* * WHY does Red Equipment NOT hold its VALUE ??

[George D.]

We currently own two Red-Ones, a Scarlet-X, two Nikon DSLRs, and an assortment of lenses. And I've been shooting for over 40 years, so I am not new to this game.

I am just curious as to if anyone has some insight as to why Red Equipment does NOT hold its value.

In the past I have owned and shot Arri, Bolex, Bieulieu, Mitchell, Nikon, Pentax, Sony, and Photosonic Cameras, and lenses like Angenieux, Cook, Panavision, Nikon, Pentax, Leica, etc, etc, etc. And, I have NEVER, EVER seen equipment drop in value as fast as Red Equipment. It's unbelievable to me.

If anyone has a clue as why this is so, I'd like to know.

Thanks for your time.

Be good.

George.

PS - The reason I ask this, is because it continues to depress me that we paid over $25,000.oo of VERY hard earned cash for a Red-One Camera Body that today I could buy for $4,000.oo. What an incredible f***ing waste of our money.

Don't get me wrong. We absolutely LOVE the cameras and do not regret getting them. What we DO regret is the lose of money. It's as bad, or worse, than the money we lost off our Mutual Funds several years ago when everything crashed.

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[Brian Merlen]

The Red One held its value quite well the first 5 years it was out. I think once Red liquidated them that hurt the resale value. Also the Epic and Scarlet price cuts hurt the resale values of those as well. But I think prosumer models lose value even worse. I have a Sony Nex VG10 that BH won't pay me 1 dollar for according to their trade in thing. Mind you its a 2,000 dollar camera thats only two and a half years old with a four year warranty and its worthless. I'd be lucky to get 30 percent of what I paid on ebay! Minus the fees and shopping of course..

My Mac is also worthless, three and a half years old...


So I'd say my Scarlet is the best value holding piece of gear I have actually

 

[David Collard]

This is true for pretty much all electronic and pro cameras across the board. The game has changed.
There are some exceptions like glass. Particularly cine-glass.

Best way for you to look at your Red investment is to try and extract as much value out of using it.

 

[George D.]

The Red One held its value quite well the first 5 years it was out. I think once Red liquidated them that hurt the resale value. Also the Epic and Scarlet price cuts hurt the resale values of those as well. But I think prosumer models lose value even worse. I have a Sony Nex VG10 that BH won't pay me 1 dollar for according to their trade in thing. Mind you its a 2,000 dollar camera thats only two and a half years old with a four year warranty and its worthless. I'd be lucky to get 30 percent of what I paid on ebay! Minus the fees and shopping of course..

My Mac is also worthless, three and a half years old...


So I'd say my Scarlet is the best value holding piece of gear I have actually

Not really! The Scarlet and Epic are dropping like rocks as well.

I'll bet you that in 2-3 more years, you can buy an Epic for $5,000.oo. Wait and see.

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[Brian Merlen]

well we can always update them, and then they get new warranties, higher frame rates, better range and colors...plus they get to start the depreciation cycle all over again... But I think the whole point is your return on investment needs to generate income faster then your camera depreciates. But one can view it different ways. I paid almost no taxes buying my Red. Now I am upgrading and placing it in a major name rental house. So as long as it rents faster then it depreciates plus I account for the tax write offs, then its a good investment....

I actually have done bad myself so far. Bought in right before the price drop or BT Scarlets were available... Had it break on me on me right before my only rental I ever got on my own. And basically used it to shoot a reel for myself pro bono. That's why I have decided to double down, upgrade and sublease. Hoping it works out better. But for the taxes and reel alone the price I paid is negligible. Its a tool for me to express myself, and for me to improve my craft on and I have enjoyed mucking around with it since Mid Sept 2012...

But now I am hoping for the bookings to work out, and I am booked on a gig with a Red so it makes since for me to sublease mine while I am busy until 2014

 

[Paul Watt]

I guess it would be a waste of money if you bought a RED One and didn't use it to make money. But hopefully you did, and you got a discount on an Epic that made you more money, that you can upgrade to Dragon, and make more money. Also, if you had bought an Arri 435 10 years ago for $125 000, you'd be disappointed to see it's now worth around 10 grand. And a 5 year old Sony F35 new for $200 000 is now going for $12 000. All how ya look at it I guess.

 

[mikeburton]

Hi George,

To answer your question as honestly as possible i think its two fold.

1. RED depreciates there own items to "pass savings" to their customer base. This has been debated many times as being good and bad depending what side of the fence you're on.

2. When a company like RED starts out at a lower cost of ownership than the vast majority of other manufacturer's ie Sony, Arri, Vision Research etc there is a "brand perception" in the marketplace as being "Cheap". When amateurs flood the professional market with the same tools and undercut the pricing on rentals and sales of that tool it becomes perceived as less valuable and in reality is less valuable based on supply and demand, ie market flooded with supply as apposed to the amount of owner operator F65's or Alexa's for example.

When i bought my RED One I paid $27k for my package. Sold it 4 years later for $17.5k. Not bad for 4 years later IMO.

That said, given enough time all tools that were expensive at one point will become dirt cheap in the technology world these days. My Arri 435es package was over $150K when it was new and for about 5 - 7 or so years after it was released, and now you can get that same used package for $10K or less. Just sayin. Usually, if you want resale value in a product you stick with products/brands that have a history of good resale value, sort of like buying a home in a well established neighborhood that even during difficult times doesn't lose their property value that much compared to the newer housing developments. That said, you pay a premium to own those cameras to begin with. The good and bad with RED is, its a great entry cost and a great bang for buck, but the brand has cheapened itself and once that's established there's usually no going back.

 

[George D.]

Hi George,

To answer your question as honestly as possible i think its two fold.

1. RED depreciates there own items to "pass savings" to their customer base. This has been debated many times as being good and bad depending what side of the fence you're on.

2. When a company like RED starts out at a lower cost of ownership than the vast majority of other manufacturer's ie Sony, Arri, Vision Research etc there is a "brand perception" in the marketplace as being "Cheap". When amateurs flood the professional market with the same tools and undercut the pricing on rentals and sales of that tool it becomes perceived as less valuable and in reality is less valuable based on supply and demand, ie market flooded with supply as apposed to the amount of owner operator F65's or Alexa's for example.

When i bought my RED One I paid $27k for my package. Sold it 4 years later for $17.5k. Not bad for 4 years later IMO.

That said, given enough time all tools that were expensive at one point will become dirt cheap in the technology world these days. My Arri 435es package was over $150K when it was new and for about 5 - 7 or so years after it was released, and now you can get that same used package for $10K or less. Just sayin. Usually, if you want resale value in a product you stick with products/brands that have a history of good resale value, sort of like buying a home in a well established neighborhood that even during difficult times doesn't lose their property value that much compared to the newer housing developments. That said, you pay a premium to own those cameras to begin with. The good and bad with RED is, its a great entry cost and a great bang for buck, but the brand has cheapened itself and once that's established there's usually no going back.

Thanks Mike,

I think you really have a handle on it.

I hope you had a good fourth, and a great weekend ahead.

Take care,

George

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[Scott Crawley]

This is true for pretty much all electronic and pro cameras across the board. The game has changed.
There are some exceptions like glass. Particularly cine-glass.

Best way for you to look at your Red investment is to try and extract as much value out of using it.

The very top end existing cine glass will hold and even increase in value, but I expect glass on the whole to turn into a losing game as well going forward. This shit isn't real estate. ;-)

 

[Blair S. Paulsen]

Mike's analysis is excellent. I would add, the portion of the marketplace RED cameras service couldn't possibly grow as fast as the number of cameras/vendors did.

Cheers - #19

 

[BrendanLeahy]

I'm now stuck sitting on my Scarlet upgrade path trying to decide which is going to be the best route based upon the above.

I did get the BT Scarlet, so upgrading etiher way will very good. However, if I were to upgrade to the Epic and eventually Epic Dragon, that's $19k + the original $7k BT Scarlet - $26k total. How long will an Epic Dragon hold its value before the price drop?

Even Epic-Xs are flooding the marketplace now with this upgrade path - their #s are almost at 6000 right now compared to the 3600+ Scarlets floating around (if the serial # system is in fact accurate for the number of cameras out there and not just random). That hurts both rentals and day rate overheads.

Conversely, the Scarlet Dragon sounds great, but we have neither seen what its image actually looks like, nor the insight of RED's plans (if they release Scarlet Dragon new or do yet another price drop on the body...).

Finally, renting a camera out seems like a good way to recover funds, but in addition to the above, I also worry someone will mess up my only camera, and it will need to sit at RED for a couple weeks to be repaired. I could buy a second body for backup shooting, but then would eventually need to upgrade that so both cameras are "Dragonized" and current (Scarlets are over-abundant in Chicago, so I can only hope to get Epic or Dragon rentals). Again, though - more money and a concern on the returns.

It's a rough place to be in for me in particular because I'm in my 3rd year of owning my own business and freelancing; everyone I've worked with has been content/doesn't normally have the budger/need for higher-end equipment, so I'm spending a lot of time trying to get new clients that want/need the RED.

 

[M Most]

We currently own two Red-Ones, a Scarlet-X, two Nikon DSLRs, and an assortment of lenses. And I've been shooting for over 40 years, so I am not new to this game.

I am just curious as to if anyone has some insight as to why Red Equipment does NOT hold its value.

I think there are multiple aspects to this. But one of them is that comparing film and still cameras to something like Red's products is like comparing apples and chicken. The two have little in common besides the use of lenses and the ability to create visual imagery. Film and still cameras are marvels of mechnanical engineering and precision manufacturing, which required slower manufacturing and a high degree of expertise. Red products are much more akin to a computer with a lens, which brings into play the forces of Moore's law and other things that contribute to the commmoditizing of the product. Finely made machinery is like fine jewlery, it will always have some value just based on the human effort involved in its creation. Electronic devices have a much shorter shelf life and much lower perceived level of excellence, regardless of the truth of that perception. That's just the way it is.

PS - The reason I ask this, is because it continues to depress me that we paid over $25,000.oo of VERY hard earned cash for a Red-One Camera Body that today I could buy for $4,000.oo. What an incredible f***ing waste of our money.

I would counter that it was only a waste of money if in the time you've had it, you haven't used it and/or haven't made any money by doing so. Costs have continued to drop because other players have entered the game, some of the electronics have become more commoditized and thus cheaper, and because over time more efficient ways of manufacturing these things have been developed. That's the inescapable result of what JIm started back in 2007.
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[Karl Gustav H.]

It's not just Red product in this boat. Look at the depreciation curve on the Sony F35.

 

[Dr. Sassi]

To see the "value" of equipment burnt down is never nice. Certainly I agree, but it is not something that is limited to a single brand.
My first Sony, I bought it in 1986 if I recall it correctly, was less in value after three years than its own case. Since then I had many video cameras from Sony or Panasonic, never sold them, not worth it.

I did not bought my Scarlett while the introduction price were available. But I just traded it in (first time I have given a camera away!), and got roughly $1,700 less than I paid for. So, my perspective on that is, I had the Scarlet-brain nearly 14 month for $1,700. This means, day in day out, I had this camera-brain for ~$4 a day! (I ignore here tax deduction or interest on the money if I had put it in a savings account, etc., for simplicity)

This is far beyond anything I would even considering a reason to start to complain. The opposite is the case, I'm grateful, for every single free update, for every free support question I got answered, and for a very friendly sales team. I had the pleasure to learn the camera in depth during that time, and I have to say my thanks as well as to a great community, which supported my learning here to a great deal.

This is a very individual point of view, and I know many Epic owners might have a much higher per day "fee".

If you break it down in cost per days, which is one option to view it, it might looks already different for a RED ONE. But even you rent it from a rental house, the time to get there, to get your order and to bring it back -- time I'm not willing to invest. Time I had not to invest based on my $4 per day. (YES, I know, it doesn't work as brain alone.) To have the camera with no time restriction, wonderful.

Again, your milage might vary. However, I hope you got a good use so far from it.

My best wishes for everyone's RED projects.

 

[jimhare]

Another thing to consider George is we are at a point unlike any in history. The industry is not like it was 5 years ago, and not even recognizable to what it was a decade or two ago.

Competitors can move much faster than they used to catching up to a good idea. When the Red 1 came out it really shook up the market.

At that time Sony was trying to get $ 1/4 million for their wares and many of us were shooting some form of DV.

Today BM has a 1080P camera for $995, you can buy an Alexa body for $30k and DaVinci is a free download if you don't need the panel.

You have gotten heavily into the Red camp, which is a truly wonderful place to be, but to suggest that Red is the only place owners are seeing a drop in asset worth simply is not the case.

Personally I feel for F23 owners who are still paying off a 10 year loan on a brick.

At least our cost of entry was so low there wasn't far to fall.

Most importantly of all, I consider all my Red gear being free since I've made a lot of dough using it. Yes, yes, that reward was for my time and talent, but having the best tools gave me the confidence to pursue and get higher quality work than I otherwise would have plus my reputation went up immediately.

Today there are many many choices for those making the leap to high end vision, and Red is still one of the best. That shows they are willing to make the tough decisions to adapt to the market rather than fade away.

The only way to stop price drops is to stop competition, but that's how Red started in the first place. :emote_happyhappy:

 

[Matt W.]

True of digital anything...

True of digital anything...

from computers, to CD players to TVs, etc. Part of it is legitimate (technology is progressing fast); part of it is buzzwords invented by manufacturers in order to spur cycles of planned obsolescence (3D and 4k being pushed down consumers' throats, but those will go the way of laser disc and SACD).

But it's true of digital anything. Manufacturers like it.

Sure film cameras lasted longer in terms of how long they remained useful and were cheaper to that extent--but consider the cost of shooting film. If you look at the return on investment and it's not working for you that's a problem with your business, not with the manufacturers of your gear. Study life-cycles and approximate how fast you can see a return on investment and of what size. There's a reason digital bodies rent for a higher percentage of their price than do film bodies or lights or such.

Lenses and lights hold value better. The dvx, hvx, EX1, etc. all lost value fast. It's just the nature of the product category. That said the cinema market is particularly young and evolving fast. It will cool down, as dSLRs have. D90s still hold value.

 

[George D.]

[QUOTE=BrendanLeahy;

I did get the BT Scarlet, so upgrading etiher way will very good. However, if I were to upgrade to the Epic and eventually Epic Dragon, that's $19k + the original $7k BT Scarlet - $26k total. How long will an Epic Dragon hold its value before the price drop?"




I guarantee ya Brendan, the Epic Dragon's price will drop like a rock, if you can afford to wait a year or two "at the most". Sad, but true!

 

[Bob Gundu]

If you can't pay off any gear within 6 months... Don't buy it.

 

[BrendanLeahy]

If you can't pay off any gear within 6 months... Don't buy it.

I think what everyone is trying to get at in this thread is that things are depreciating much more rapidly than before, and the title of the thread, "Why does RED Equipment Not Hold Its Value?", strikes at the heart of the problem: prices keep getting slashed and the market is becoming more and more saturated with cameras, especially Epics now with that trade-in program.

At what point are you going to be competing with film students that can afford to buy a RED/other 4K cinema camera (or hell, even rent all of the equipment for free from their university) and charge lower rates because they want experience? Six months won't be long enough to depreciate equipment, especially as clients become savvier about the technology and its over-abundance in the marketplace.

No one will argue that RED produces great images, but the average client won't care how much you paid to get a pretty picture as more cameras and their prices become competitive. Story is still king, but so is pricing, and as this technology becomes even cheaper, you're going to have great storytellers getting their hands on amazing cameras and charging almost nothing to work in the field they're most passionate about.

 

[Nook Kim]

Hi George,

To answer your question as honestly as possible i think its two fold.

1. RED depreciates there own items to "pass savings" to their customer base. This has been debated many times as being good and bad depending what side of the fence you're on.

2. When a company like RED starts out at a lower cost of ownership than the vast majority of other manufacturer's ie Sony, Arri, Vision Research etc there is a "brand perception" in the marketplace as being "Cheap". When amateurs flood the professional market with the same tools and undercut the pricing on rentals and sales of that tool it becomes perceived as less valuable and in reality is less valuable based on supply and demand, ie market flooded with supply as apposed to the amount of owner operator F65's or Alexa's for example.

When i bought my RED One I paid $27k for my package. Sold it 4 years later for $17.5k. Not bad for 4 years later IMO.

That said, given enough time all tools that were expensive at one point will become dirt cheap in the technology world these days. My Arri 435es package was over $150K when it was new and for about 5 - 7 or so years after it was released, and now you can get that same used package for $10K or less. Just sayin. Usually, if you want resale value in a product you stick with products/brands that have a history of good resale value, sort of like buying a home in a well established neighborhood that even during difficult times doesn't lose their property value that much compared to the newer housing developments. That said, you pay a premium to own those cameras to begin with. The good and bad with RED is, its a great entry cost and a great bang for buck, but the brand has cheapened itself and once that's established there's usually no going back.

That's actually really spot on. Especially the last part.