Outside broadcasters are weathering a tough period as rates are squeezed and competition for ad-hoc non-contract business is fierce, writes Adrian Pennington. However the eight-week period up to and including the 2012 London Olympics is likely to see trucks, crew and equipment at a premium.
“Competition is aggressive,” admitted CTV general manager Adam Berger. “Generally everybody has the same sort of facilities – you can walk into any OB truck and the equipment from sound mixers to monitors will be the same. The truck layout may be different but contract wins come down to the personnel and to price. From what I’ve seen the cheapest wins.”
There’s still a massive demand for OBs, with more being done than ever before thanks to the proliferation of additional added-value channels, 3D and IP streaming. However profit margins are extremely thin on many jobs.
“Clients typically expect to try and renew contracts on a like-for-like basis for a lower fee,” said Arena MD, Richard Yeowart. “With the OB operator having to increase staff wages and general overheads costs rising, there will at some point have to be a hardening of prices.”
Yeowart said he needs 180 cameras, plus accessories like EVS machines, to prepare for the Olympics and the Paralympics that follows and has doubled the firm’s inventory this year (pictured are Arena TV’s cameras setting up for coverage of Aviva Premiership rugby for ESPN at Twickenham).
“It won’t be possible to hire that much equipment over that period, and in any case it would be expensive to do so, so we’re gradually increasing our ownership of kit ahead of time,” he said.
At Alfacam, CEO Gabriel Fehervari has seen some clients suffer from the financial crisis and as a result sees them putting extra pressure on vendors to push down rates.
“In some respect the value of OB is the same as it was 15 -20 years ago,” he said. “An ENG team and equipment 25 years ago was €750 a day and now maybe it is €8-900. That doesn’t account for 30-50% higher salaries so all the pressure is on costing down the equipment. Thanks to HD we could raise our prices a bit 8-9 years ago, but now 98% of our work is HD much of the work is the same or lower than SD prices.”
Sixty per cent of CTV’s business is for the European Tour Golf and UK cricket. “It’s the remaining 40% of ad-hoc business that has to walk in through the door and that is the chunk which is very competitive,” said Barry Johnstone, MD of CTV and COO of CTV’s French parent Euromedia.
“It is very difficult to make a living in OB and harder still for new entrants to break into it because of the amount of capital expenditure involved”.
Ad-hoc work for CTV includes observational documentaries One Born Every Minute and The Hotel, the latter shot over a month in the English lake district using 56 hot heads, gallery controlled and mixed on location by Dragonfly Film and Television and with Evolutions handling post.
“Just because you have contract work doesn’t mean you can rest on your laurels,” added Steve Jenkins, MD, NEP Visions. “You have to invest over the three to five year contract period so that when it comes up for renewal your facilities are in top shape to regain the business. Those companies that don’t have volume and long term contracts must be concerned for the future. You have to have volume to make investment.”
That said, Jenkins agrees that it’s his engineering staff not equipment that wins tenders.
“The file sharing and signal complexity of modern OB workflows means you need a few wizards to pilot it,” he said. “Part of the frustration is that while budgets are crushed it’s hard to put money back into the business to train and bring on the next generation of engineers.”
Unlike Arena, SIS Live and Alfacam, Visions is not part of Olympic Broadcast Services (OBS) host plans for the 2012 Games. Nonetheless the company intends to maximize opportunities around the Olympics having signed a deal with a major US broadcaster, thought to be NBC.
There are a number of music and other ad-hoc events in the run-up to the Games, which are likely to dilute the market and hike rates up.
www.alfacam.com
www.arena-tv.com
www.ctvob.co.uk
www.visions-ob.com
