League Summit Preview: Truck Company CEOs talk future
By Carl Lindemann
The fast pace of change in the past decade has made the remote production industry anything but a smooth ride, as vendors overcame the financial and technical challenge of HD while battling in the marketplace for an ever-expanding list of sporting events that hit the TV tube.
The industry transformation marked by the migration from analog to digital to HD has been more than simply a swapping of technologies. For truck vendors, economic assumptions have changed as the cost of the new technologies has zoomed upwards. With new HD truck costs pressing as high as eight figures, the scale of the enterprise makes entry for new players problematic.
“Financing has become a huge issue,” says Scott West, president of Corplex. “The outlay is frightening, a major barrier to new people coming in. A smaller company can’t build a truck with the promise of business to come, borrowing money before revenues come in.”
Meanwhile, those with more abundant means are still left guessing about critical bottom-line business issues.
“One of the looming questions for us is how all this gets funded, and how a return on that investment comes back,” explains Lou Borrelli, NEP Broadcasting CEO. “We have to make large investments in equipment that was a must-have when we bought it and that may or may not be in demand by the end of a contract.”
Still, Game Creek Video President Pat Sullivan shares the sense that a period of relative calm has arrived. “The radical transformation we saw from 2002-2005 brought all major events on television into HD. Now, I think we’ll see more evolutionary rather than revolutionary change…we’ve weathered the worst of the storm and are continuing to build HD trucks or to convert our existing trucks to it,” he says.
Growing the HD Business
Fueling the excitement is the awareness that bet-the-business risks made to get in early with HD turned out to be winning ones. Market demand is growing faster than the availability of equipment, and the anxiety today is now simply a matter of trying to catch up with demand.
“From the initial plans to the final integration, there’s a nine-month turnaround time,” says Jack Walsh, Trio Video’s CEO. “But you can’t really wait for contracts because when they come, they want the truck in a month. So we need to anticipate out clients’ demand, piling on new debt ahead of work. That makes us and our bankers very nervous.”
At F&F Productions, construction of a third HD truck, the GTX 14, began on spec this past year to cover anticipated demand. But before it was even finished, the excess capacity was absorbed.
“Our first two HD trucks were sold out and this was to be our ‘float’ (to cover any shortfall). But CBS had a deal that fell through at the last minute,” says Connie Vizaro, F&F vice president, sales and operations. “Now, it is committed to football, basketball, and we’re back to the drawing boards to design GTX 15 to service entertainment and high-end sports.”
With demand outstripping capacity, vendors are caught between the desire to maximize profitability by increasing utilization and the need to maintain the highest levels of service for clients. Building in more flextime ensures adequate coverage with a margin of error for maintenance, but reduces utilization and profits. The happy solution is to maintain close relations with competitors who can become collaborators in a pinch. This serves both the clients and the vendor’s bottom line.
“During the peak of the football season, there’s lots of demand for HD trucks and it’s easy to run into sticky situations,” says Mike Werteen, New Century Productions VP of production and Marketing. “Successful vendors help clients out with their problems and that means spending lots of time working with competitors.”
Maintaining close contact with clients is even more crucial. In Canada, Dome Productions hearkens back to the era when the networks owned their own trucks. The vendor is actually a partnership owned by both CTV Specialty Television and Rogers Broadcasting, parent companies of The Sports Network and Rogers Sports Network.
“This allows savings on capital and takes care of their outsourced facilities requirement. It’s also brought profit to the business,” explains Mary Ellen Carlisle, Dome Production’s General Manager.
Elsewhere, the best relationship with clients is more like a strategic partner than a vendor.
“You need trust to have real dialog with clients to make this business model work for both them and us,” says NCP’s Werteen. “It’s in the client’s best interest to have us healthy. If they cut too good of a deal, if they squeeze too tight, we’ve all seen what happens.”
Dual Feeds – and Trailers?
As the HD market expands it is also breaking up into different segments. At the high end, the demand for ever-increasing sophistication has blown beyond the capacity of a single 53-foot trailer to contain the necessary equipment. For regional broadcasts, there is no budget to produce spectacles, but there is the demand for dual feeds. Carrying this out economically has been answered with different solutions. One engineering philosophy is to build side-by-side productions in the same trailer, typically for the home and away feeds.
“It’s expensive to use two HD trailers, so there’s a demand for a truck that can do an excellent job creating two different feeds with two different production areas, two audio areas and so forth,” says Phil Garvin, Mobile Television Group GM. “That’s what we specialize in.”
Garvin says when Mobile Television Group began that effort, the visitor feed was not substantially different from the home feed. “We’ve improved that significantly and within a couple of years will be able to produce a visitor feed as good or better than when it had its own truck,” he says.
For National Mobile Television, the answer to producing better visitor feeds on a budget is to opt for dual, downsized trailers.
“We have a different solution building small trucks that we call ‘Side-by-Side’ units or SBS Trucks,” says Mark Howorth, CEO of NMT. “The only reason to do this is cost. This lets the client save some money and gives the visitors their own production environment. Instead of getting two full telecasts, you’re creating one-and-a-third, and we price it that way.”
As the media market continues to fragment and expand with production for additional platforms like iPods and cellphones, this dual feed architecture might grow to customize content for a scattering of target audiences.
“The need to provide a number of different products out of the same event, different cuts of the show, different highlight packages, does factor into design and construction of facilities,” says NEP’s Borelli. “It leads to more multiple-trailer-type setups and compounds.”
Connecting with Manufacturers
The growth in the demand for HD production is expanding beyond headline events. As consumers buy more and more HDTV sets, the wide-screen, high-resolution format is on track to become the standard. But the economics of HD makes it problematic to serve a market with SD budgets. For vendors, solving this conundrum requires attention from broadcast equipment manufacturers.
“A year ago only the networks wanted HD,” says Craig Farrell, Alliance Productions general manager. “Now the market has gotten more spread out and even corporate clients want it.”
Alliance Productions, the strategic collaboration of 36 mobile production units, helps serve the mid-market for a second tier of HD trucks carrying just 8-10 cameras, not 20. But that has its own challenges.
“Unfortunately, there’s just top-tier HD equipment, then a big gap to the HDV gear,” says Farrell. “To deliver HD at the mid-market’s SD prices, we need the manufacturers t
o offer mid-level HD cameras for mobile production.”
F&F’s Vizaro says that manufacturers would do well to bring truck vendors into discussions alongside the broadcast end-users.
“We are under a great deal of pressure to seek out and research the latest technology and manufacturers can do better helping us with that,” she says. “It’s our job to stay on the front side of the tech curve, so it makes sense that we be invited in to participate in product development.”
While the mobile production business is about managing money and technology, the bottom line is client satisfaction. The greatest differentiator between vendors comes down to the quality of their people and their ability to provide exceptional service to the client.
“We have always stayed close to clients. It is our foundation,” says Frank Taylor, Mira Mobile Television’s general manager. “You must have two elements beyond technology to be successful. Over the years, we’ve often not had the latest and greatest. Instead, we’ve made it on reliability and the great teams we’ve put together.”