms of work) what he's capable of, and everyone will receive what he needs. In other words, you need a pair of shoes, you simply walk into the warehouse and choose your pair of shoes... there will be no guards to watch you, because your conscience will be, by the time we reach communism, so high, the system will never be abused. Well, what happened... we all know! Communism is history, because it's a wonderful idea only until it comes to meet reality.

Even if you can find those ten interested videographers, your needs (let alone your ideas on choosing the equipment) would crash this whole cooperative in a heartbeat. So just forget it... for ever! It simply does not work.

Noel Evans · June 8th, 2007, 07:20 AM

Quote:

Originally Posted by Dylan Couper

Whoa Sean... don't go so hard on rental houses. Maybe they aren't for you, but they provide a great service to a whole lot of people.

Me included. Saves me a whole lot of $ when a client asks for x y or z. When x y or z pay well maybe 4 times a year but to be equiped(by buying) would cost XYZ put together.

With renting your always ready for anything. My motif - have a great relationship with your local rental company that has what you need.

Brian Mills · June 11th, 2007, 04:52 PM

I don't see why you would want to spend $10,000 for four weeks a year with a $100k camera package when you could rent the same package for four weeks for about the same cash. Maybe much less if you are a good negotiator. And then ALL the cost of maintenace/upkeep will be on their heads, not yours. And next year, there will probably be a NEW camera package you could rent and not be stuck in the same deal.

It's kind of like a timeshare: why lock yourself into the same thing at a fixed price every year when you don't save any money over staying in a hotel (or in this case, renting)?

And what do you do when you want to get out f the deal
? Find someone to buy your share of a now used package? How much do you think you could get?

Jon McGuffin · June 15th, 2007, 03:33 PM

Yeah, I agree with just about everybody else here who thinks, in theory, this sounds like a really fun and exciting idea, but in reality, it would likely never work. It's hard enough to get 2-3 guys all on the same page and working together, let alone 10.

I also look at it in terms of the care of the equipment and the liability if something is broken or lost. In a group of 10, you're assured to get some knucklehead who, usually out of negligence not intent, will undoubtedly break or ruin the equipment. Who's responsibility then is it to fix? I could just see the guy that is at fault denying it and then never fixing the equipment. Then the other 9 guys have to dip back into their pockets to fix equipment this guy is going to break again?

The *only* way I could see this maybe working would be for 10 guys to get together and actually create a rental house with the "fringe" benefit of, if the camera equipment is not on an existing project to a paying customer, it can be checked out by the owners and that the liability of the owners would be 100% equal to the customer.

This way, you'd have spent $10,000 on something that can actually earn you a return and you now have access, though not necessarily first right, to the equipment.

Does that make sense?

Jon

Nick Hiltgen · June 20th, 2007, 11:23 PM

Quote:

Originally Posted by Sean J. Manning

im just saying that i would rather spend $10k to use $100k worth or stuff then to spend $10k to use $10k worth of stuff.
.

Thing is that's not really accurate is it? I mean when you spend $10K at a rental house you're getting way more then $10K worth of gear, way more then $100K worth of gear, you don't own it true, but when the next movie comes up you'll have access to the next thing (instead of being stuck with your original 10 investment)

Adam Bray · June 21st, 2007, 01:12 AM

How do you decide what equipment gets bought with the $100K? What if I like JVC cameras and you like Canon? You want to buy RED cameras and I want 16mm film? You want to buy dollies and steadi-cam equipment and I think theres no need for them? What if Joe borrows the RED and his PA drops and breaks it, meanwhile Mike is out with the XL2 and it gets knocked off the tripod and breaks also. Who's gonna pay for those repairs? ARE YOU???

Your idea would never work.

June 7th, 2007, 10:25 PM	#1
Sean J. Manning Regular Crew Join Date: Jun 2006 Location: Bangkok Thailand Posts: 35	10 people invest $10K in a production company Today I was thinking about how expensive equipment is and the fact that it will probably sit in your closet a large percentage of the time, when I had the following simple idea: You get ten people who live in the same city to invest $10K each in a $100K worth of equipment, and then everyone can simply take turns using the equipment. You could buy two Red One's, and a ton of other equipment. Itd be awesome to have a $100k worth of equipment at your finger tips for the cost of $10K.

June 7th, 2007, 11:25 PM	#5
Dylan Couper Wrangler Join Date: Jun 2002 Location: Vancouver, British Columbia Posts: 8,314	Whoa Sean... don't go so hard on rental houses. Maybe they aren't for you, but they provide a great service to a whole lot of people. Sure it's better to buy, if you can afford it an make it worth your while, but for a lot of people who need a variety of tools, owning all of them isn't an option. Anyway, I like your idea in theory but with 10 owners, it won't be long before schedules and attitudes caused a train wreck. __________________ Need to rent camera gear in Vancouver BC? Check me out at camerarentalsvancouver.com

June 8th, 2007, 12:40 AM	#8
Ken Diewert Trustee Join Date: Mar 2006 Location: Vancouver Island, Canada Posts: 1,200	Sean, I don't know about Bangkok, but most cities have film-makers cooperatives where you can join and get cut rate rental rates on lighting, grip gear etc. Typically though it's not hi-end stuff. What you're talking about makes sense, but think about it. Trying to get 10 guys to agree on which camera to purchase... __________________ C100, 5DMk2, FCPX

June 8th, 2007, 06:05 AM	#10
Ervin Farkas Inner Circle Join Date: Aug 2005 Location: Atlanta/USA Posts: 2,515	Communism? While reading this thread I remembered my good old high school political science teacher. I grew up in a communist country in eastern Europe. The theory was that we lived in socialism but we were aiming toward communism. And this is how this teacher explained us what communism is going to look like: everyone will give (in terms of work) what he's capable of, and everyone will receive what he needs. In other words, you need a pair of shoes, you simply walk into the warehouse and choose your pair of shoes... there will be no guards to watch you, because your conscience will be, by the time we reach communism, so high, the system will never be abused. Well, what happened... we all know! Communism is history, because it's a wonderful idea only until it comes to meet reality. Even if you can find those ten interested videographers, your needs (let alone your ideas on choosing the equipment) would crash this whole cooperative in a heartbeat. So just forget it... for ever! It simply does not work. __________________ Ervin Farkas www.AtlantaLegalVideo.com

June 11th, 2007, 04:52 PM	#12
Brian Mills Regular Crew Join Date: Sep 2006 Location: Las Vegas, NV Posts: 126	This is not good economics I don't see why you would want to spend $10,000 for four weeks a year with a $100k camera package when you could rent the same package for four weeks for about the same cash. Maybe much less if you are a good negotiator. And then ALL the cost of maintenace/upkeep will be on their heads, not yours. And next year, there will probably be a NEW camera package you could rent and not be stuck in the same deal. It's kind of like a timeshare: why lock yourself into the same thing at a fixed price every year when you don't save any money over staying in a hotel (or in this case, renting)? And what do you do when you want to get out f the deal ? Find someone to buy your share of a now used package? How much do you think you could get?

June 7th, 2007, 10:28 PM	#2
Kevin Shaw Inner Circle Join Date: Sep 2004 Location: Sacramento, CA Posts: 2,488	Yeah, but then you'd have to split the revenue received ten ways, plus argue over whether that should be equal shares. I think the objective you're describing is satisfied by rental shops...

June 7th, 2007, 10:45 PM	#3
Sean J. Manning Regular Crew Join Date: Jun 2006 Location: Bangkok Thailand Posts: 35	no, in my example each person would have to fund their own productions and recieve all the profits. This is just a bunch of people chipping in and sharing equipment. I think rental houses are a frigging rip off.

June 7th, 2007, 11:23 PM	#4
Peter Jefferson Inner Circle Join Date: Apr 2003 Location: Aus Posts: 3,884	lol and what if i had a job which clashed in with yours... or what if a shoot went over time and required an additional several days shooting due to bad ether or what have you, BUT its been pre booked for another one of those investors.. no rental shops are where this is at, and best of all the rental fees are FULL tax deductions as opposed to a percentile of depreciation

June 7th, 2007, 11:45 PM	#6
Bert Smyth Regular Crew Join Date: Mar 2007 Location: Portland, Oregon Posts: 178	It would only work for 10 people who for some specific reason want high end gear for their independent productions. In business terms, I think its a real myth that its "the gear" that holds you back... "ah... all the great jobs I'd get if I only had that new piece of equipment". Marketing is far more important for running a sucessful business, and rental houses provide a valuable service for projects that have a decent budget. While I know sometimes rental costs can seem exorbitant, throwing $100k at the problem is equivalent to beating the high cost of airline ticket prices by buying your own plane. There are some film societies out there that think along your lines, and will offer equipment rental at very low prices for members. Sometimes the rental comes with no strings attached, sometimes they say it has to be a indie film production. One place locally offered the same light kit that at the rental house was $150 per day for $50. Check around, you should be able to find some alternatives. Our local TV cable company has some really good gear that is free to use by the public, so long as the finished product can be aired on its station. You still retain ownership of the work, and can do whatever you want with it after its aired. Probably what bugs me the most about rental houses is just the time it takes to pick-up and drop off the gear.

June 8th, 2007, 12:18 AM	#7
Sean J. Manning Regular Crew Join Date: Jun 2006 Location: Bangkok Thailand Posts: 35	im not saying that 100k of equipment will make someone a good filmmaker, im just saying that i would rather spend $10k to use $100k worth or stuff then to spend $10k to use $10k worth of stuff. rental houses charging 1/5 of the products value for a weeks worth of use is highway robbery. people making movies dont have alot of dough, so capitalism plays its role. I am offering an alternative.

June 8th, 2007, 01:24 AM	#9
Bill Davis Trustee Join Date: Jan 2004 Location: Scottsdale, AZ 85260 Posts: 1,538	It's fun to think about but it doesn't really work. You've got 10 "owners" each of which wants to do a project a year - so you divy up the year in advance? The "owner" that gets summer OR dead of winter slot just has to suck it up? With 10 owners everyone should get around a "five week" share. What if YOUR project has delays and you go SEVEN weeks? What if your talent is only available in the middle of someone elses shoot? Who adjudicates the conflicts? What if FIVE of the projects takes seven weeks? How do the teams squeezed into a few leftover weeks feel? Who's gonna get stuck with a week or two in the middle of a sweltering summer ? Are they just gonna have to suck it up and hope for better luck next year? With a shared resource like this, the cold hard reality is that each team gets to LEARN how to operate the gear for five weeks, after which they have FORTY SEVEN weeks to sit around waiting until they get to learn some more. Not good for building familiarity and/or expertise with complex equipment. The logistics of an arangement like this will almost guarantee that people end up getting pissed and angry with each other. My two cents anyway. (and probably worth at least that! ;)

June 15th, 2007, 03:33 PM	#13
Jon McGuffin Major Player Join Date: Sep 2006 Location: Carlsbad, CA Posts: 634	Yeah, I agree with just about everybody else here who thinks, in theory, this sounds like a really fun and exciting idea, but in reality, it would likely never work. It's hard enough to get 2-3 guys all on the same page and working together, let alone 10. I also look at it in terms of the care of the equipment and the liability if something is broken or lost. In a group of 10, you're assured to get some knucklehead who, usually out of negligence not intent, will undoubtedly break or ruin the equipment. Who's responsibility then is it to fix? I could just see the guy that is at fault denying it and then never fixing the equipment. Then the other 9 guys have to dip back into their pockets to fix equipment this guy is going to break again? The only way I could see this maybe working would be for 10 guys to get together and actually create a rental house with the "fringe" benefit of, if the camera equipment is not on an existing project to a paying customer, it can be checked out by the owners and that the liability of the owners would be 100% equal to the customer. This way, you'd have spent $10,000 on something that can actually earn you a return and you now have access, though not necessarily first right, to the equipment. Does that make sense? Jon

June 21st, 2007, 01:12 AM	#15
Adam Bray Major Player Join Date: Sep 2004 Location: Houston/Austin Posts: 394	How do you decide what equipment gets bought with the $100K? What if I like JVC cameras and you like Canon? You want to buy RED cameras and I want 16mm film? You want to buy dollies and steadi-cam equipment and I think theres no need for them? What if Joe borrows the RED and his PA drops and breaks it, meanwhile Mike is out with the XL2 and it gets knocked off the tripod and breaks also. Who's gonna pay for those repairs? ARE YOU??? Your idea would never work.