With a recession that has no end in sight, companies in virtually every industry are hunkering down for hard times. The film and television industry is no different. We’ve already seen a number of companies go out of business, from large VFX houses like The Orphanage to smaller boutique editorial/design outfits like Version2. We spoke with a number of heads of companies about strategies they are implementing to weather the economic storm and found a few consistent themes. All are looking to improve workflow efficiencies, some are diversifying their services to offer clients a more complete package and most have a hiring freeze. And while all of the respondents we spoke with said they have no plans to cut their rates, their replies of “no” were followed with a conditional “but…”, so take that with a grain of salt.
In addition to the heads of companies we also spoke with Simon Hayhurst, director of product management at Adobe, about his perspective on how the economy is changing the way companies need to operate. Besides Hayhurst’s recommendation that Adobe CS4 is the answer to improve efficiency, lower costs and thus survive, he had some interesting thoughts on the shifts in the industry and what it may mean in the end.

“Six months ago a lot of the conversations from customers were: Tell me what I need to do so my work stands out. It was all about the artistry then,” notes Hayhurst. “Now it is all: How can I win the bid? Give me something that may be subtle but that makes my [service] package stand out. Now people are looking for services that will make them stand out, whether it’s at a post house, an ad agency, or a videographer.”

Hayhurst does not believe that successful companies during the recession will be those that simply stop investing in their business and squirrel away every penny, but rather those who move toward more cost effective workflows.

“It will be interesting to see what this does for the tapeless transition. It is an interesting time that has forced people to think about more efficient and lower-cost workflows. Whether that means shooting with the Red camera or a Sony EX or P2 to avoid film scanning costs or avoiding tape-based workflows in post. Tapeless workflows may actually benefit from the recession. It’s almost counterintuitive because downtimes are usually not when people invest in a new kit.”

Read below the strategies a variety of companies — from mid-level edit/design shops, to large, full-service post facilities, to those targeting new media outlets — are taking to make a profit in the current recession.

Sean Henry, Calabash Animation
executive producer

animation production

What has the state of the economy meant to your business?
For us it may still be a little bit too early to tell. Business has remained strong for us as far as cereal commercials are concerned, but the rest of the advertising industry seems to be tightening their belts and re-using or re-purposing old spots rather than investing in new productions. One possible telltale sign of the struggling economy is that while we have seen a marked decrease in  new business from the agencies, we have also been seeing an unusually high number of job inquiries from more experienced animators and other artists.

What strategies have you had to take for the short term? Long term? In terms of personnel? Investment?
We are expanding in certain areas and showing more restraint in others — adding new animators, producers and new technology. On the one hand, we are generally trying to be as fiscally conservative as possible, but at the same time we have been investing into new technology to create products that may be more relevant in this current economic climate. In the near term, we are refocusing our sales efforts to address an increased interest in Flash animation for the web, as well as other non-traditional media such as CG,  which provides an additional dimension of flexibility. For the mid term and long term, we are re-vamping our Shorts program to be able to release new material more often, and in a more strategically targeted way that will be more effective as a sales tool. We put a lot of emphasis on cross-training our full-time staff in all the various tools of the trade, and we rely heavily on a network of local (and not-so-local) freelance talent. These strategies have  allowed us to remain very flexible and effective.

Have you redirected your business to other areas that you were not focused on before?
We have greatly expanded our capabilities for Flash-style animation for the web and mobile platforms. Whether or not it is because of the economy, many companies are looking away from traditional media  and more toward the internet, which also lends itself to more economical styles of animation. In addition to web animation, we  have been receiving a lot of interest in 3D computer animation and we are investing heavily into our CG department. Calabash has the advantage of being able to apply our many years of traditional experience to these new media, whereas many Flash-only animation companies may have the technical skills but lack the artistry.

The danger for us is that with a higher volume of smaller projects, the overhead is greater and the profit margins are smaller.

Are you cutting your rates?
We are not cutting our rates per se, but we often find that we can offer cost-saving alternatives to clients without sacrificing too much of the original concept.

How will you survive a prolonged recession?
We will do our best to stay flexible, keep our eyes open for new opportunities, adapt as necessary, and roll with the punches.

Ray Carballada, Shooters Post & Transfer/DIVE

post production facility

What has the state of the economy meant to your business?
We have seen things slow down a little in some areas from the crazy pace of the last few years. Shooters’ diversification in advertising, producing television programming and films has helped. We are also working with more clients who want to benefit from the resources and talent of our diversification.

What strategies have you had to take for the short term? Long term? In terms of personnel? Investment?

Short-term we are holding off adding the staff we had budgeted for 2009 and using freelancers as needed. We are still investing in technology and equipment. Long Term we feel very confident in Shooters’ business module. We expect that the industry we are in will continue to mature. We don’t expect things return to the past as far as pricing, deadlines and workflows.

Have you redirected your business to other areas that you were not focused on before?
We redirected our business into developing television programming and starting a film division several years ago because we knew that the ad business was changing. The reasons for diversifying then are serving us well now.

Are you cutting your rates?
We have a different, more efficient business model than most so we haven’t seen a lot of pressure on our pricing.

How will you survive a prolonged recession?
We are pursuing additional marketing opportunities and finessing our sales strategies to address the current economy. Ultimately, our business strategy has served us well to compete and weather this current economic storm. We are also partnering with our clients to help them survive as well as seizing the opportunities to create new relationships.

Mona Kanin, Framepool
regional director, NYC

stock footage

What has the state of the economy meant to your business?

To state the obvious, the economic crisis is forcing creative professionals to look at budgets closely. Licensing stock footage helps reduce production time and costs. So, the crisis is an opportunity for the entire stock industry.

Because Framepool offers many advantages, we’re in the perfect position to profit from this opportunity. Of course, we’d love to elaborate on these advantages: we offer amazing breadth and depth, we curate our collection with an eye on high production values, interesting content, beautiful or edgy composition; we offer quick, often immediate downloads-plus creative inspiration and intelligent and polite customer service.

What strategies have you had to take for the short term? In terms of personnel? investment?
Though we’re very established in Europe, in the US, we’re still in start0up mode. Six months ago, we incorporated here and we now have offices in New York, Chicago, L.A. and Miami. This year we plan to intensify our engagement and visibility in the US market. Our short term strategy is to reach out to clients who need our help now because their production budgets have been cut. Our long term strategy is to continue to be highly professional. We’re unique because many of us come from production backgrounds so we understand the production process.

Have you redirected your business?
We haven’t changed direction because of the economy. We think we’re very well positioned to meet the current and future needs of the business. Framepool was one of the first companies to introduce a client friendly online archive. We like to stay ahead of new technologies and we’ve recently created beautiful roll-outs for a variety of digital applications.

Are you cutting rates?
The stock footage business is tremendously dynamic. The models are changing and as they do, we evaluate our own models. Sometimes that means a reduction in price.

How will you survive a prolonged recession?
We’ll thrive if we can help people understand that we are sympathetic to the film making process, that we understand production, and that we can help them produce amazing visual content and adhere to their production values while spending less money. To make that approach work seamlessly, they need to start with a collection like ours and plan their shooting around hard-to-afford sequences that they’ve found on our webshop (and of course, that they love).

Other issues that will affect your business during a recession?
This is more about politics than economics, but out of these hard times, just on the horizon, there’s a feeling that people will stop producing under the umbrella of what’s safe or gratuitous, and creativity will well up in more various and wonderful forms. Creativity thrives and is refocused by constraint. In very economically focused times, people will express their creative desires and look for meaningful distractions. We can help realize these desires.

Josh Sahley, Monkeyhead

founder/creative director

motion design

What has the state of the economy meant to your business?
Fortunately our industry is one of the few that seem to maintain fairly well during hard economic times. Though that’s not to say I haven’t seen it affect companies in our industry. I’ve seen numerous editorial/FX companies go under because of the recession recently, but compared to other fields, ours is one of the safest.

Regardless, we try to stay positive and not let fear guide our decisions. We just try to be more aware now. We were growing before this and we’ll continue to grow, it just may take a little more hard work but that’s something we’ve never shied away from.

What strategies have you had to take for the short term? Long term? In terms of personnel? Investment?
Well, we’ve always tried to stay as lean and mean as possible as far as staff goes, even before this downturn, so we’re just maintaining the same principles. As for strategy, it’s simple: Keep our current clients happy while continuing to expand our client roster in different fields to open up opportunities. You don’t want to be one of the companies that relies solely on one type of work, like the automotive or banking industry, and then find yourself with your only client going out of business. That’s a recipe for disaster if the chips fall the wrong way. I feel the more diverse we become, the better chances of not feeling the effects of this recession.

Have you redirected your business to other areas that you were not focused on before?
Not one area in particular but a wider range in general. Some companies like specializing in one type of look but we’ve always felt diversity in work and style will keep it fresh, while making our business more secure.

Are you cutting your rates?
No, we’re not cutting our rates. I know some companies are scrambling with fear and lowering their rates but honestly nothing has changed for us. We offer top-notch work and go above and beyond what our clients ask for every time. To elevate everything that much costs good money on all fronts. Our only real plan is to keep pushing our work and limits. Besides, when people are broke they watch more TV, not less, while some of the advertisers will slow down, broadcast work will continue to thrive. I feel typical economic rules don’t apply to us as much as other fields. It just depends on your field of work it seems. For instance, people in gold are making more money than ever right now, not less. While people in jobs like construction are lining up for any possible work they can get.

How will you survive a prolonged recession?
I know we’ll be fine. If we stay focused, keep delivering innovative work and continue to broaden our base, we’ll go nowhere but up. We’ve always felt strongly in this simple philosophy and we have no reason to doubt that approach now. We’ll leave the worrying to everyone else.

Camille Taylor


multimedia and content creation

What has the state of the economy meant to your business?
There is no business as usual. The percent of billing that we are down for 2008 has forced us to cut overhead, rethink and revamp all expenditures, and continue to work on how we can bill more while keeping costs down. With no end in sight for this economic downturn, everything we are doing is for the long term. We have joined forces with other companies and executive producers who have come to us with directors thus further amortizing the basic costs of doing business. We have been acting as a service company for long format work in television and in feature film as well as servicing foreign productions. Cutting rates further on regular jobs is not a long term survival option, although making bulk contract deals with either agencies or clients for a guaranteed amount of work does allow us to offer certain price breaks. We continue to work on TV promos, TV programming, music videos, feature film production, design, and editorial as well. This diverse profile is certainly helpful. More than ever continuing to look at advertising globally is key to remaining healthy and successful. As all aspects of the entertainment business tighten their belts and lose frills and perks, so must we. Every company needs to walk the tightrope of maintaining repeat business and high client service standards while spending less money.

Luis Ribeiro
VP Business Development
Company 3

color correction

What has the state of the economy meant to your business?
Company 3 kept a solid business base in 2008 and by continuing to offer the highest level of artistry, the most technologically advanced equipment, and the most efficient workflows, we hope to have a prolific 2009.

What strategies have you had to take for the short term? Long term? In terms of personnel? Investment?
We’ve diversified our services offerings with digital solutions and global reach, which is both a short- and long-term strategy. We’ve created a Digital Camera Capture department to cater to all clients shooting on Phantom, P2, Red and other digital cameras. Company 3 also opened satellite offices in London, Paris and Tokyo and several US cities, so our clients can view and collaborate on color correction/grading sessions remotely — and they’ll see the same thing their colorist in NY or LA is looking at.

In terms of personnel, we recently hired people for some key positions in both creative and production fields. In LA we have added Matt Turner from Framestore UK, Siggy Ferstl and Rhubie Jovanov from Riot and Jeremy Sawyer from The Syndicate.

Have you redirected your business to other areas that you were not focused on before?
Yes. We have always been about talent. Now we’re about talent and emerging technology.

Are you cutting your rates?
No. But we have a history of working with our clients’ budgets whenever possible.

How will you survive a prolonged recession?
By providing the best talent and artistry in the business, and through conservative, smart spending and investing. Keeping our ears and eyes open for all new opportunities and most importantly, have faith. After all, if you can explain everything, what is left to believe, right?

Sila Soyer
executive producer
Outside, NY

editorial, design and color

What has the state of the economy meant to your business?

So far we’ve been fortunate and have been very busy. We’ll see what the rest of this year brings. I think if anything’s changed, it’s been more the messaging in the ads than anything else and maybe a different (budget-conscious) approach to the creative.

What strategies have you had to take for the short term? Long term? In terms of personnel? Investment?

At the moment, we’re just keeping an eye on things. I’m sure we’ll probably have to look at being conservative in some areas, but never at the risk of compromising our projects, client service, and creative & technical capabilities. That just never pays off.

Have you redirected your business to other areas that you were not focused on before?

We’re always evolving our business based on what our clients needs are and will continue to do so as their needs change. In addition to editorial, we currently offer graphics, color, and finishing services with a group of extremely talented artists on our roster and can bundle these services, helping client’s cut costs.

Are you cutting your rates?
No, but we are making efforts to work with our clients’ budgets where needed. Cutting costs by bundling graphics, color & finishing, in additional to editorial, seems to be something they’re responding to these days.

How will you survive a prolonged recession?

I think it’ll be a bumpy ride for everyone, but I like to think positively that if we keep a close eye on our clients’ needs (both creative, technical and budgetary), we’ll come out of it ok.

Dan LaCivita
senior VP/executive director
Firstborn Multimedia

digital creative agency with Web design, live action, graphics

What has the state of the economy meant to your business?
We felt the economy last year though it was our best year financially. We’re probably going to feel it a little more in the first quarter this year, with clients being more judicious in where they are spending money. We’re getting a lot of opportunities that we normally would not have gotten if the economy wasn’t bad.

We’re getting a lot of larger brands that are looking at how they are spending their money and coming to us. We are a 45-person shop and are not a 300-person agency, but I think clients are realizing that you don’t need a team of 35 people to develop a great digital strategy and execute it. So in some ways we’re getting a lot more opportunities that we may not have got if people weren’t looking at their numbers very closely.

What strategies have you had to take for the short term? Personnel? Investment?
One of the things, and this was born out of necessity rather than the economy, is that the fact that we’re able to produce video, 3D graphics and Web development. Before a client may go to an ad agency, the agency will hire a production house and director to come up with a video campaign, a 3D house to do the graphics and a Web house to do the Flash work. We’re able to do all that, which really does increase efficiency and thus brings done costs a lot. Every time you outsource to another vendor you are going to pay their markup. Not only will it bring the budget lower, it’s also going to be a tighter deliverable. Our web team and our video team are working right next to each other so we’re working on a whole campaign together rather than working on each separate piece.

Have you redirected your business?
In the last three years we’ve bolstered our live action, 3D motion graphics and our software engineering teams, so we’ll not only be building great looking front-end Web experiences but also creating real software applications.

Ironically we’re hiring more people, we’ve signed a lease for another 6,000 square feet and we’re not cutting our rates. We’ve been fortunate to be in a position to be able to do that. It is amazing that the resumes we see, these are not some mid-level guys we’re seeing that are out of work. These are professionals that have been working for a long time.

Are you cutting rates?
We’re not cutting our rates and we’re not paying our employees any less, but there is a correction in the scale of salary happening now and it will probably continue to happen over the next year. Two years ago when the economy was awesome you had guys who probably should have been making $60,000 a year making $90,000. A lot of those guys probably don’t have jobs right now and their next job isn’t going to be making $90,000.

How will you survive a prolonged recession?
Cross our fingers.

Steve Pitts
Counterpoint Systems

consultants/rights management

What has the state of the economy meant to your business?

Like everyone, we have to work harder for every sale. Our media customers have scaled back procurement, particularly among our larger customers. Projects that have started are continuing but projects that haven’t started are, in some instances, being delayed.

What strategies have you had to take for the short-term and long-term with regard to personnel and investment?
We have made some cutbacks and only core projects are moving forward. We’ve become more lean and mean.

Have you redirected resources?
We operate in the music, film and television, and consumer products arenas. As movie studios have begun ramping back, we have focused our sales efforts more on our licensing business. In that area the economy is helping us as we have a solution that is very cost effective—and that’s what companies are looking for today.

Are you cutting rates?
No, but we are looking for ways to deliver more value to our customers—such as repackaging smaller product solutions at lower prices. Value is the differentiator on deals now.

How long will you survive a prolonged recession?
We’ve been in business for over 21 years and survived recessions before. We are optimistic about the future in the long-term, both for Counterpoint Systems and the industries we serve as a whole.

What article on the economy would be complete with at least one prediction on when it will all end?

"I hate to be a naysayer but I think good advice for anyone running a small business today is planning on 12- to 18-months of lean times. Make sure you are geared to hunker down for that and if it turns out to be less then be grateful," advises Hayhurst. Despite this somewhat gloomy prediction, Hayhurst notes there are always opportunities in any situation. "People think of a recession as bad news but you have to think of it as ways to win new customers and gain market share. When things turn around you will be in a great position to grow, and possibly grow faster than you would have otherwise."