It’s been just over a decade since Avid’s Media Composer changed the face of postproduction, and now that Final Cut Pro is the first would-be competitor to sustain any serious, professional attention the industry is all abuzz speculating as to how soon a low cost, highly-functional desktop NLE will finally be available. What is the ultimate effect on the post industry? Will the accessibility of the technology kill the post house as we know it?
While many speculate about whether Apple is a significant threat to Avid’s market share (I doubt it), the more intriguing question is whether or not ownership of technology will ultimately mean the end of outsourcing as we know it—a seemingly good thing for Avid but not always for the facilities that provide their technology.
In New York, four major facilities went belly-up in the last year, but some of their billable hours began disappearing long before nonlinear was even legitimately competitive as a finishing tool. Ironically it was the technology that Avid was providing that lead to their demise. Every time a producer purchases a "lower resolution master" (anything other than uncompressed, including DV25, etc.), it contributes to the trend that will eventually lead to the demise of traditional offline/ online. When these systems passed the compression barrier enough to be acceptable for broadcast it opened the floodgates of fuzzy logic and the concept of ownership of the technology at the lower end.
It seemed to some that as long as they were making a dollar above their lease payments that they were somehow making a profit. Also, many had the notion that they would be left with a sizable "asset" at the end of the lease, as if it were a piece of real estate. However, the market soon became saturated with systems and the basic laws of supply and demand took over reason and good business practices. Pure competition buried rates to an all time low. Very few companies took into account the true cost of ownership√real estate, insurance, maintenance, upgrades, personnel and the high cost of peripheral equipment such as scopes, decks, etc.—leaving many caught in a vicious cycle. Now we find ourselves chasing the lowest common denominator. Relative to scale, "profit" remains the same while budgets are lower and the cost of buying into the box less and less. With decisions seemingly made on quantitative values rather than qualitative, I can’t help but wonder: Is the accessibility of the technology a good thing?
My business partner/CFO puts it best when he describes technology today as "fruit rotting on the vine; our job is to get somebody to use it before it rots."
The post industry needs to recognize that there is no equity in technology. If you have a three- or four-year lease on a system, its value is zero before you’re halfway done paying for it. The depreciation is much faster than the government allows. Not only that, I’ll bet you a lot of systems out there, especially large storage area networks, are improperly insured.
Because PostWorks is also in the rental business, we see the issue from all sides. A few years ago many companies opted to purchase their own systems rather then rent, but now many of them can’t make their lease payments and are looking to broker their systems. Unfortunately for them the market’s too saturated with Avids (both legacy and new systems) and Final Cut Pro.
In another decade, will everyone and his cousin own a desktop NLE that outputs uncompressed, full-frame video? Probably. And in the course of that decade, we will probably see the vicious cycle continue where perceptions of technology run at vectors from the actual evolution of it.
When Avid began to take hold, a lot of people thought the post industry was dead, but it turned out that not everyone who could use a mouse was a good editor, and buying into the box wasn’t necessarily the "turn-key" solution to all our creative challenges.
It took about 12 years and several millions of dollars of R&D for Avid to get to the Symphony, and if HD becomes the next flavor du jour, these machines all become offline systems for a short while. And in the meantime, who can say what technological diversions lie ahead?
There are enough indicators to suggest that a post industry of some form is far from dead. In the end, it’s not a matter of what you work with but whom you work with. The service model never really goes away. If anything, digital technology might be the best argument for a more diverse and flexible kind of outsourcing than the days of analog √ with software-only based systems for offline and higher end systems for finishing.
