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RED, religion or business? (Film School Discussion)

J

john4321

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I did a quick math.

Let's assume, average order is about
30.000 USD
x 2000 orders
(jim mentioned it today on schedule thread)

=60MIO in Sales!

" Only" or "Well Done" ----depending how you look at it!

On a project like this I assume you can spend 60 Mio easily. Let’s think about P&R ,development costs of the chip/codec/other parts and new inventions . Assembling the items, payroll,design,reserves for warranty a.s.o. Easy to spend some 100 Mio’s!!!

I realized red is more a religion and not just a business, but when does red need to face the reality of the market principles?

How long can a billionaire sell camera equipment and loosing serious money on each item?

Where is the break even point? Selling 10.000 Cameras 20.000 or more?

How likely is it for us, facing a dramatic increase in sale price?

I RATHER WOULD LIKE TO SEE A SALES PRICE WHICH GARANTUEES COMPANYS FINANCIAL SUCCESS!

So far we are only reservation holders, no fixed schedule, no fixed price. ( Am I wrong?)

I believe in red, and jim , but cant ignore from a biz pov that jim became as rich he is, because he made money on items he sold with a net win!

Is it time to get any kind of commitment from RED?



BESIDES my unemotional math, i would love to see
RED to start a new development soon! Thinking of:

Kind of Ferrarie Enzo with Jet capabilities and a list price of 50k.
my order would be yours.

Serious,
for me Jim spends tons of cash to make our dream happend. My deep respect!!!

We all should pay this forward to other filmmakers who cant afford a red, and need to rent one.

But i assume most red owners will be not be as generious as red is to us.

Some street talks are about 600 to 800/day rate, for first reds.

Religion or business ? Easy to cross the line.

Who is willing to pay something forward?

Silence of the Red's?

We will see what the red owners make it ..

red a religion or a simple biz!
 
John, some people on this board are business people and most of them are cinematographers.
To explain in simple words, from financial point of view, growing the company is most profitable aspect of the business, making the profit is the second concern.
I know few billionaires that didn’t make any profit in the companies they started, and yet they sold them for few billion dollars in the time when those companies were still loosing a lot of money. Actually making the profit when growing rapidly a company, is considered mismanagement.

I think you could find a buyer for RED at this moment for 300 million dollars, so where is your math?:-)

Also capital gain tax you have to pay after you sell the company is at 15% rate, income tax from cashing the profits is at ~40%
I guess our tax system rewords creativity and creation of employment in this country.


Andrew
 
When everybody in the business has one these, whats going to distinguish anybody? And just wait everybody will have one from your fresh from film school (i can light that with this Bulb!) graduate to the seasoned (tired of chasing formats) veteran. Oh I guess it's the basics:competence, sales, clients, ability, and creativity. Ohh kind of like it is now before Red
 
i suppose we'll have to wait and see. Looks like these things will sell like hotcakes, that alone should generate enough dough for the company to keep from burning out... at least for a while. hopefully the handheld will take the mass prosumer market and ensue reds future as a major player against companies like sony and panasonic
 
amigo, I'm sure that the RED company will make whatever margins they can and want to; who knows what their business model is and it's totally their business anyway. I agree that some/all of us future RED camera owners want to cash in (why not?) but I'm also sure that many many owner operators will also do some stuff for cheap or free because they like the project (as they do now). This camera makes that more possible.
My very first project will be for free: it's a mime/dance short story filmed on location. Using RED will help to make the film much more beautiful, but it's not going to make it more commercial.
Et puis on vera..
 
john4321 said:
Serious,
for me Jim spends tons of cash to make our dream happend. My deep respect!!!
Click to expand...

I don't think Jim Jennard is doing it for anybody but himself. It's a challenge for him (and others working with him), and I think that is the motivation behind the project. If the only intention was to make a profit, I'm sure this would have been abandoned years ago. It's his dream and we're the ones that will benefit from it.

"Not within a thousand years will man ever fly."
-Wilbur Wright circa 1901
 
"But i assume most red owners will be not be as generious as red is to us.
Some street talks are about 600 to 800/day rate, for first reds."

looking at current shipping schedule ... i think you'll find REDs rentals priced from low to very expensive by beginning 2008 ... low could be with nikon still lens .. to a high with Mater primes , primo zooms ...

what does a 30k camera ( ready to shoot = camera, lens,etc) rent for today ?
50k ready to shoot camera ?
80K ready to shoot camera ?
150K ready to shoot camera ?

i plan to go from pro bono to 2k day ( not including me) - all depends on where one IS in the 6 degrees of separation and the project
 
Unlike the Panasonics and Sony of this world Red has a small commited and capable team building the camera. I would be suprised if they weren't making profit on it. Because of Oakley they have the capabilities to do the R&D so I think 100Mil + would be extreme.

You must also weigh in the marketting factor. What Red has done successfully is picked up 2000+ orders before it has even begun to ship it's first camera. By selling more and selling low the company will make the same if not more than someone like Dalsa who might only sell a few hundred units.

I also think that the most interesting announcement comes in the form of their 4k displays and projectors. If Red can prove to the film making community that they are capable of producing this camera, lenses and accessories then there will be a great deal of faith in their abilities. Imagine if all of a sudden the entire cinematic world had an affordable 4k projector they could purchase and install, and all those individuals who'd love a 4k display at affordable prices. This will potentially be worth hundreds of millions.

I wouldn't be suprised if Jim announces he is getting into digital distribution in the near future. If after a couple of years he has aided the capture, post and cinematic display I don't see why he wouldn't go the whole hog and get into the digital delivery of movies to the cinema. There is a potential to make billions here and although potential delivery methods are being ramped up as we speak it's still early days and is certainly a market that is yet to be won. Perhaps even buy into one of those companies and rebranding it. Maybe that's why he sold Oakley lol.
 
km9000 said:
someone take down this thread before jim sees it!

john4321, shhhhh!
Click to expand...

Too late...

John's premise is wrong so all the math leads to a false conclusion.

Jim
 
BTW: RED has been extremly successful in it´s marketing, I frequent all kinds of movie sets in Norway, mostly commercials, but it´s the same people anyway...

The word RED comes up on almost any shoot nowadays, either at lunch break or some other occasion... people are a nice blend of excited, sceptic, and in anticipation - but RED is the topic of the day!
 
Eirik Tyrihjel said:
The word RED comes up on almost any shoot nowadays, either at lunch break or some other occasion... people are a nice blend of excited, sceptic, and in anticipation - but RED is the topic of the day!
Click to expand...

RED is creating a buzz elsewhere too. I was meeting with a client the other day about shooting some assembly line / production process videos. Out of nowhere they asked if I've heard of "that new red camera". So I gave them the scoop...
 
Hi Jim, thanks. I dont claim my conclutions to be correct. Just a simple math.
As sooner red is brake even, as better for all of us.
 
john4321 said:
Hi Jim, thanks. I dont claim my conclutions to be correct. Just a simple math.
As sooner red is brake even, as better for all of us.
Click to expand...

John... thanks for your concern. We'll be fine.

Jim
 
john4321 said:
I did a quick math.
On a project like this I assume you can spend 60 Mio easily. Let’s think about P&R ,development costs of the chip/codec/other parts and new inventions . Assembling the items, payroll,design,reserves for warranty a.s.o. Easy to spend some 100 Mio’s!!!
Click to expand...

60M? No way. I'm guessing 20M to 30M, but it doesn't really matter does it? As long as RED makes enough money to continue development and support the product, all is well. I WISH I had the SMALLEST financial interest in RED. They have a good shot at global brand and technology domination. Arri and Panavision have had their day in the sun. There's a new sheriff in town.

john4321 said:
Some street talks are about 600 to 800/day rate, for first reds.
Click to expand...

I don't know where you are getting that "street talk" - but for the first REDs (I should know) it's WAY, WAY more than $800 a day. $200 for just the 18-50 lens.
 
Cyclemanjohn said:
When everybody in the business has one these, whats going to distinguish anybody?
Click to expand...

TALENT. EXPERTISE.

Everybody has Final Cut Pro. Every kid coming out film school (800,000 people do).

What distinguishes a great editor?

Yeah, there's LOTS of folks on this forum that seem like they are building whole business models on owning a RED - that's a bit RISKY in my opinion.

Talent and Expertise really help most business models.
 
Well, that's true, but I also don't think it's probably fair to say every kid coming out of film school can get a RED package, I mean are you serious about that? If they could, wow, the world would be a lot different!

At my film school, 75% of those kids are going $70,000 in debt for ONE YEAR of education -- $37,140 tuition plus the rest of the loan is for cost of living during that year, and if you take into consideration their lost earning potential during the year we're talking about a ton of money blown at film school. Those kids can't afford a Big Mac when they get out of school, let alone a RED. If they could, they wouldn't be working the lousy jobs they end up working. Like my friend said, "Moving lights and plugging in cables is a job, not a dream." I didn't come here for a job, I came here for a dream. So did they, but they just don't have the means to get there as quickly.

I did have a fellow student who had a RED on order, he was an early reservation holder actually, but he was also 41 years old and a former employee of ILM who worked as a digital matte artist on The Phantom Menace, so he was already in the industry and had done pretty well for himself. He dropped out two weeks before I dropped out, similar reasons. It's kind of funny to say every film school student would be able to afford this expensive of a piece of equipment. Granted it's inexpensive comparatively but it's still not cheap for most people, especially ones strapped with debt. My friend Bryan will have four years of debt from undergrad plus three years of debt from graduate film school to pay off. That's not fun. ;)
 
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