Power of RED

[XiaoSu Han]

Just realized something last night.

RED sold over 8000 cameras already. Plus accessories it should be around 20K for one. That's 160 million USD.

Lets say 2000 people already paid the deposit for the Epic, at 5000 a person that would be 10 million usd for RED. And that already has been at RED for almost half a year. Which other company can get a interest free advance of 10 million dollars off it's customers in a month?

Impressive numbers if you think about it.... not that RED would have a problem with cash flow anyways...

 

[Gunleik Groven]

You know what?
Cool...
And all the better for all of us.

I have so far gotten my interests back many times (I could break that into specifics, but it is not about ROI...)

There were a couple of very promising camera-ideas floating around at the time RED popped up. None of them managed to really materialize, and I think liquidity might have been a big factor in that equation. When Epic is more than one year delayed, those 10m$ does not have much validity. That Jim has the liquid resources to live it through for one more year if that's what's needed to get it through - even without eating into our deposits which RED has offered to fully refund even if we decide not to take delivery - is the important and extraordinair element here.

If RED makes a profit, all the better, that hightens the possibility of us getting new great cameras.

Remember the first 100 R1's? RED took all of them back, because they weren't up to par. Have you ever heard about anything like that?
Things like that create a certain customer loyality....

And when the Epic got delayed, the MX upgrade program popped up - more or less out of nowhere.

Way back then, when people made fun of me for depositing 1k$ into a non-existing hoax of an unprobable cam made by a sunglass billionaire, I could confidently respond that I hadn't ever had more fun for 1000$ than what I had with the RED dollars, independently of REDs ability to actually deliver a cam.

But my reason for depositing, was that Graeme was in on it, and I really couldn't imagine that a team with him on, would not eventually deliver magic. This was long before I realized Jim was a billionaire...

RED has given me back my interest on anything I have given to them + VAT + trust + a lot, more than any savings account in a bank has given me, and guess what - that would still hold true if they went bankrupt and the 5k$ I have deposited for an Epic-x was lost...

Cheers!

G

 

[Curran Giddens]

And some of us have already "paid in full" i.e deposited enough money to pay for their complete Epic-X packages. I've had over $40k in Red's bank for the past 6+ months.

 

[Curran Giddens]

But my reason for depositing, was that Graeme was in on it, and I really couldn't imagine that a team with him on, would not eventually NOT deliver magic.

Same here.

 

[D Fuller]

There have been a few times in my career when I knew beyond doubt that a technology was the way forward. A computer editor in the 1970's that used time code was the first. The Avid demo I saw in a Massachusetts hotel room in 1989 was another. Red is the latest.

I didn't know anything about the company at the time, but the idea behind the camera was so clearly right that I knew it was the way I wanted to go. Investing my own money in that idea makes a lot more sense than most anything else I could do with it. The payback has been extraordinary. Not just in financial terms, but in the quality of work I am able to do with the very tight budgets of a small market. That, to me, is the Power of Red.

 

[Alex Kornreich]

And some of us have already "paid in full" i.e deposited enough money to pay for their complete Epic-X packages. I've had over $40k in Red's bank for the past 6+ months.

Whoa why'd you do that? You just gave them an interest free loan for over half a year while you earn nothing. If a lot of people are doing this they could be making a good amount in extra income or in interest expense not paid.

 

[albert rudnicki]

Whoa why'd you do that? You just gave them an interest free loan for over half a year while you earn nothing. If a lot of people are doing this they could be making a good amount in extra income or in interest expense not paid.

first come first eat.

 

[AnthonyFlores]

Just realized something last night.

RED sold over 8000 cameras already. Plus accessories it should be around 20K for one. That's 160 million USD.

Lets say 2000 people already paid the deposit for the Epic, at 5000 a person that would be 10 million usd for RED. And that already has been at RED for almost half a year. Which other company can get a interest free advance of 10 million dollars off it's customers in a month?

Impressive numbers if you think about it.... not that RED would have a problem with cash flow anyways...

Actually, I think you're a little off with your math. I believe the average Red
user actually spends more like $30,000-40,000 between the brain and all
the accessories.

So it's probably more like $250-350 million in total sales.

You must remember, however, that is over a 3 year period and funding a
camera company like this -- with all the R&D, employees, location costs,
not to mention the hard costs of the cameras themselves ... is a LOT.

I'm willing to bet Jim has had to use a lot of his own money, and even to
this day the profits they've made may not have exceeded the cash he's
poured into the business.

Probably why he's more eager to get the Epic and Scarlet out to market than
anyone else. In addition to his passion and vision, it will mark a turn for
when all these blood, sweat and tears actually amount to a real profit.

I assure you, the $10 million for the Epic reservations is probably more to
protect loyal customers and make sure those who commit and hold a very
valuable place in line are truly serious.

Because in the grand scheme of Red costs or revenues, it's not all that
much money ...

Just my two cents :sifone:

Anthony

 

[Scott Miller]

@Gunleik Groven, Epic post ! (Sorry for the pun, but only word that seems right!)

And as for the observation about "Earning money/interest".... @ current rates, and given a year on deposit of $35K, he would have lost $525 or so in interest. Not a major loss in view o having piece of mind that the DAY it can ship, it will ship

I am awaiting funding, life insurance , and I will take the insurance checks, convert the appropriate amount into a CC and FedEx standard overnight to Red that same day I get the checks! I may have a higher SN, but I want my Stage II!

But, we are all allowed our opinions. YMMV

Scott

 

[Elsie N]

Probably the most expensive component of a company like RED is labor. Think of all the people they have working just in support, then the various people in the different sections ( software, engineering, R&D, etc.) and you can imagine what their payroll may be.

And, in regard to Epic, think how costly it was to produce a new orders of magnitude greater-than-any-competition ASIC from scratch.

Yes, RED has valuable assets, like the aforementioned ASIC, REDCODE, RED 4k technology, secret stuff.... but I don't think (public) sales have near covered what they've spent amassing those assets.

While they started with ample seed money, they must be leveraged, (billionaires cannot raise a billion in cash normally) because there's no way they could do what they've done in a decade on sales alone... IMO.