The Hollywood Post Alliance’s Sales Career Resource Group (SCRG) met to discuss today’s most germane question: In a market where the pressures are greater than ever to lower costs, how does the post house sales person sell? Is there merit in creating a value proposition versus a simple cost comparison? Have there been similar past economic challenges that have resolved themselves? And, finally, is there a light at the end of the tunnel?
Moderated by Peter Caranicas, an editor at Variety, panelists included Naida Graham of Industry Sherpa; Bob Katz, a line producer of independent films; Charlie Mitchell, an independent film consultant; and consultant Robert Solomon, most recently president of the creative services division at Ascent Media. The room at the Universal Sheraton in Universal City was packed, due to the critical nature of the discussion.
Caranicas started off the conversation by noting that “itâ€™s been a pretty scary year.””Weâ€™ve reached a low plateau and there are some signs of stability,” he said. “But where will we go?” Each panelist gave a wrap-up of how the economy had impacted them. Graham noted that she was in flux between being editor of the now-defunct Below the Line and entering the world of producing. “But there’s zero money out there,” she said. Solomon noted that Ascent Media became “very lean and focused, and we had to balance that out with responsibilities to employees and customers.”
Mitchell also left a job to launch his own business, just as the economy was plummeting. “You start seeing fewer people–theyâ€™re letting sales teams go,” he said. “It affected my business, and as I kept my business on the side and looked at my next opportunity as an employee, it was an eye-opener as to how many opportunities were out there.”
Katz said that most indieÂ film producers–those still around– have reduced the size of their operations. “Iâ€™m fortunate enough to get movies made,” he said. “But a movie I would have made for $12 or $14 million, I have to figure out how to get made for $7 million. Everyone has to take less, from the actors to the post houses.”
He’s always looking for creative ways to save money. For one Latino-themed movie, he relocated production from Miami to Puerto Rico, where he got 35 percent of the production budget back. He told his post supervisor that he only had $30K for a sound package. “And we found someone who would do it for that,” he said. “They had to keep the doors open. Thereâ€™s still money to be made in indie movies, but not as much. Good movies will have to get made at a lower price.”
Solomon observed that “covering overhead costs isnâ€™t a way to survive.” “Itâ€™s taking a long walk off a short plank,” he said. “You have to understand the ecosystem.” He offered the analogy about the transition to HD in the broadcast market, which requiredÂ hugeÂ capital investments. “We thought about where there was value, which was from downstream distribution,” he said. “We got subsidies from Sony and Panasonic for the shows we did, because they wanted to propagate it. If they wanted a High Def master, they had to kick in. And we got a subsidy from syndication. So if our core customers said they had no money to pay for it, we looked at ways to build support and maintain the rate structure.”
Educating the customer is more important than ever. Graham said that she’s learned that “people didn’t know what they didn’t know” when working in a tapeless environment. Mitchell noted that “the level of trust and comfort” became increasingly important as the economy went south.Â “That is what separates you from the competition,”Â he said. “Being their partner.”
“To prosper, you have to know local trends and then bring it back down to your industry,” said Graham. “Take a DIT out to lunch. Find out the difference between codecs. Find your gurus. When sales arenâ€™t happening, go out, go out, go out. And then you start making connections and marriages. If it doesnâ€™t make deals, it will make you the single person out there who knows the most.”
Caranicas asked if the pressures of the economy has made customer service suffer. “Facilities are understaffed, so the burden increases on the post vendor to try to get engaged early and understand the issues,” said Solomon. “Be proactive, not responsive.Â Customer service will decline. Someone will say thereâ€™s just no more money for the luxury of a technical resource in engineering to resolve problems or a customer service person who brought you your latte in the morning.”
Mitchell noted that, as customer sesrvice cuts back, the sales person is hurt directly. “If you say the xperience of working with me will be better, and if they have a bad experience, it reflects directly back on you,” he said. “Ask what the #1 important thing is of all the things they want. Say you can do that, but not as a low cost leader and then guarantee the service.”
In February of this year, continued Mitchell, sales people’s mindset was “fear, panic and worry.” “If you compare today to then, theyâ€™re not as shellshocked,” he said. “Right now, although itâ€™s not as good as 18 months ago, itâ€™s turning around. Production is starting to happen.” He believes that when times were good, “we got a little bit lazy.We sent an email instead of making those personal connections.” “When things were bad, I said, if youâ€™re not getting out there and meeting with everyone, your competition is,” he said. Katz confirmed that he’s getting 8 to 10 cold calls a week from post houses sound facilities and VFX companies.
Graham encouraged sales people to think about what their company’s brand is and then make that brand consistent on Twitter, Facebook, LinkedIn and in conversations. Katz pointed out that vendors who sell to WalMart lose money, but it helps them increase their business at Target, Sears and other places. “Two years ago, I wouldnâ€™t have gotten anyone for a lower price,” he said. “Today there isnâ€™t anyone I wonâ€™t get for a lower price. Because I donâ€™t have the amount of money at my fingertips that I used to have. I do the same thing at the post houses, but I want it for less. Even the studios are doing that.”
Solomon pointed out that we’ve seen economic downturns before. “But I have to take exception and say youâ€™d be making a terrible mistake if you looked at our situation and just blamed in on the economy,” he said. “Thereâ€™s a fundamental change going on in the entertainment industry. Business models will place emphasis on different skill sets.If you think youâ€™ll emerge from this when the economy getes better and youâ€™re not innovating, youâ€™ll be one of those left behind. The economy is forcing the entertainment industry to change, and it’s an industry that hasnâ€™t been that fast to change in the past.”
Mitchell agreed that “a lot of sales people used the economy as an excuse to not make those calls.” “It separates the successful ones from those who arenâ€™t,” he said. “You have to do things you did early in your career that maybe you stopped doing.”
Caranicas asked that if budgets are cut 40 to 60 percent, can a post house be 40 to 60 percent more effective? Solomon said that “if you arenâ€™t learning to cut your expenses by 40 to 60 percent youâ€™re in trouble. Post houses donâ€™t make 40 to 60 percent profit. Unfortunately, there are all kinds of places to look at where you create efficiencies. You have to re-address things that you used to think were sacred.Â Changes are pervasive.”
Should sales people expect to earn less in the future? No, said Mitchell. “If youâ€™re successful, if you do a good job and are selling the right product and providing a good level of service, you might have to sell a bit more, but you wonâ€™t be compensated less,” he said. “The checks companies like to write the most are to sales people because they tie it directly to revenue.”
Topics: Blog ascent media Charlie Mitchell General Hollywood Post Alliance independent films independent producers Michael Solomon Naida Graham Peter Caranicas Post-production Production Sales Career Resource Group SCRG
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