Commercial Post Production: Strengths, Weaknesses, Opportunities, Threats - Swot's Up? - Brief Article - Industry Overview

Post, March, 2002

CHRIS BYRNES

As the economy is still reeling from the dot.com crash, a languid stock market, the unending repercussions of Sept I I and now corporations like Enron and Kmart going under, advertising dollars have been significantly reduced across the board. For post production houses specializing in commercials, this is a tenuous time and most companies are hoping to simply survive until the economy rebounds. Yet while times are tough, Chris Byrnes, president of Charlex in NewYork, says that commercial post houses are used to persevering through difficulties, adapting to an ever-changing marketplace and thriving in an extremely competitive environment

STRENGTHS: Advertising is not going away, so it's still a very good business to be in. Generally the timeline of a project is that they spend a decent amount of time going through the creative process and the approval process. So by the time they get to actually doing a commercial, they're almost late already. There's not a lot of time. So if you can respond quickly to the needs of the agencies you stand to do very well.

WEAKNESSES: This is a difficult time to conduct business. Doing commercials, we rely on the ad agencies and it's been a difficult time for the agencies. But, it has always been a difficult business so, we don't really feel that this is different. You can not relax. You need to carry a group of experts. When business slows down, if it does, you're bottom line doesn't change. Some companies like to have a lot of freelance help and bring them in as needed on a project basis. We don't want to do that We want to have people who understand our clients, so we have a rather large number here -- almost 70 people in-house. We can't just handle one job, we need to handle many jobs to be profitable, so we have three to five teams of professionals that we can put together to work on different projects. One of the potential weaknesses is you have to be able to handle big, complicated jobs -- you need technicians, strong engineering, strong Flame operators, strong editors and strong designers. To be in Manhattan and carry t hat sort of staff is a potential weakness because your bottom line doesn't change and your job activity may.

OPPORTUNITIES: If you survive, you can become an agency partner in a way. When your company has matured, the agencies know they can rely on you. Very often the agency calls you and says "Look, this has got to be greaf and it's got to be done on Wednesday." If you can survive those tests time after time then you become like an extension of the agency and a real creative partner.

THREATS: I really don't see the commercial business being threatened. There is the possibility of work going online or ad dollars shifting to the Internet -- that's a real possibility. Some big agencies spent less on the Super Bowl this year and focused on online advertising. If you are not equipped to handle that sort of business, eventually that will be a threat When online advertising is a reality and becomes mainstream in a better way where they can quantify it, and if they find it's a better way to advertise, then you'll want to be in that business. So if the medium changes that will be a threat, but I don't see that happening anytime soon.

TIPS: The main message is that this is not a casual business. It's not a 9 to 5 business. This is a business that you need to dedicate yourself to and in a lot of ways you're on call. You don't know when the phone is going to ring. There are times when the phone is ringing off the hook, boards are coming in and you need to be able to respond. In a lot of ways you have to have deep pockets to be able to keep the crew around. The main thing is not to spread yourself out too much. If you start opening companies in other markets then you're diluting your brand and your expertise. Opening up in LA takes away from your business in NewYork and it can start to unravel from there. The thing is to stay focused on what you do best.