Diversification Key to Post Biz Model
by Steve Harvey

LOS ANGELES-In these uncertain economic times, with a roller-coaster stock market and the seemingly constant threat of terrorism, fiscal responsibility has perhaps never been more important for business owners. Still stinging from the voice actors strike two years ago and the threat of a screen actors walkout last year, post-production houses are being especially cautious with expansion plans, according to John Storyk, principal architect at the Walters-Storyk Design Group.

"I'm seeing projects that just seem to have alternate business agendas." Storyk explains. "I didn't really think anything of it until I realized I was seeing every other project had this weird model to it. The 'if we build it, they will come' projects are fewer and further between."

Storyk says that from his perspective, at least, the business is changing, and facility owners appear to be following alternative business models from their predecessors. "We're in the middle of designing a studio in the Philadelphia area," Storyk reports. "At first glance, it's a studio, mostly post production, with lots of advertising music, and they do some radio drama. But they're also in the CD pressing, cassette-mastering business."

Diversification seems to be the key. Not only does that offer business owners a safety net in the event of a slowdown in one segment but, as Storyk notes, there can be a synergy between business units. Storyk offers another example: Engine Room in New York houses rehearsal and production room rental space as well as custom CD pressing and mastering. "They're each feeding off each other, but they're also working independently."

Peter Maurer, co-founder of studio bau:ton, sees it differently. "There has never been anybody that just went out and built a post-production facility and just waited to see what will happen," he avers. "But it is not a typical postproduction operator anymore that starts a post-production facility. I see individuals with relationships with a key engineer, and they are building a business model around these key people. In New York, that was a lot more common model in the post-production business, especially the jingle business, and I see that starting to happen on the West Coast."

Fiscal responsibility certainly plays its part, says Maurer. "Large facilities like POP, Margarita Mix, 525 Post and Post Logic have all become fiscally more responsible because their business went down. Jingle houses have been affected a lot more than film post-production houses. It's a natural thing, when the economy goes down and bookings go down, you become a lot more careful. You use some technology for a couple more years instead of jumping onto the next new thing."

Fiscal responsibility certainly plays its part, says Maurer. "Large facilities like POP, Margarita Mix, 525 Post and Post Logic have all become fiscally more responsible because their business went down. Jingle houses have been affected a lot more than film post-production houses. It's a natural thing, when the economy goes down and bookings go down, you become a lot more careful. You use some technology for a couple more years instead of jumping onto the next new thing."

If there is a trend, says Schrag, it is in the evolution of the mega-churches over the last 10 years. "We've recently encountered a number of religious organizations that have significantly expanded their in-house capabilities, whether by means of recording studios, TV studios, or both. That may be tied to distribution of their own material, it may be tied to production of praise and worship content, but they are doing it in-house rather than spending it on facilities elsewhere."