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Re: Desktop (R)evolution

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Tim KolbRe: Desktop (R)evolution
by on Nov 2, 2001 at 8:31:37 pm

Couldn't agree more with your observation, Haze. We tend toward the corporate market and my comments tend to start from there.

It's exactly the reason that even though Avid's new discounts seem like too little too late to those people who have already gone FCP or P6, The part of the market whose clients demand that brand name will still find the new pricing inviting.

The other factor I find doesn't get considered very much in these discussions, at least as it applies to financial success, is that the biggest expense in any of our operations is still labor. Even if you're running a MC 9000 or DS, when you ammortize it over 5 years (or even less), the bigger expense will still be the person instead of the machine. If you really consider this, a cheaper machine shouldn't really affect the rates charged as much as many people think it will. The expense of a good editor will largely remain the same.

I think what's happening in some cases is that a professional editor gets a cheaper system like FCP or whatever and uses it at home to do side work for much less than their day employer may charge. This appears to be great for the editor because they pay most of their bills from their day job and their health benefits come to them highly discounted, so the money they take in from side work is pretty much discretionary. When some of these folks start talking about being able to compete with the big systems for the heavily discounted rate they charge, they don't take into account the costs of a full-blown business which they would have to become to really make a fair comparison. Commercial space, multiple phone lines, employment taxes, insurance premiums, support staff, office supplies, utilities, sales commissions, the list of expenses that have nothing to do with production equipment goes on and on. If many of these people who don't take these ancillary issues into account actually had to support themselves from their home systems, they would find themselves charging a far more similar rate to the more established firms to make ends meet.

Good discussion.


-Tim Kolb


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