"All the business models that we grew up with? They went out the window."
The speaker is a veteran of more than three decades in various facets of the entertainment industry, much of that time as an independent vendor for post-production services. The industry vet, who is in his 50s, didn’t want his name used, or even the specific nature of his business identified; we'll call him Larry, and say that he has carved out a niche providing a post-production service that readies film and television productions for overseas distribution and video release,.
For Larry, the crash of 2008 did not have an immediate affect on his business. The company he owned continued to do steady work both for major studios and smaller indie clients.
"We got through a couple of years, and then it hit," he said. "Fewer films were being made, and that ended up meaning less business across-the-board to a lot of different people."
An additional impact for his Southern California-based business, he said, came with the migration of a good chunk of production to right-to-work states like Texas, Michigan and North Carolina.
In the multi-faceted world of post-production, technological changes have also led to a shift in business. A good amount of post work used to be based around film processing and shipping — but as work migrated to digital, large companies whose business came out of film processing aggressively entered the digital arena.
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The two largest, Deluxe Laboratories and Technicolor, have even put aside their century-long competition and entered into a collaboration of convenience, with Technicolor contracting its film processing operation to Deluxe and Deluxe giving its shipping work to Technicolor.
"Post is constantly retooling," said Larry. "And now everybody is going for the cheapest and best packages that can be offered. Labs have to offer more broad-based services to get clients, which has made the biggest post houses very accommodating."
The result has squeezed smaller companies, several of which have gone out of business in recent years.
And in Larry's niche, he has found that the old business style — in which he could pitch his services to new clients, and increase prices at intervals that made sense for business — no longer works.
"I'm already coming from the bottom end on price," he said, "and most guys I know haven't been able to raise their prices in more than eight years. And if someone is referred to them, they'll get the same price as the person who referred them."
Any other business model, he learned, just doesn't work anymore. "I've tried to go in and get price improvements from some companies, but they just say, 'Well, we'll take our business to the market then.'
"In other words, they're saying to forget it. The attitude is, if you want to keep the job, you can't raise prices no matter how long it's been."
The result is a squeeze: less work, at prices that at best stay the same.
"The marketplace for any kind of post vendor is tough," he said. "You have to hang onto the jobs that you have, and then hope you get referred if you want any new jobs.
"Because you're not welcome walking in the front door and asking new companies to take a look at what you can offer."
His staff, he added, is "not quite a skeleton crew, but it's getting down there." (Most of them work on a per-project basis.)
Larry finds some reason for hope in the amount of television production, in which he said he's seen a slight rebound. But at a time when the studios are making fewer movies and squeezing vendors on the ones they do make, he is not optimistic about business ever again looking the way it did before the recession.
"You have to make do with less," Larry said. "It's a tighter ship, man. How people are making money, I don't know."
