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Blackmagic & DaVinci, and What It Means

COW Library : DaVinci Resolve : Grant Petty : Blackmagic & DaVinci, and What It Means
CreativeCOW presents Blackmagic & DaVinci, and What It Means -- DaVinci People / Interview


Blackmagic Design
Melbourne Victoria Australia
CreativeCOW.net. All rights reserved.


In addition to manufacturing IO cards, converters and routers, Blackmagic Design has a complete postproduction facility in Singapore. Their gear includes two DaVinci Resolve systems and two DaVinci Revival film restoration systems among others. In his conversation with us, BMD founder Grant Petty talks about the ways in which the purchase was motivated by the same things that has always motivated BMD's development strategies: a love of beautiful pictures, and the desire to create what they need for their own post business.

Getting back to Singapore from the company's base in Australia is on Grant's to-do list. "I've seen demos, and I kind of know some basics, but I've never done a real grading job on Resolve," he says. I need to get some training on how to use it myself, and keep getting better at it." This will be somewhere in between taking care of five-month old twins at home, and continuing to hammer out details of the immediate plans for DaVinci.

You'll see the very much real-time aspects of this in our conversation with him.

Chapters:
MAXIMUM FLEXIBILITY "Support contracts damage a company's culture. There's no incentive to focus on innovation. Your next meal should come from the thing you do today."

PERFORMANCE FIRST "The days of closed-off systems are over. I've never liked them from the start, and I'm not about to do that now just because we've got DaVinci as one of our product lines."

A LIFETIME OF INSPIRATION "When I became a telecine engineer, I always hung out in the DaVinci room. It was magical! The pictures out of it were the most amazing things I'd ever seen."

BETTER PRODUCTS, BETTER MARKETING "The lower case 'd' and upper case 'V' - I just thought that's the WORST combination. It looked like the kind of word you'd stub your toe on in the middle of night, and then get really angry because it hurts."

 

MAXIMUM FLEXIBILITY

GRANT PETTY: We've made some decisions on how we're going to fix the company financially, but the fine details are being worked out now.


CREATIVE COW: That's why it really jumped out that your first step is to get rid of the support contracts. A lot of companies have used support contracts to not only keep the company afloat, but in some cases, they're the company's only profit centers. How are you reconciling this with the need for cash?


GRANT: Well, there's a couple of things. We find that this kind of support structure is annoying to the customer. One thing that I've always sworn that I would do at Blackmagic is remember back to when I was a post production guy. I wanted certain things, and they couldn't be done because of some company policy, and it really irritated me, It's not easy, but I've always tried to make sure that there's this kind of maximum flexibility for customers.

I mean, in the days when people charged for codecs, we had a free software codec - even if you didn't have any of their hardware, you could still open and read the files and render them. My theory was, what if you're some freelance guy, and you don't have any money at all? You just want to add some effects and graphics, and finish the job. That's what we would have wanted for ourselves.

We have also been making hardware so that the same board plugs into Mac or Windows. That was the first time anyone had done that. They wanted to be able to quantify their Mac or Windows sales, and different cards was the best way to do that - but that's a business thing. That doesn't help the customer. What helps is being able to do 3D on a PC, then some Final Cut editing on a Mac, or maybe you buy a different kind of computer and want to take that card with you. You want flexibility.

I always want to keep that perspective: what would I want if I'm trying to get things done, and want to meet client needs? So my feeling was that the whole support contract thing was really wrong. From what we could see, nobody had had enough failures to justify the cost of those contracts. Even the price of spare parts was too high.

It's getting back to the customer focus, and what we would want if we had a DaVinci system - and we've actually bought four!

The machine room in Blackmagic Design's post facility in Singapore, where they have 2 DaVinci Resolve systems, and 2 DaVinci Revival systems
The machine room in Blackmagic Design's post facility in Singapore, where they have two DaVinci Resolve and two DaVinci Revival systems

 

That's obviously how I feel from a customer point of view. Putting on my hard-nosed business hat, these support contracts actually damage a company's culture. If we've got a bunch of customers that keep paying us every year, we don't have to do anything now. And that's what happens -- everything slows downs. The company becomes more content just trying to keep the status quo. There's no incentive to focus on exciting innovation.

My feeling is, your next meal should come from the thing you did today. Just like our customers do. If you're in a telecine suite and your clients walk out unhappy, they're not going to come back.

I think it should be the same for a manufacturing company. It's about blowing people's minds with exciting ideas. If we don't have that culture because we get hooked on a bunch of support contracts for customers that we've already got, I think ultimately the customers just don't win.

When we were doing the due diligence on DaVinci, I saw a $50,000 price in the price list if you bought a secondhand system, and now wanted to be supported by DaVinci. And not only that, you're paying upward of $80,000 a year for support contract after that. I don't think that sounds like a great way to keep the resale value of a secondhand product up.

So, just by doing away with a lot of it, we add flexibility. If someone buys a secondhand DaVinci system, they only need to pay a couple of hundred dollars for one of our engineers to have a look -- maybe it just needs a board, a new cable or something. My feeling is, let's try to make that happen without making them pay $50,000.

If someone wants to sell a system, it's obviously not in active production. We're going to do do our best to look after people if they buy one of these systems. I think that should do something to raise the resale value.

There are still a lot of questions around these areas. We want to work a lot more things out, but I just have this general feeling that we can do a lot better here.

COW: Even just the idea of trying to support value for second hand systems is unusual. Some companies have tried to make things so annoying, that the only solution is to buy a new product.

GRANT: We see the same thing happening with these robot machines that make circuit boards. I had one company say to me, "You can't buy that gear second hand because we won't support it." I said, "Fine," and, I haven't bought anything from them ever since. I just think it's insane. Don't they realize that people have the right to choose? That's the whole point. There's actually multiple people you can buy color graders from. If you don't treat people right, they'll walk.

I just think that's the fundamental thing. You've got to treat people right, treat them how you'd like to be treated yourself. Don't get so arrogant to think that people are going to keep coming back to you, and you can just do pretty much whatever you like, and charge whatever you like. That's just not the way it works.

DaVinci is one of those brands that the clients ask for, but that doesn't mean you should ever take that for granted. To take a brand for granted is a really bad move. Brands should be nurtured all the time through excitement and ideas.

We're not going to get it right every time. We're going to make mistakes, but at least we're trying to do our best all the time.

Back to top

DaVinci Resolve
DaVinci Resolve

 

PERFORMANCE FIRST

COW: Well, since you mentioned price, where's my $995 DaVinci?

[laughter]

GRANT: What's funny is, we're looking at the company, and we're thinking, "Everybody's going to think we're going to do a really cheap version."  And our consultant was even saying to us, "But this is such a different thing for you guys." Yeah, kind of -- but it's not really different if you look at who we are. We're post production people who just want to make the things we need to do our job

We've looked at this thing and think, could you reduce it in price? You can see developments coming in the future that might help to do that. But ultimately this thing is all about performance. It's a pretty screamingly powerful system. You can start with one computer with a couple of GPU cards in it. But to really get good performance you sometimes need 2 or 3 computers, and it'll do real time 4K stereo every day. It's a ridiculous amount of processing.

You probably will see price reduction on the high end systems. I think at the moment the highest end systems are $850,000, I don't think we'll ever sell a product for $850,000. That's just my feeling. I just don't think the cost of the hardware that works with the new software DaVinci just released justifies that kind of price. You need eight GPUs or something like that. And you need three fast Linux PCs, and a bunch of Infiniband stuff. I don't think that adds up to 800,000, I think you come in more likely at $500,000 or something like that, $600,000 maybe. But then you've got some pretty high speed disks to do stereoscopic 4K. We're checking that out now.

But you know what we're like. We'll always be thinking of possibilities for reducing prices. With things like Apple Color on the low end, I think that ultimately there will be some reductions, but performance first, then cost second.

 

COW: So do you have any thoughts on the new features, is that something you can talk about yet?

 

GRANT: The Resolve had a card in it called the Transformer card, which is a really big and complex PCI card that had a whole bunch of incredible algorithms in it. So when you were grading, you know you could just rotate horizontal, vertical positions, zoom, crop -- a bit like what you can on a telecine. A bit like the kind of work I used to do, scanning film on the old tube-based telecines. But this Transformer card was just incredible quality, really amazing. The pictures were perfect.

What we've done is put them onto the GPU processing, so now you don't need that custom transformer card. The systems needed new motherboards, because the Transformer card was PCI-X, not PCI Express. Now, you can just use a PCI Express video card.

Over the next six, twelve months, our plan is to open up the DaVinci product to allow other things to work with it.

The days of closed-off systems are over. I've never liked them from the start, and I'm not about to do that now just because we've got DaVinci as one of our product lines. I'd like to see it opened up to all sorts of friends and enemies, you know. They're not enemies, but competitors. I don't have any enemies, you know. [Laughs]

The good thing about that is by allowing customers to use more off the shelf hardware, it also means more modern hardware. You can use standard GPU cards, and get a much more powerful system, with new cards that we should hopefully be able to incorporate much faster.

 

DaVinci Revival film restoration system
DaVinci Revival film restoration system

 

COW: Still people's perception, and perhaps for good reasons historically, is that Blackmagic was all about cheap IO and converters. You've added some large scale routers, but this is still a long way from that.

 

GRANT: Yeah, you could say that.

In the first few years, it was all about capture cards. I think that that was the most pressing need at the time. But then as you get bigger, you start realizing, "Hey, look, I've got enough engineers that I could actually do two things at once." I had been slowly collecting a bunch of good ideas that I would be nice in converters, but we weren't really ready for it.

One of the problems with mini-converters is that there's so much jammed in them. I mean you've digital and analogue audio, SDI, three gigabit, component and so on. If you open it up and have a look, there's a lot of stuff jammed in there. I mean a lot of stuff. So it all came together a couple of years ago, where we had enough miniaturization in electronic design.

I mean even that big router, I remember about a year ago when we saw a machine that we could build a router with far more inputs and outputs, in a smaller space. Sometimes you have to wait for the right technology or time to come along.

So it's not like there's some big master strategy plan here. Sometimes it's just that things can be done when you've got the right people, and you've got the right situation, and suddenly you go, "Hey, we could do this!"

And then you just sort of do it.

Back to top

 

A LIFETIME OF INSPIRATION

COW: From what you've said recently, it seems that the first sight you saw of a DaVinci, and your experience as a DaVinci operator, and the inspiration of beautiful pictures kind of moved you forward through the rest of your career. Am I overstating that?

 

GRANT: No. It's actually simple as that.

The high school I went to as a kid was a village school in a poor area. I didn't know this at the time, but there was some government grant money invested, hoping to generate some benefits. They said, here are a lot of poor kids, maybe we can do something spectacular. All I knew was that the high school had a TV studio in it, with a couple of pretty crappy cameras and some simple mixers. And it had a room full of Apple II computers. I was a kid going to class, simultaneously playing with the TV studio and programming Apple II computers.

We found that if we left every single cable perfectly wrapped up and the place totally clean, the teacher would let us stay there. We'd be there at 5:30 in the morning when the first cleaners came in, and shoot three or four music videos every day before classes started, and stayed late into the night.

What's really bizarre is that Blackmagic is in some ways really just computers and televisions jammed together.

We had a work experience program at school. They jobs didn't pay much, but they went to course credit. I did a radio station first. The technology was pretty interesting, but I was putting up cart racks on the wall, building various bits and pieces, doing cabling and stuff like that.

But the TV station blew my mind. I thought, "This is cool! This is the best thing ever!" Timecode, 1-inch machines, a D1 machine, timebase correctors -- I literally didn't go home. I stayed there. I was so tired I could barely see, but I only had a week to learn as much as I could.

When I walked into the telecine suite, my mouth dropped. The DaVinci was just this magical thing. Screens were glowing, and waveforms were updating - there was just an air in the room. And the pictures! Even now, nobody really gets to see the RGB pictures straight out of a telecine. I couldn't believe it. They were the most amazing things I'd ever seen.

Once I became a telecine engineer, I used to hang out in the DaVinci room. I'd get them to show me things, and when a client showed up, I just grabbed a soda out of the refrigerator and sat chatting with them, watching the grading session. I had this absolute fascination. I watched this colorist just pulling colors out of the background, and thought, "Where did that come from? Was that really there?" Before the session began, the background of the picture was just this moldy wall, and suddenly it was the most amazing, beautiful colorful environment.

I remember we used to get some suppliers coming in, and engineers who felt that knobs and buttons were beneath them. I said, you don't understand what these guys are doing. What they're doing is real-time creativity, in front of the client. They've got no time to practice, no time to rehearse. They've got to get it right, NOW. It's a really high stress environment, and they handle it every day.

That's why DaVinci is important. That's why clients ask for it.

(Here's something really funny. The guy who ran that place is actually a DaVinci distributor! We're working together now.)

That's the thing. There are these sorts of ego driven people, they're in it because they like the lifestyle. But the people who are actually successful are the guys who love images.

I was walking down the street with a Quantel guy, a Harry guy, and he said to me "One day I was walking out of a post production facility, and the boss looked up and said, 'I could get a good key off that sky.' Now every time I look at a blue sky, I think about the kind of key I can get off it."

Now I've got the same problem! I look around the world and say, "Hey, is that 10 bit? Is that good enough quality?" So sometimes it does damage you a bit.

Anyway, that's all is to me. To make things and enjoy doing it. I think that's why most people start their own independent companies. If you've got a lot of ideas, then you realize you gotta go and do it yourself to fulfill them.

Back to top

DaVinci Resolve Control Surface"There were too many names. When we came in, the control panels were called 'Impressario,' but that sounded a little weird. We're now just calling it the Da Vinci Resolve Control Surface."

 

BETTER PRODUCTS, BETTER MARKETING

COW: As difficult as these things are in a lot of parts of the world, you're talking about now coming "all the way down" to $600,000, maybe $500,000 dollars -- and you've eliminated your immediate cash flow through the support programs. How are you going to survive? How are you going to grow?

 

GRANT: I am a firm believer in always doing new things. I think if we get back into the culture of backing new things, I think that it will happen. It's not a short term thing.

The great thing about Black Magic is that we don't have any investors, we don't have any debts, and we don't owe anyone a single dollar - so we can give things time to mature. We certainly don't have to make millions of dollars overnight.  And once you do the right things, I reckon the sales will come. I think it will take a little while for people to understand what we're doing, but they'll get the hang of it. We'll let it do its thing, we'll invest in it, and add new features in. This recession will end, and things will be better for the higher end.

Of course, the main thing is that it has to pay its own way. I don't want to be losing money. I still have a business to run, and have to be clear about that. Otherwise, it could damage other people.

I also think that businesses that don't do well are depressing. Everybody knows when the company they're working for isn't doing well. So you make it do well, because otherwise, it's not fun.  

I think there's a lot of love for the DaVinci products, and I think the new software updates that are coming are really, really good. We know we're not going to get everything right straight away. There'll be tweaks and adjustments and things we do and stuff like that but I think it's going to be fine.

Part of the problem was the marketing. We've already put up a new website. It's basic, but it's getting there. I had a quick look at a couple of other websites, and these guys all seem to be banging on about the same thing. I thought, let's just get back to talking about why you buy one of these things.

 

COW: Good! The old site was hideous.

 

GRANT: I didn't really say anything too negative at the time, because the poor guy, he probably worked really hard on it, and he thought it was kind of cool. I think he was just under-resourced.  We got some designers who can help out so we've got it looking better, but yeah, I joked that if I went to the old site, I don't know why I'd want to buy a DaVinci. Maybe I felt like buying a piano, because there's this shot of some of woman using a piano. And then there was this really strange, actually slightly scary sort of a lady with some kind of really weird mask on. I thought, "What's this? Do I need one of those red balls, like in Pulp Fiction?" I just didn't understand.

 

COW: We have this theory, that good marketing and good product development can go hand in hand. They reflect that the company understands the products and their customers.

 

GRANT: I think it's a matter of respect to the guys who do creative work. Even the packaging - I don't know that it has meant any extra money, but it's definitely fun to get the design right.

It's funny, I remember one week, I had nothing but rice the whole week. My shoes had worn through. I had to get insoles in them because my feet were touching the ground.  I didn't have any money because I was putting every cent I had into the original capture cards that we were doing. It's amazing to think that now, there are all these exciting people here. It's a privilege that I never forget, because I know what it's like to start with just one guy in the back of a post house.  and it's kind of like privilege you never forget because you know what it was like to start off with just one guy in the back of a post house.

 

COW: Last question: how do you spell DaVinci?

 [laughter]


GRANT
: This is pretty funny, because during the negotiations, this was a sore point. They said, it's supposed to have a lower case 'd,' and I'm like, that looks terrible! A lower case 'd' looks really bad.

They actually had a company style guide, -- it was like a horror novel! It took me a couple of days to read, and it was almost like, I don't know - somehow if you could do the opposite of it, it would be good design.

The lower case 'd' and upper case 'V' - I just thought that's the WORST combination. It looked like the kind of word you'd stub your toe on in the middle of night, and then get really angry because it hurts.

We'll use all upper case in fontography, but for writing, it's DaVinci. It's camel case, but it reads better.



We appreciate Grant taking time away from newborn twins and a rebuilding a company to start this conversation with us. As Grant mentiones, there are still details about the new Blackmagic DaVinci being worked out as you read this. Be sure to use the comments section to let us know what you'd like to hear about next.

In the meantime, be sure to take a look at our additional coverage of the story:

Blackmagic Design Buys DaVinci: Part 1

Blackmagic Design Buys the Power of DaVinci: Part 2

Cinefilm's Ron Anderson: DaVinci User Since 1986

 



Comments

BMD Support
by Michael McGlone
On the contrary I have found Blackmagic Design for the past 4 years to offer excellent and personable support (albeit via Australia and Email for the dialogue part). I have installed many BMD products for clients and use them myself and can honestly say they do a fine job, and better than most others.
Adding service, charging less
by Tim Wilson
To amplify Michael's point, Grant is very clear: DaVinci was taking $80,000/yr. from customers, and never giving anything like $80,000 worth of service. They required $50,000 to do ANY service on a secondhand system, which might require no more than a few hundred dollars worth of service and parts.

(An editorial note on this point: as is standard practice, this interview represents a small part of our hour-long conversation, a significant portion of which was devoted to service. I returned one of his sentence back into the edit to clarify this point. Coming soon: a multi-part podcast of our unedited conversation.)

As noted in one of the articles linked above, can you imagine that there wasn't a DaVinci service office in New York? Blackmagic is adding one there. More service is coming, not less.

The big story is that Grant is blowing up one of the fundamental business models in this industry: taking much, much more money for "service" than is ever provided. I know that you know of companies who require an entire annual service contract to provide even single-incident service, and some who simply don't sell products without service contracts.

This is how companies get into positions where they're taking huge profits (one company told us as much as 90%) for doing virtually nothing. This is also how companies lose incentives to innovate - they're getting money for doing so little, so why be in a hurry to do something new?

His point was that he wouldn't want to do business with a company that soaks its customers like this, so he's not going to BE a company that does it.

This is a theme he struck several times: he hates closed systems, so even though DaVinci has been one, it's not going to be any more. As a postproduction customer, he never liked service contracts; as a postproduction vendor, he will not sell them.

Imagine, a company that needs money, deciding that it has already been taking too much money from its customers, so immediately cuts the costs it can! Let me know when you hear another CEO who admits that his company has been taking more money from customers than it should.

The last note I'll make re: service: virtually every company represented in the Cow reads the forums closely. That's great. We appreciate that, and we're pleased to help draw their attention to your problems. Blackmagic is one of the ones that takes the extra step to actively, publicly participate. We think that's a pretty remarkable commitment to service.

Service is obviously a critical topic, so we'll be happy to follow up on that in our next conversation with the folks at Blackmagic.

I'm giving 5 stars not for my work as an editor, but for Grant giving us his time while the plates are spinning. You'll being hearing more soon.


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