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Fast and cheap business plan

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David Roth Weiss
Re: Fast and cheap business plan
on Dec 11, 2009 at 1:40:51 am

Lots of work with very little pay makes for a bad business model for most, most of the time. If you already happen to be a stringer for broadcast news, maybe this model makes sense, but it seems like a sure ticket to the poor farm to me.

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY ™


A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, Indie Film & Documentary, and Film History & Appreciations forums.


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Mike Cohen
Re: Fast and cheap business plan
on Dec 11, 2009 at 2:56:37 am

Unfortunately there seem to be thousands of kids with video cameras willing to work for very little money, because it is better than making no money. But if Demand is spending $17million to make $200million, maybe it should pay a bit more for its content.
Or not.

Maybe they will read this thread.

Mike


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Arnie Schlissel
Re: Fast and cheap business plan
on Dec 11, 2009 at 5:36:38 am

What's the point? This videographer busts his ass to make haff-assed throw away videos that he barely breaks even on? He'd be better off staying home playing computer games and drinking beer. OK, he'd really be better off working on his reel and looking for a better gig.

[Mike Cohen] "Unfortunately there seem to be thousands of kids with video cameras willing to work for very little money, because it is better than making no money."

Let them. I'm not so sure, though, that it's better than making no money. They could be shooting a personal project that would make them better film makers in the long run. They could be working as stringers for the local news outlet. They could be shooting weddings.

Nobody wins in a race to the bottom, except maybe the person who sponsors the race. First one to the bottom gets the least for working the hardest. It's a no-win game that we'd all be better off not playing.

Arnie

Post production is not an afterthought!
http://www.arniepix.com/


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David Roth Weiss
Re: Fast and cheap business plan
on Dec 11, 2009 at 5:46:26 pm

[Arnie Schlissel] "Nobody wins in a race to the bottom, except maybe the person who sponsors the race. First one to the bottom gets the least for working the hardest. It's a no-win game that we'd all be better off not playing. "

Arnie,

You should write that epic now, your words are really on target these days. I'm giving you another unofficial moo of the year award for the best single paragraph of 2009.



David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY ™


A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, Indie Film & Documentary, and Film History & Appreciations forums.


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Ryan Mast
Re: Fast and cheap business plan
on Dec 11, 2009 at 5:40:40 am

Online content is not worth very much. This may be a truism, but Rosenblatt has the hard, mathematical proof. It’s right there in black and white, in the Demand Media database — the lifetime value of every story, algorithmically derived, and very, very small. Most media companies are trying hard to increase those numbers, to boost the value of their online content until it matches the amount of money it costs to produce. But Rosenblatt thinks they have it exactly backward. Instead of trying to raise the market value of online content to match the cost of producing it — perhaps an impossible proposition — the secret is to cut costs until they match the market value.

I don't think it's even up for debate. For this kind of content, sinking money into production isn't worth it right now -- the market won't sustain it.

Do you think there's value in professionally-produced online content? How do you sell that to your clients, considering competition like this? Or is this an area where pros can't be competitive?


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Todd Terry
Re: Fast and cheap business plan
on Dec 11, 2009 at 6:11:54 pm

Disgusting. Talk about a sweatshop.

It's almost the video equivalent of children in India making soccer balls for 5¢ an hour. Ok, not nearly as tragic as that, but sad nonetheless.

And apparently out of the $200 that Christian Muñoz-Donoso will make for producing ten videos in a day... he's also having to pay an assistant.

I couldn't read past page two, corporate greed is too nauseating. I come from a mindset where you regard people as your most valuable resource. I'm our company's Creative Director... but I'm also the president and principal shareholder. Usually I'm the corporation's highest-paid employee... but not always. Some months I'm the least-paid. Everyone else gets it first. I may not be a good businessman (fortunately my junior partner is), but I'd rather be a good person.

Slave-masters get no respect from me.


T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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cowcowcowcowcow
Brendan Coots
Re: Fast and cheap business plan
on Dec 11, 2009 at 9:09:34 pm

I think it can be looked at another way, and there IS an upside to all of this.

First of all, we saw this coming - it's a logical consequence and benefit of the low-cost video revolution which has taken place over the past 10 years. It's how we handle the paradigm shift that matters. One thing that should be clear - none of us can or will survive simply because we offer video/multimedia production. It's no longer a black art, and that's just the way it is. Survival will require more than offering "quality" services, as well. As the budget revolution rolls on, full HD production quality will be a given within a few years, and will serve as the great equalizer among shops and freelancers alike. Adding to this, we're seeing a lot of high quality, extremely creative and insightful work coming from younger and less experienced folks every day. Some of the smartest creative I've seen in years is coming from people with just a few years of experience. We're lying to ourselves if we think our experience gives us some inherent advantage in creativity or quality. In fact, our experience really only benefits us when those hard lessons and insights are directly applied to our business model and approach. This, in my opinion, is the arena in which the survivors will be decided.

I think the only way to stay on top of this game is to specialize, offer something unique and think beyond the traditional offerings we've all leaned on for so long. It requires a fundamental rewrite of the standard production company model, and it requires that we all start being better, more tactical, more engaged businesspeople.

The company in that article has found a very unique way to capitalize on the reality of where video production currently stands, rather than where we wish it was. While it may offend us to see what they're paying people and their sausage factory approach, bear in mind that they aren't hiring people like us, and their product doesn't rely on quality to be effective. They are hiring people who are fresh out of school or otherwise cannot find work, which is a GOOD THING. While it sounds pompous, you could liken them to McDonald's, while traditional quality-focused studios are Ruth's Chris. Does the latter fret over the practices of the former, or vice versa? Not one bit - they are different models, serving totally different customers and their employees represent two ends of the spectrum. There are so many new artists coming into the industry every day that we can't hope to absorb them all, especially since many of them will require years of additional training before they can perform at the quality level you or I expect. Working for a company like the one in the article could serve as an excellent boot camp for those people, get them some experience and, most important of all, provide them with some much-needed perspective. More and more "green" artists are popping onto the scene with a horrific entitlement attitude, and having to start their career in video-mills may very well provide that much needed perspective that will make them more deserving, appreciative and effective artists.
Of much more significance, their business model perfectly captures a previously unaddressed market need (topically broad, video-based training that is free to the viewer) using a unique and clever model while perfectly harnessing the low-cost revolution. They are embracing the realities of modern video production and they are going to make a lot of money as a result.

While we don't have to race to the bottom, or even embrace low-cost video at all, we DO have to accept that new models are required to stay profitable and that the "video production company" is DEAD. Survival will almost certainly require adopting more complex, targeted and clever business models.

Brendan Coots

Splitvision Digital

http://www.splitvisiondigital.com


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Richard Herd
Re: Fast and cheap business plan
on Dec 11, 2009 at 9:35:49 pm

[Brendan Coots] "There are so many new artists coming into the industry every day that we can't hope to absorb them all"

No way around it: a surplus in supply (of employees) creates downward pressure on wages.

For those of you who have been in business for a long time, I also hope you consider adding "marketing analysis" to your rate card.


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cowcowcowcowcow
Mark Suszko
Re: Fast and cheap business plan
on Dec 11, 2009 at 10:13:23 pm

A friend of mine worked for a time in the salt mines of an editing/production company specializing in car spots for used car dealers and such. The daily volume of work he had to churn out of his edit bay, at a brutal pace, helped him build his compositing skills quickly, and develop a fast and efficient approach to workflow, out of sheer self-defense, but the human toll in hours and stress was just not sustainable. And while it made him efficient, it was also unrewarding creatively. The spots were all made to a formula, and experimenting to go outside the bounds of the formula was not rewarded, in fact, it was usually punished, because it reduced billable thruput. The production house had tremendous turnover, but didn't care; where post houses traditionally try to find and retain key editing talent and market it as part of their branding, this place had totally commoditized the work, and would have been just as happy with one editor as another, long as the work got done and the pay was low. At their rates, that's what they did get.

Such places may be good for paying your dues on an accelerated schedule, but they don't pay the bills very well.

My take on things is that I have to also get some of my Maslovian Hierarchy fed by the work, be fulfilled, or the job becomes joyless and if that becomes the case, might as well go flip burgers for the same money instead, a job I can forget about the minute I take off the apron and head out the door, and just do the video work as a home hobby where it's something I do for self-actualization instead of a check.

When I point out the price someone's put on an old nerdy collectible on ebay, my wife usually retorts that the insanely high price is only a real value if they can find someone crazy enough to pay it, otherwise the object has little intrinsic value. Like paper money not backed by any hard wealth, it is really only worth what two people negotiate it to be worth, if that. When I came across this thread, a reverse version of her saying sprang to my mind: that maybe these commoditizers are trying to get us to think and bill as if the work is only worth what they say it is worth, and not what we know it is worth...


My old boss always used to complain to me that I was trying to cook steaks in a hot dog stand; that our key was high volume output at acceptible quality, not low-volume output at high quality... I would always answer him that people know you can get a hotdog anywhere and you can make them at home, but they still dress up and go out someplace nice to eat a real good steak, cooked to order. If all our clients learned to make their own hotdogs (with the new cheaper desktop video tools) we would have no other cutomer base to survive on.

I still don't know which of us was ultimately right.

I do know I don't want to eat hot dogs every night, even those really good Chicago ones. But that's all these kids can afford, working for Demand Media.


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Ron Lindeboom
Re: Fast and cheap business plan
on Dec 11, 2009 at 10:53:43 pm

[Mark Suszko] "I do know I don't want to eat hot dogs every night, even those really good Chicago ones. But that's all these kids can afford, working for Demand Media."

Yeah, and they can only afford those really cheap chicken hot dogs in this case...and they are an insult to cheap yellow mustard.

;)

Ron Lindeboom


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Mark Suszko
Re: Fast and cheap business plan
on Dec 11, 2009 at 10:57:41 pm

If you put ketchup on it, I'm afraid all deals are off.


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Ron Lindeboom
Re: Fast and cheap business plan
on Dec 11, 2009 at 11:13:56 pm

[Mark Suszko] "If you put ketchup on it, I'm afraid all deals are off."

Ketchup is for kids -- oh, and for prime rib and lobster.

Just kidding, Nick. ;o)

Nah, hot dogs should be mustard, chopped onions, sauerkraut (sometimes), sweet pickle relish (other times), maybe jalapenos (hey, this is California, after all), -- but I always go for the cheap yellow mustard. I have never liked the brown stuff.

I know...sacrilege. Blame it on my Mom, she got me strung out on French's at an early age and it is a habit that has carried over a lifetime.

They asked me about this when I tried to move to Chicago and they forbade me to move there -- something about a city ordinance or something, they said.

Ron Lindeboom



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Brendan Coots
Re: Fast and cheap business plan
on Dec 11, 2009 at 11:26:56 pm

You make some great observations. I would only say that your boss had a point - as the business owner, he was presumably targeting lower dollar, higher volume work (which is a legitimate model) while you, being an artist with pride in your work, were trying to deliver higher quality work than his business model could sustain. It was a fundamental mismatch in needs - art vs. income - a mismatch that defines our entire industry. We are all prideful artists, so we accept lower pay and sloppy business practices in return for artistic satisfaction. On the other side, those who pursue business at the expense of the art are treated as greedy outsiders. Is either side right?

My studio has struggled over the past few years with this very issue. We can do very high quality work, and it's a matter of pride for us. The end result is that we inevitably give our clients way more than they pay for, just because we don't like doing work that reflects poorly on us. From a personal perspective it's more rewarding, but from a business perspective it's a slow atrophy that leads to death by a thousand cuts. The answer to this problem is simple. If you run a business, you have traded in your artist hat for that of business owner, and therefore have a duty to your employees and your personal finances to run the business well, whatever it requires, without crossing any ethical or moral lines. End of story.


Here's two quick points I would like to add:

- For as long as I can remember, the realm of video production has been limited to those with the biggest of budgets, maybe the top 30% of companies out there could afford it. Clearly, the lower-budget clients of the world represent a huge majority, a vast underserved market. Now that production is getting so cheap, it only makes sense that most new business, the wild west, is going to be centered around cheap, fast video catering to these once ignored markets. Even if you and I choose not to pursue that business, it's going to have a profound effect on us like it or not.

- Businesses, which by and large make up our entire customer base, live and die by return on investment. "Quality" means nothing to them unless there is a quantifiable, increased return on investment great enough to offset the risk of paying so much more for that quality. As consumers embrace user generated video, and the onslaught of video-mills lowers the bar, consumers will become desensitized and lower quality will become more and more acceptable in the marketing arena. Clearly, quality isn't going to be something we can hang our hats on much longer.


Brendan Coots

Splitvision Digital

http://www.splitvisiondigital.com


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Christopher Wright
Re: Fast and cheap business plan
on Dec 12, 2009 at 7:57:47 pm

Clearly, quality isn't going to be something we can hang our hats on much longer.

Yes I can certainly attest to that statement.
A client of mine shot two 15 second spots "on Spec" (read free)for a Casino,
using the Canon 5d, and the "management" loved them and ran them.
He then shot a more ambitious 30 second commercial, again receiving only 50 percent of his costs because he wanted to have a spot for his reel. The management also swooped in on this relatively free spot and ran it for awhile. They talked about doing a whole series of ads and my client then invested in his own 7D, and really went out on a limb with a full production crew and proceeded to shoot a Lexus promotion in conjunction with the Casino. It was a very classy, slick ad that looked like it was shot with a $200k budget. Although he was paid a little more for this spot, he still ended up eating 10K. (A great spot for his promo reel however!) Now "management" has gone back to the free local cable production ads which look like bad used car commercials for the Xmas run. They and their clientele really don't care about "production value." It does have something to do with ROI, but more importantly getting cheap or free commercials for most clients now.
It is also the downside to the internet age in many respects. Many people only listen to mp3s now, instead of hearing quality music through quality sound systems. HD acquisition is now at critical consumer mass and is now as ubiquitous as DV was before the HD "revolution." Pinnacle Ultimate Studio has just about all the tools FCP does now, and even comes with Magic Bullet Looks, etc. I always chuckle at the posts of people who are all worried about camera "chip size" and "ability to be able to read the blacks" etc. when their material is going to be viewed via iPhone or You Tube, (and in this case, Demand Media). I have even been amazed at the low quality film production I have seen in our "digital age." There are several exterior shots in "Jules and Julia" that look like they were shot on 16mm film and transferred to VHS before the final print was sent to the theaters. But if you are watching it on for free streaming on Netflix, who notices or cares? Blame the bean counters.

none of us can or will survive simply because we offer video/multimedia production.
We're lying to ourselves if we think our experience gives us some inherent advantage in creativity or quality
just do the video work as a home hobby where it's something I do for self-actualization instead of a check

There does come a time whether you call yourself an artist or you become a "cog in the corporate machine," which definitely values cheaper and cheaper labor for its bottom line. Do you really want to keep getting paid less and less to do work you no longer enjoy? In the "Demand Media" story the most telling element was the once proud videographer who cringed at the footage he was shooting and editing, and who "normally would have taken out the baby crying, the wind noise, taken more time for critical focus, etc." but didn't because there was "no time for that." He had to make his $20.00 for his clip via paypal!
The answer seems indeed in finding a small niche in the market, or do like Tim Wilson has done and just become a writer about media, or like Ron has done, create a site where people come and kvetch about the media, but charge advertisers for "clicks" (eyeballs). I have also seen Kevin McAuliffe cranking out a lot of Digital Juice "demos" lately, but it seems like the "Total Training, Lynda.com, VASST, Class on Demand, Peachpit online training" paradigm is become way overcrowded as well. I feel 2010 will be a very interesting year indeed for all of us in the digital production field. I wish us all well.

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David Roth Weiss
Re: Fast and cheap business plan
on Dec 12, 2009 at 8:06:47 pm

[Christopher Wright] "There does come a time whether you call yourself an artist or you become a "cog in the corporate machine," which definitely values cheaper and cheaper labor for its bottom line."

Christopher,

The real question we should ask clients is do they want "a cheap looking video," or do they really want "a video with a lower price," i.e. "a cheaper video."

You should check out a post I made earlier today on this very subject at: http://forums.creativecow.net/readpost/8/1066713

David Roth Weiss
Director/Editor/Colorist
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY ™


A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, Indie Film & Documentary, and Film History & Appreciations forums.


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Ron Lindeboom
Re: Fast and cheap business plan
on Dec 12, 2009 at 8:08:25 pm

And what part of this changed for that "client"? They are likely as big a grinder today as they were before.

The companies that I know that are "cost obsessed," always were. The ones that I know that were "quality conscious," may be more cautious than before, but they are not The New Grinders.

Sure, there are exceptions to this, but for the most part, the psychology of the various respective buyers and their place in the market "hierarchical strata" has not changed -- at least in my experience. The people that ground on others before, still are; while the ones who were respectful and aware of their image and professionalism, still are.

Yes, there is a greater caution and less "free floating monies" in the market, but human psychology isn't all that different today than we were years ago.

What is hurting -- at least for some -- is that there are now people like your friend that will work for nothing. When I began doing this a couple of decades ago, nobody worked for free. When pros that can create "$200,000 productions" will work for free, that opens a whole new can of worms.

Best regards,

Ron Lindeboom


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Rich Rubasch
Re: Fast and cheap business plan
on Dec 13, 2009 at 12:28:50 am

So, how about a business model that has the high-end top level experienced editors and designers at a higher rate, and a wing with young lower paid trainees who crank out the "on-demand" type videos for a much lower rate.

The production company makes its recommendation on which one suits a particular project, the client makes their decision and off they go. With the high end side they get assured quality and best case experience and artistry.

With the lower end they take a certain risk with the savings built in.

In either case they have the assurance of the production company that they trust that they are in good hands either way. Can a production company work both approaches into their rate structure?

Hmmmmm.

Rich Rubasch
Tilt Media Inc.
Video Production and Post
Owner/President/Editor/Designer/Animator


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Ron Lindeboom
Re: Fast and cheap business plan
on Dec 13, 2009 at 12:45:07 am

[Rich Rubasch] "So, how about a business model that has the high-end top level experienced editors and designers at a higher rate, and a wing with young lower paid trainees who crank out the "on-demand" type videos for a much lower rate."

As a grandpa, this reminds me of a story that the legendary Charles McConathy (founder of ProMax) told me years ago. It's a really good story, so go grab some milk and cookies kids and gather round...

Once upon a time when Charles McConathy and I were talking about what had destroyed Media 100 -- who the geezers here will remember once had more sales and a stronger market than did either Avid, Autodesk, or FCP -- Charles began to recite a story about growing up on a sheep ranch in Texas.

"You know, when I was a kid, Ron," said Charles, looking off in the distance as he recalled those long-gone days, "the ranch hands would all run off to town to the local brothels. But there was trouble because one was $20 and the other was $100."

He began to recall how that Media 100 destroyed themselves by "acting just like the $100 cathouse that wanted to compete against the upstart $20 cathouse that had opened up. The trouble is, by having $20 hookers in the joint, pretty soon everyone was a $20 hooker." Charles went into detail on how it happened but with children present, I'll leave it to your artistic imaginations.

He then correlated that in his opinion, just like the $100 cathouse, "Media 100 dropped the price on their crown jewels, which was their hardware card and the great picture it gave, to less than $2,000 including Adobe Premiere which they included, and which sold for about $500 at the time. When you deduct the $500, they admitted their card was worth $1500."

But they were selling their then-rather-featureless software along with their card for about $20,000 at the time. People freaked. "$18,500 for this software!$#@!?," they cried out incredulously and repeatedly.

In the end, Media 100's "$100 callgirl" had become about as valuable as Charles' recollection of $20 hookers.

There's a story in there somewhere.

I am sure you will all figure it out.

;o)

God bless you, Charles. I miss you.

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
- Antoine de Saint Exupéry






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Christopher Wright
Re: Fast and cheap business plan
on Dec 13, 2009 at 2:21:38 am

"The real question we should ask clients is do they want "a cheap looking video," or do they really want "a video with a lower price"

Until is is obvious that they don't even care. I was surprised myself to see this turnaround by Las Vegas ad money, people who should know better, right?

"When pros that can create "$200,000 productions" will work for free, that opens a whole new can of worms."

Exactly. And hasn't this actually been the case for several years now, especially when dealing with ad agencies?? More and more "creatives" are expected to put all the time and effort in conceptualizing, producing and editing a trial "campaign," and then the ad agency decides which creative they want to "bless" with their business, then it takes 6 months to a year to actually get your money out of them.

"The trouble is, by having $20 hookers in the joint, pretty soon everyone was a $20 hooker."

Not only was this a good story, but it segues perfectly into the story that started this thread. "The once proud videographer who was once proudly shooting scenes in a rainforest, and who is now grasping for a "$20.00 per clip" fee for his services. And I doubt that keeping the Media 100 high price tag would have saved it from an early death, just as I think that almost no one will pay 15K plus a 2k yearly "maintenance" fee for Smoke on the Mac, when they can pretty much do the same work on AE/FCP/Color if they take the time and make the effort. Hopefully the "$20.00 hooker" doesn't become prophetic, become as popular as the "grinder" euphemism, and quickly become next year's "elephant in the room." I really do believe we are indeed going to see a "New Level of Grinders" in the coming year.

Dual 2.5 G5, IO, Kona LH, IO, Medea Raid, UL4D, NVidia 6800, 4Gig RAM
Nehalem Octocore 12 GB Ram, Nvidia card, MBP, MXO, MXO2 mini, Windows Vista Adobe Studio CS4, Vegas 9.0, Lightwave 9.6, Sound Forge 9, Acid Pro 7, Continuum 6, Boris Red 4, Combustion 2008, Sapphire Effects


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Terence Curren
Re: Fast and cheap business plan
on Dec 13, 2009 at 8:21:12 am

[Brendan Coots] "none of us can or will survive simply because we offer video/multimedia production. It's no longer a black art, and that's just the way it is. Survival will require more than offering "quality" services, as well."


If you can't get down in cost to the level of the low talent guys, then you need to educate your customer base to appreciate the value of your quality added to the product. This is where we are failing as an industry now.


Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca


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