The race to the bottom is on

[Brad Webb]

If you're starting at the bottom, you've already won the race.

That being said, I don't use my gear to make money. I use me to make money. I bought it knowing I might never make my money back on it. I didn't overspend. Any money it does make is a bonus. I wish I could get $800/ day out of the Scarlet kit, but I can't. It's a fact. My prices aren't near as low as some of the stuff that's been posted, but it's lower than me and my business partners initially thought it would be. You adjust to the market or die. If you want to charge more then you have to offer more.

What the people charging 7D prices don't realize is that it's hard to raise your prices. People that rent from you now aren't going to pay double in a few months. Look at Netflix, they raised their prices a tiny bit and shit hit the fan for them. They lost tons of subscribers, but they had enough to weather that storm. How many clients can you build on that low end? To make your money back on your kit you've have to rent it out 3, 4, 5 times as often.

The bottom feeders are killing themselves while trying to steal business. The strong will survive. Those that plan will survive.

 

[Wil Wong]

Prices will always come down...

Prices will always come down...

I remember when Avid systems were over $20,000. I bought my first 1x DVD recorder for work at $5000. Apple sold blank DVDs for $15 each. Prices will continue to fall as long as there is competition. Without competition, we'd be still using film to make movies that are 4:3 ratio. None of this widescreen stuff.

What makes a Disc Jockey that charges $700 for a wedding different from another Disc Jockey charging less? It comes down to their portfolio of experience. What equipment and music they have. How good of a salesman they are, and in the end how knowledgeable is the client with current market rates.

The same can be said about any owners renting Scarlets, Epics, and ONEs for a low price.

Renting out a Red for a cheaper price then the current going rate is not bad to them (maybe their competition). Obviously there will be wear and tear on the camera and millage put on it. Is it worth it to get more sales...maybe.

Frankly, price is based on the individual owner's comfort level. Low price means more rentals to get your return on investments.

I think that there is room for all of us. It's why there are quality food emporiums that also owns discount grocery stores. The clients are different and want or don't want, variety for price.

Rental is a competition and although it is understandable that we all want to make our money back, customers ultimately decide on what's right price and solution for them.

Ultimately, a low price won't hurt (cause chances are the client already know how much they plan to spend. CAMERA wise, if you are worth more, charge more. If you have lots of equipment, charge for it. It really is to each their own. The Red is just part of the puzzle on a shoot, as Service provider or Camera rentals play a big part...Your skills, experience, technology and ability to tell a story (from anything including a commercial to a wedding/music video, LIVE event like a baseball game, or movie).

Storytelling is the key. A bad story won't make up for having the came later...

 

[Liam Hall]

It's not equipment rates that I see as the main problem, it's day rates for crew. The independent sector in London has seen rates and budgets diminishing over the last ten years. I compete on a daily basis against people who charge less than half what I do (and I'm not expensive). There're lots of desperate people out there, and who can blame them for trying to undercut the market when they need a job.

Added to that, production companies expect more for less. They want multi-skilling, they want long hours, they want gear for free, they want travel days for free, they don't pay per-diems, they argue over expenses and overtime etc etc. Still, it beats working in a call centre....

 

[Jay A. Kelley]

People that look for the lowest price usually find themselves paying the most money. I take good care of a decent paying client.. I make sure they have everything they need, and I go above and beyond. For the cheapo's I rent them EXACTLY what they pay for, and not a screw more. They have to rent add on after add on because they usually have no idea what they are doing, and they burn my time.

Most of the time, I just tell them to go away, and refer them to people I do not like.

One constant in the universe: The cheaper the client, the higher maintenance the client.

Go figure...

 

[Rob Ruffo]

This reminds me of stock photography. Back when digital cameras were either expensive or awful (actually, both) I wanted to get into selling stock photos via The Image Bank. Well that plan didn't work for several reasons. But back then you could make real money from stock (partly because you had to buy lots of film).

Now, stock is almost free. And in fact in some cases it is free if the images are CC Attribution. Which is fantastic! That way, web sites and magazines who may not turn over huge profits can have most of what they want for no cost while they pay for the rest. And I look forward to contributing to the pool of CCA images in my spare time.

I'm not sure that this is a bad thing. Keeping quality up is what matters. Keeping prices down is a bonus.

How is keeping the prices down of your creative work "a bonus"? How is it fantastic that websites and others (who make money selling adspace) pay you $0, whereas magazines used to pay grocery bills?

 

[Rob Ruffo]

People that look for the lowest price usually find themselves paying the most money. I take good care of a decent paying client.. I make sure they have everything they need, and I go above and beyond. For the cheapo's I rent them EXACTLY what they pay for, and not a screw more. They have to rent add on after add on because they usually have no idea what they are doing, and they burn my time.

Most of the time, I just tell them to go away, and refer them to people I do not like.

One constant in the universe: The cheaper the client, the higher maintenance the client.

Go figure...

You speak the truth!

 

[Rob Ruffo]

I remember when Avid systems were over $20,000. I bought my first 1x DVD recorder for work at $5000. Apple sold blank DVDs for $15 each. Prices will continue to fall as long as there is competition. Without competition, we'd be still using film to make movies that are 4:3 ratio. None of this widescreen stuff.

What makes a Disc Jockey that charges $700 for a wedding different from another Disc Jockey charging less? It comes down to their portfolio of experience. What equipment and music they have. How good of a salesman they are, and in the end how knowledgeable is the client with current market rates.

The same can be said about any owners renting Scarlets, Epics, and ONEs for a low price.

Renting out a Red for a cheaper price then the current going rate is not bad to them (maybe their competition). Obviously there will be wear and tear on the camera and millage put on it. Is it worth it to get more sales...maybe.

Frankly, price is based on the individual owner's comfort level. Low price means more rentals to get your return on investments.

I think that there is room for all of us. It's why there are quality food emporiums that also owns discount grocery stores. The clients are different and want or don't want, variety for price.

Rental is a competition and although it is understandable that we all want to make our money back, customers ultimately decide on what's right price and solution for them.

Ultimately, a low price won't hurt (cause chances are the client already know how much they plan to spend. CAMERA wise, if you are worth more, charge more. If you have lots of equipment, charge for it. It really is to each their own. The Red is just part of the puzzle on a shoot, as Service provider or Camera rentals play a big part...Your skills, experience, technology and ability to tell a story (from anything including a commercial to a wedding/music video, LIVE event like a baseball game, or movie).

Storytelling is the key. A bad story won't make up for having the came later...

NOOO!!!! Another storytelling is key post!!!!!!! What the ---- does storytelling have to do with renting gear? Seriously.

And no, customers do not decide what something is worth, it is push-pull between what they **try** to pay and what we are all willing to give them. If you asked a producer what they would prefer to pay, they would all, quite understandably, answer $0.

 

[Les C.]

... Until Red comes up with a $800 - $1500 Rocket-like device so everyone can have one (maybe using those ASICs they developed) this will probably always be a problem with Scarlet and Epic.

RED could easily use GPU's to debayer.

ARRI is now doing GPU acceleration of RAW decoding (my above statement assumes that anything ARRI can do, RED can do better).

http://www.reduser.net/forum/showthread.php?81292-GPU-acceleration-of-RAW-decoding

 

[andrewhake]

If you are concerned with a rental price being this low, it probably means you purchased a camera with a main intention of merely profiting off of it and not actually making anything interesting. It doesn't take a genius to purchase and rent a couple of cameras to people... I could care less if "Professional" camera rental companies exist. Any company or person that relies on renting out constantly changing technology is guaranteed to fail because it is beyond their control. If you look at a RED camera and all you see is dollar signs, you have already hit the bottom.

If you buy a camera and what you want from it is profit, your result is likely to just be failure in the end. A camera shoots images, it doesn't print money, use it for it's intended purpose, make something interesting damn it. I bet Jim and Jarred think to themselves all the time, "I am so excited to bring this new technology into the world so other people can buy it, sell it, and make money!"

 

[Jaakko Rinne]

RED could easily use GPU's to debayer.

ARRI is now doing GPU acceleration of RAW decoding (my above statement assumes that anything ARRI can do, RED can do better).

http://www.reduser.net/forum/showthread.php?81292-GPU-acceleration-of-RAW-decoding

Going OT, but my understanding was that the debayer isn't what needs the massive processing power, but rather the decompression of REDCODE compression. GPUs don't handle the decompression well.

 

[Von Thomas]

Here is my opinion. RED came along at a price that many could buy on their credit cards, good idea right? Well they maxed out those cards, and when time came to pay the piper, they panicked, they had to pay that monthly note, so they lowered their rental price. Well the guy next door that did exactly the same, had to lower his price, or face the same problem, money going out, nothing coming in. You multiply that times a thousand, and you have what is now very common. A race to the bottom, all the while their visions of making a decent rate of their investment, went out of the window.

The only way to make money in the business of renting is, be first with the product, and you have a 90 day window to try and make your money back, before everyone in your neighborhood has the same gear to rent. Or have oodles of money, open a serious camera house, have complete staff with technicians, sales people, and plant bombs in all other camera houses so you are the only one left standing.

Other than that, the rental model, is not a good one, not anymore. Buy the cameras for your own use, if you can rent them from time to time, it's good, but be prepared to rent low, very low.

If by chance you live in a smaller city that Los Angeles of New York, you make have better luck, but not by much. Those that purchase multiple cameras when Epic came out, are either watching their investment sit on the shelf, of selling off the excess, to recoup their money.

Times have changed, change with them.

Von

 

[Andrae Palmer]

Everyone is coming to me for a discount... EVERYONE... what you do is stick to certain price points and throw in a freebie. Like I don't let the EPIC cameras go out for less than $1450 for a basic package... $2000 for a premium package... those are the going rates in South Florida. Now the client wants a discount but you want a certain price point for each job... so what I do now is throw in something like a Kino Flo kit for free. It's either doing that or dropping your price... if you remain inflexible they will keep searching for someone else that will bend... chances are they'll find someone. Unfortunately this means for you... getting more equipment if your in the rental business. I've noticed the bigger your company image is (more workers usually)... the more the clients don't ask for discounts. Unfortunately for me... I'm a one man business.

The main problem I see is that some newbies are too heavily invested in the camera system. They have all their eggs in one basket so to speak. That is very risky in this market with so many other camera systems available. Remember that it's LIGHTS, Camera, Action. Not the other way around. I see so many large studios down here with little to no lights and a Canon 7D. 1000's of square foot being lighted with at the most some china balls and 300 watt lights. Everyone is on the camera hype... that's good for you... buy something else that they will need after purchasing their camera. Grip, Lights, Motion Control... etc. I'm moving on from the camera... to something that will be universally relative to any production.

 

[Karim D. Ghantous]

How is keeping the prices down of your creative work "a bonus"? How is it fantastic that websites and others (who make money selling adspace) pay you $0, whereas magazines used to pay grocery bills?

I answered that already. The cheapskates - as well as low-budget and non-profit operations - will also use the CCA images but who cares?. CCA is good, public domain is dumb, BTW.

Anyway, the clients who can afford to commission original work will usually do so. For example, TDK doesn't want to use the same stock image for their ads as Econo-VHS does. Both TDK and Econo-VHS are welcome to use my CCA stuff but more likely than not, TDK will hire a photographer to do do fresh, exclusive images. And so on. Most of a photographer's income is made with commissions like conferences, weddings etc. Most are too busy earning money to create a CCA portfolio. Me, I can't wait to put one out there.

Everyone is on the camera hype... that's good for you... buy something else that they will need after purchasing their camera. Grip, Lights, Motion Control... etc. I'm moving on from the camera... to something that will be universally relative to any production.

Yeah, the cameras and lenses are the glamour items. Lighting not so much. Probably because you can't be a show-off while carrying lights. And lighting actually takes effort, whereas showing off cameras is easy. Most folks want to know what the latest camera can do, but very rarely do you read about people getting excited about figuring out a lighting solution. I must admit I'm more excited by lenses than lights, but I know I have a lot of learning to do where lighting is concerned.

 

[Lee Saxon]

Lensrentals.com prices theirs around there.

That must be enough to pay for the kit and make a profit in just two years, because they don't keep things longer than that.

Therefore, I call into question claims that that price is too low.

I think the comparison of the OP to Arri was apt, sorry to say. Democratization is a good thing.

 

[Les C.]

Going OT, but my understanding was that the debayer isn't what needs the massive processing power, but rather the decompression of REDCODE compression. GPUs don't handle the decompression well.

Well - even if they don't do it 'well', if you throw a few thousand CUDA cores at a job they do 'poorly', you've still got something interesting.

R3D's wavelet encoding is supposedly similar to CineForm RAW and JPEG2000 - and I think that GPU's can be used to speed up decoding of those formats.

A GPU is a computer, more suited to some tasks than others, but you can build almost any computer language from some very simple instructions (you just need a few).

I'm willing to be that if RED put their mind to it, they could produce very workable GPU acceleration, reduce the cost of entry for Scarlet and Epic users - and surpass the GPU acceleration that ARRI offers, at the very least.

Maybe they still over a high-end Rocket card for the power users, but ... reducing the perceived cost of entry would benefit them by getting more users into Scarlets (at the very least), which is a way of priming the pipeline with lots of lifetime RED customers - which benefits all of us.

 

[Mike P.]

Using the stills market as an example probably isn't a good idea (definitely not a logical one). From a manufacturer's standpoint, the stills industry got huge when digital made the costs of film obsolete and everyone could afford to own professional quality (more or less) gear. The same thing is happening with digital cinema now and you're saying it shouldn't because it's bad for your business. If your service (support, packages, etc.) is worth the money you are asking for then you should be good. However, if you're just expecting a "RED Camera" to be worth thousands of rental dollars, well, that's just not true. The fixed cost of ownership is ~$50k (less than half that for Scarlet), not the $150-400k of yesteryear's (digital) cinema cameras. In other words, maybe you should be happy that your rental costs only have to be lowered a 1/2 of what they used to be, instead of a 1/6th.

 

[Rob Ruffo]

Everyone is coming to me for a discount... EVERYONE... what you do is stick to certain price points and throw in a freebie. Like I don't let the EPIC cameras go out for less than $1450 for a basic package... $2000 for a premium package... those are the going rates in South Florida. Now the client wants a discount but you want a certain price point for each job... so what I do now is throw in something like a Kino Flo kit for free. It's either doing that or dropping your price... if you remain inflexible they will keep searching for someone else that will bend... chances are they'll find someone. Unfortunately this means for you... getting more equipment if your in the rental business. I've noticed the bigger your company image is (more workers usually)... the more the clients don't ask for discounts. Unfortunately for me... I'm a one man business.

The main problem I see is that some newbies are too heavily invested in the camera system. They have all their eggs in one basket so to speak. That is very risky in this market with so many other camera systems available. Remember that it's LIGHTS, Camera, Action. Not the other way around. I see so many large studios down here with little to no lights and a Canon 7D. 1000's of square foot being lighted with at the most some china balls and 300 watt lights. Everyone is on the camera hype... that's good for you... buy something else that they will need after purchasing their camera. Grip, Lights, Motion Control... etc. I'm moving on from the camera... to something that will be universally relative to any production.

Interesting - what is in those basic and premium packages?

 

[Rob Ruffo]

Well - even if they don't do it 'well', if you throw a few thousand CUDA cores at a job they do 'poorly', you've still got something interesting.

R3D's wavelet encoding is supposedly similar to CineForm RAW and JPEG2000 - and I think that GPU's can be used to speed up decoding of those formats.

A GPU is a computer, more suited to some tasks than others, but you can build almost any computer language from some very simple instructions (you just need a few).

I'm willing to be that if RED put their mind to it, they could produce very workable GPU acceleration, reduce the cost of entry for Scarlet and Epic users - and surpass the GPU acceleration that ARRI offers, at the very least.

Maybe they still over a high-end Rocket card for the power users, but ... reducing the perceived cost of entry would benefit them by getting more users into Scarlets (at the very least), which is a way of priming the pipeline with lots of lifetime RED customers - which benefits all of us.

I wonder how the cost-benefit analysis would work out? Do they really sell that many Rockets anymore?

 

[Les C.]

I wonder how the cost-benefit analysis would work out? Do they really sell that many Rockets anymore?

The high end Ridley Scott market will always buy multiple Rockets.

But, there's a finite need at the very high end - as there are only so many at the Scott/Cameron/Jackson level.

My guess is that after the market saturates a bit, and everyone who wants an Epic as one or two or 50, the real money is going to be made on the Scarlet in volume.

Whatever helps increase Scarlet sales, gets the hesitant new user to make that first purchase decision, is going to help RED.

So, even though we all know that the camera is a gateway drug to lots and lots of other accessories, if RED can talk about how their new GPU accelerated workflow will work for anyone with a new nVidia card ... this will result in more sales - as one of th first things I heard about RED is that you need to have a Rocket - or several Rockets (true or not, that's the perception).

They may actually buy a Rocket later, but ... the important thing is to get them to buy, to buy into the RED concept, to begin with.

There's a positive price/demand elasticity for the Scarlet. If the initial cost perception is lower, sales go up.

Anyway, IMHO - that's how it might work?

 

[Jon Nash]

If you are concerned with a rental price being this low, it probably means you purchased a camera with a main intention of merely profiting off of it

Assumptions are the mother of all cock ups and you couldn't be further from the truth.