Future of Cinematography: Insights From the Rental Houses
COW Library : Cinematography : Debra Kaufman : Future of Cinematography: Insights From the Rental Houses
In Part One of this two-part series on rental houses, we looked at the impact that trends in the film/TV industry have had on the rental facilities that have long supplied cameras, lenses and accessories.
The first challenge that rental houses have had to adapt to is the constant evolution of acquisition formats, from film to tape and, now to data. As the use of film has dramatically declined, so the makes, models and formats of digital cameras have proliferated.
Each rental house has had to decide whether or not to hold onto its film cameras and services. And each has had to decide what video cameras to purchase and support, from the earliest days of HDTV until today's evolution to 4K. As the number of formats and, now, codecs, change rapidly, rental houses must be cautious about amortizing technology that may be obsolete before it's paid for.
Another trend has been the democratization of technology. When cameras cost six figures, only a handful of camera operators and cinematographers bought their own. With the advent of the RED ONE and DSLRs (Digital Single Lens Reflex) cameras, people who previously never would have owned a camera now do. And if everyone has a camera, can rental houses specializing in cameras survive?
Tax incentives are also sending film/TV productions to everywhere from Louisiana to Romania. Just as VFX facilities have established a presence in locales with great production tax incentives, so rental houses have had to respond to the trend of the roaming production. It's no longer enough to have a single facility in Hollywood or New York.
These are the challenges that rental houses are facing today. In this study, we look at the strategies that rental houses have devised to survive and thrive in an environment in which demands agility and flexibility.
ACCESSORIES MAKE THE RENTAL HOUSE
Since rental houses no longer have a monopoly on the cameras used in productions, many now emphasize accessories, especially pricey lenses. "We feel that to survive as a camera rental house, you need more diversification of services and rentals," says SIM Digital Chief Strategy Officer Jim Martin.
SIM Digital Chief Strategy Officer Jim Martin
Bob Harvey notes that Panavision isn't interested in carrying prosumer cameras. "But if a customer came in with one and needed some accessories, we'd try to put our lenses on these cameras," he says, reporting that Panavision did just that for an cinematographer Dean Semler, ASC who used an Olympus digital camera for special shots in Secretariat. "People can buy the cameras, but they can't buy the accessories."
"People were buying cameras who ordinarily would never think of buying a camera," Clairmont Camera's SEVP Alan Albert says, "directors, producers, cinematographers — people not even in the industry. The result is that we were getting a lot more requests asking for accessories to outfit these cameras: heads, matte boxes, lenses, follow focuses, all these accessories that people either didn't consider when they bought the camera or didn't have the money to purchase."
Bexel's Dickinson agrees. "The camera itself is the cheapest part of the equation," he says. "It's everything around it that costs. Lensing and accessorizing becomes more expensive than the camera."
Panavision anamorphic lens collection
Anamorphic lenses have recently risen in population; AbelCine's Mike Nichols says they're seeing the use of anamorphics in long-form productions. "It's part aesthetic and partly a way to combat the ultra-sharpness of the new cameras," he says. "These films are going for something more stylized, and they like the anomalies of the legacy anamorphic lenses. They create an interesting contrast."
The company has been "unbelievably successful" with its PVintage series of lenses. "We've taken a quantity of our more than 35,000 lenses over the last 50 years, re-sleeved them and brought the mechanics into the 21st Century," he says. "However, we've done nothing with the glass and coatings and they work beautifully on digital cameras. They're the most popular lenses we've got now, followed close by the Primos."
Rule Boston Camera has a full line of accessories and has concentrated its inventory on building this part of the market out. "We have an eye towards what people need, be it lighting or dollies, gibs and so on," says General Manager Brian Malcolm. "Lenses in particular are a great investment, as their price has gone up — not down — and there are more choices out there."
According to Malcolm, ten years ago, almost everyone rented a complete camera package. "Now, every other job is to accessorize someone's C300 or Epic," he says. "DPs are being hired because of their talent, but also on the basis of their camera package. And they come to us for the accessories."
Fletcher Camera's Zoe Borys agrees that an increasing number of camera rental houses are focusing on optics. "The lenses seem to be an investment for all of us," she says. "The idea is that they'll be around for 10 to 15 years, if not more. Compare that to what has happened with camera. A film camera had 20 years on the shelf and a digital camera has three. It's impacted all of us in a big way."
Birns & Sawyer has specialized in remote controlled jib and camera movement gear. "We standardized on a PL mount 35mm sensor in everything we do, and have been steadily growing our inventory," Bill Meurer says. "It's a partnership to the extent that people can benefit from what we have and the knowledge we share."
Another way that rental houses have remained relevant is open up new facilities in hot production markets. "Productions are chasing tax credits," says SIM Digital's Jim Martin. For those based in Los Angeles, the pressure is particularly acute because of the loss of production days.
Bill Meurer adds, "Los Angeles is a very competitive market in terms of suppliers and the business has diminished substantially due to a lot of business going where there are tax incentives. Our approach at Birns & Sawyer is to have highly qualified people and have the company sized for the amount of business we can service. We're in the relationship business and to shoot a production, we have to pay attention to detail. People who want the lowest price quote have other avenues they can use. That's not a profitable business model for us or anyone."
Still, the pressure to follow productions to states offering tax incentives is a pressure that rental houses ignore at their peril. "The rental houses are now the gypsy model," says Borys, who reports that Fletcher Camera has a 6,000 square foot facility in Louisiana and a presence also in Michigan.
"It affords us more opportunity to get the cameras working when they're in other locales. We have to figure out the opportunity to move the inventory, and it doesn't have to be fixed in one location that's your main address. It's about our relationship with cinematographers, unit production managers. So you bid, whether or not you have a brick and mortar facility in the location."
Panavision is another company that opened a new office in New Orleans; the company is also in Atlanta, New Mexico, Dallas, New York, Vancouver, Toronto, Montreal, the U.K., Paris, Italy, Hong Kong and Australia. "We're everywhere, with continuity between film and digital in every office," says Harvey, who notes that some locations are served by brick-and-mortar facilities whereas agents represent others. "If we see trends in a certain area, we are prepared to open an office and keep it open," he adds. "We're looking for metropolitan areas to service a 200-mile radius. We're prepared to do whatever it takes to service filmmakers."
One of Panavision's many locations.
Although many rental companies are opening up facilities in different markets, they try to keep the actual capital investment lean. SIM Digital was founded in Canada 30 years ago, is headquartered in Toronto and opened its Los Angeles offices in 1999. Four years ago, they opened an Atlanta operation.
"We don't have 20,000 square foot facilities everywhere," says Chief Strategy Officer Jim Martin. "It'll be 10,000 to 15,000 square foot facilities. And we are experts in international logistics, so if Vancouver is in a great pilot season and Los Angeles isn't, we move the gear. We're always moving the gear — and the people — where they need to be, which is why we don't need huge facilities."
SIM Digital's 7,000 square foot facility in Atlanta has experienced tremendous growth, recently supplying camera systems to the television series The Vampire Diaries and Season One of Revolution, as well as the feature production The Good Lie.
SIM's post production unit Bling Digital recently provided dailies processing services to the Sundance Channel series Rectify.
"If there's enough work to sustain an office, we'll keep it open," says Martin. "But we go in skeletal when we start off and if there isn't enough work, we'll close up." That happened when Alcatraz began shooting in Wilmington, North Carolina. But after that show got canceled, and Revolution decided not to shoot there, that validated SIM Digital's hunch to facilitate the Wilmington shoots from Atlanta rather than open a North Carolina office.
SIM Digital Atlanta's General Manager Ann DeGuire
Although productions still are likely to travel to states with great tax incentives, it's a mixed bag. AbelCine's Nichols notes that shooting in New York City can garner a 35 to 40 percent tax rebate. "That makes shooting in New York City very appealing," he says. "And it's very much taken advantage of by indie features."
In Boston, Malcolm says that, before Massachusetts' tax incentives came into play, Rule Boston Camera thrived by providing professional equipment for local productions and a large smattering of Los Angeles and New York productions.
"Now, because we're a smaller rental house than those in Los Angeles and New York, cinematographers tend to bring their own gear with them when they come to shoot," Malcolm says. "Boston is still a provincial market and doesn't have enough equipment to support a large feature. But we have had an increase in business for features budgeted at under $10 million. It would be great to get the $150,000 rental as opposed to the $5,000 rental, so we have an incentive to grow. But we're worried if the tax incentive goes away, we'd become a ghost town. It's not written that it will exist forever."
Rule Boston Camera has incentive to grow.
Just as VFX companies have learned, building a brick-and-mortar in a region with tax incentives can be an unstable proposition. "We're also in Michigan," says Fletcher Camera's Borys. "The market has had its ups and downs. Right after they got their new governor, he capped incentives, which had been uncapped at 42 percent, at 25 percent. Word got out quickly that he'd cut a lot of the funding available for our industry. Our market hasn't disappeared — we're doing How to Catch a Monster — but it's changing. Any time the government infrastructure changes, including the film commissioner, things can change."
And despite tight times in Los Angeles, nobody is thinking of closing up shop in the heart of Hollywood. "There is enough in Los Angeles to make it worth it," says Martin, whose SIM Digital is a relative newcomer. "Sitcom and multi-cam is strong here, and we've invested time and money to break into that. We're also ramping up file-based workflows for sitcoms."
As digital cameras have proliferated, camera rental companies find themselves involved in the downstream portion of production, and the result has been an increase in strategic alliances between rental houses and complementary service providers.
"There is more integration between the camera equipment supplier and the post world," says Clairmont Camera's Albert. "What it does mean is that the rental house has to be proficient in new areas of expertise that they weren't involved with in the film world."
At Clairmont Camera, the digital department is now the largest single department in the company. "The digital technicians spend a decent percentage of their time going through workflow choices with customers," he says. "These are discussions that hardly ever happened in the film world."
SIM Digital purchased Bling Digital, which allows the company to offer Bling's POD (Post On Demand) systems, all-in-one solutions that enable productions to carry out a variety of post-production processes in their production offices or near-set environments. The company also acquired Master Key, which brought in finishing on Suits and Covert Affairs.
"The Los Angeles office was based on the premise that it would be a post house," says SIM Digital's Martin. "We found a lot of major feature companies were shooting and cutting the first three months of their film in Canada and then would move the rest of editorial, which could be up to nine months, to the States. So we opened up a satellite office in L.A. to act as traffic control. If you shoot the movie in Toronto and want to come back to L.A., we're here."
SIM Digital showroom
The company is also a big believer in bundling of services, which it's been able to do as it's acquired post companies. "We offer bundling discounts," says Martin. "That plays into our competitive advantage. We offer offline, conform, finishing, on-set data management, dailies and even LTO archival. We've only been doing the finishing for a little over a year, and it's going very, very well."
Five years ago, Boston Camera, a traditional motion picture rental house, and Rule Broadcast, a traditional broadcast rental house, merged and moved into a brand new building. "We have been growing and expanding since then," says General Manager Brian Malcolm. That includes getting more into the workflow of the project.
"Rental houses will get involved more in post production," predicts Malcolm. "Whether it's shared storage or media management — the full life cycle of the content, rather than just renting equipment. That's where we're heading as a service."
Rule Boston Camera's staffer Tom Talbot consults with clients on shared storage, data asset management and other workflow issues. "We're currently working on a system for digital dailies," adds Malcolm. "Productions are looking for an on-set person and system to wrangle data as it comes of the camera, and we're working on a couple of turnkey solutions to either rent or provide with full-service."
Fletcher Camera's Borys recalls hearing former Kodak President, Entertainment Imaging Division Joerg Agin talk about future business models. "He said strategic alliances were going to be everything for survival in the 21st Century," she says. "And I took that to heart." For Fletcher, that's meant making alliances in burgeoning rental markets rather than building a new facility. In Fletcher's case, that includes Texas, Atlanta, Seattle, among other markets.
"The amount of money that everyone has to put out to be competitive in this changing landscape is getting harder to do," she adds. "There has to be some consolidation, just as there was in the lighting and grip industry." Consolidation is already part of the industry. SIM Video recently bought up Production Services in Canada. When cinematographer Bill Meurer took over Birns & Sawyer in 1998, he consolidated that rental house's operations in North Hollywood, leaving a second 9000-square foot space in Hollywood.
Rental houses are also creating strategic alliances with regard to helping filmmakers create an entire workflow pipeline. "We are having more and more conversations with post production supervisors," says Borys. "If it's ARRIRAW, we ask what the deliverable will be. That used to be something the camera house was never involved in before. Now we're having more conversations with Technicolor, Deluxe, DITs, post production supervisors, and understanding the whole pipeline."
Clairmont Camera's Vancouver office now has a strategic alliance with Scarab Digital, a post facility that creates dailies and playback on set and rents editing equipment. The alliance is so tight that members of Scarab are now located in Clairmont's offices. "Now when a DP or producer comes in, they can arrange for their camera package and square away the dailies service as well," Albert says. "In addition, we work very closely with Scarab in terms of creating LUTs."
Borys is pro-active, sending several staff members to the HPA Tech Retreat. "We try to force conversations about post production earlier," she says. "If we don't start correctly, the back-end can get messed up."
Since AbelCine sells cameras as well as rents them, it has created sales relationships with other rental houses throughout the country. "We have no rentals there, but we have rental house clients that we have great relationships with, and we've done pretty high quantity sales to those rental houses to satisfy their jobs," Mike Nichols says.
The showroom at AbelCine
With significantly more rental houses now than in the past, as well as owner/operators and a proliferation of formats, codecs and resolutions, rental houses face more fragmentation and competition than ever before. "The sheer volume of cameras was no where near what it is today," says Albert.
"The rental house has to stay innovative," says Rule Boston Camera's Malcolm. "We're constantly thinking of way to serve the client and what that service entails. In the heyday of camera rentals, people had a budget and got a whole camera package. Now there's a lot more nuance to helping a client. We've embraced the change."
Embracing the change is the way to keep the doors open and the company flourishing. Rental houses have been nimble to adjust to the changes, but at the same time, their executives realize that their slice of the business has become more precarious and changeable than ever before.