A Chicago Giant falls
Roscor laid off over a hundred people this week and has shut its doors pending some kind of reorganization. First Swiderski, now Roscor. Eek, all the Big Dogs are gone, who's left?
The new generation doesn't see any value in resellers. They'd rather build it themselves and then turn to forums, chat rooms and twitter for tech support and installation tips.
I still purchase just about everything from my VAR because they're worth a lot more than just the products they sell.
Walter Biscardi, Jr.
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By way of a eulogy for Roscor, they were a huge help to us, even more so after Swiderski died off. They offered great consulting services and a wealth of know-how as well as the rentals and lease/purchases we heavily relied upon. The article in Ruth Ratny's paper makes noises about retaining a core staff and re-organizing, but they will be losing hundreds of man-years' worth of experience no matter what.
Gary Adcock was saying (paraphrasing now) that the rental business took a big hit because the gear became affordable enough you could just own it. Also, Roscor was carrying a huge amount of debt on all their facilities and inventory(end paraphrase).
I wonder how VER is doing today? I think the new economic landscape may require you to either be really small and agile, or as huge as possible, to spread out the expenses over a gigantic client base. there is no middle anymore, the industry resmbles a donut more and more.
What's left in Chicago? Zacuto comes to mind. Video Replay was a smaller outfit and it's owner recently retired and sold off the company to his son. And I'm kinda stumped as to what else is left in town for broadcast rental, lease/purchase, and consulting engineering services. It's not like we can call Geek Squad, you know.
Seems some reorganization was in order for em a few years ago. Neglecting to evolvewith the times will always mean closing doors at some point.
Any house still operating by their 80's template is going to fold. It's really that simple.
I mean besides it costing more money, why would you not come up with the times. If you are working with a template that is over 20 years old your are going to hit some hardships.Things always need to be updated, becasue the world wants everything faster...and faster, becasue everyone is in a hurry!
To Your Success,
Dr. Len Schwartz
Pres/CEO of Pro2Pro Network
Thats just it. Because technology grows stronger while becoming cheaper, there is simply no reason to become acient then extinct. It's not neglecting to upgrade gear that makes these companies fold, it's their 2 decode old business model that only worked two decades ago.
Well, we don't know the whole score, seems like the big trouble was in their banking, not their tech. They were up to date on technology and had great service, a lot of knowledge you could tap. Their financials weren't working out. The article I read said they had a bridge loan ready to sign but it fell thru on Sunday night and they locked doors Monday, from what I can tell. If you're not from Chicago, it doesn't strike you quite as hard but Roscor was an institution for a long time, it was just as solid as the concrete under your feet. And then one day it is gone, poof.
Its getting harder and harder to find a great VAR. When newbies come here for advice most pros advise they get with a VAR for guidance and support. But these are getting more and more scarce. ProMax is a shadow of itself from Charles' day, for example. The trend seems to be towards box shops that are glad to sell you everything, but sketchy on support after the sale. More and more, you're left to find an expert consultant on your own, or rely on the kindness of strangers and friends on sites like the COW. I don't know, but it seems like we're stepping forward with the right foot and simultaneously stepping backwards with the other. And you can't dance for very long while doing that.
Both Walter and Grin are correct here.
With the rise of the internet, and the collective
desire to buy cheap coupled with the rise of the
box stores (think B&H)
there simply is no sustainably business model for lots of
sales oriented houses. It's not that they don't want to change or evolve There simply is no place or space for them to go.
Most of the products we use today are
manufactured overseas and there is very little value added
by the reseller. If you need a Panasonic camera, that's manufactured
overseas and is going to arrive at your place still boxed as it left
the factory, Just what value does any reseller add?
Most modern equipment with high density, dual sided, surface mount circuit boards can't be fixed except at a very sophisticated remanufacturing plant. (Ever try to replace a chip resistor
with a soldering iron) Most sales oriented operations have Salespersons who have very little experience using the product, thus the rise of all the user forums as mentioned by Walter.
All this plus the fact that our stuff is just getting plain cheap
doesn't bode well for VAR'S Just like Home Depot killed off
many lumber yards and hardware stores, It didn't matter what there
"Business Models" were, their days where numbered.
So in short there will be box houses (I bet most here buy from them)
and very high end (think Alexa ) sales organizations but the vast middle is getting hollowed out and no amount of business model tinkering is going to be able to save them.
[Neil Hurwitz] "Just what value does any reseller add?"
If you need to buy one camera, or set up one suite, or can hire Bob Zelin, then no, a reseller doesn't add much.
But Roscor specialized in things like schools, churches and independent TV stations -- multiple systems, often placed into facilities with no IT or other appropriately skilled staff. These customers want single sources for mics, monitors, edit systems, storage, cabling, so when something went wrong, they made one call, and it was taken care of. There, having a dealer is invaluable.
There's rarely one single reason a company goes under, but the perilous business model isn't on the sales/service side, or even rentals, but the equipment side of the industry that runs on credit.
Most of the time, this works out well enough, but those net 30 deals became net 90 years ago, and some deals go out 6 months or more. Cash flow has slowed to a trickle, and if one or two deals go belly up, then a whole supply chain collapses.
I don't have any knowledge of this personally, but in reading comments from Roscor employees elsewhere, they extended ONE YEAR terms to a TV station they were outfitting in Indonesia, and well, you can guess the rest.
I'm not meaning to comment on the specifics of Roscor, though, as much as to observe the market forces that keep companies like them around -- one stop shopping and service for small-to-medium non-specialist facilities, a business that's growing in many parts of the country -- and the forces that threaten companies like them, a global credit crunch that leaves everyone vulnerable.
The only specific observation that I'll make about Roscor is that the individual guys I dealt with in Chicago and Detroit when I was at Boris and Avid are aces, some of the nicest guys in the business. I hated hearing about this.
"If you need to buy one camera, or set up one suite, or can hire Bob Zelin, then no, a reseller doesn't add much.
But Roscor specialized in things like schools, churches and independent TV stations -- multiple systems, often placed into facilities with no IT or other appropriately skilled staff. These customers want single sources for mics, monitors, edit systems, storage, cabling, so when something went wrong, they made one call, and it was taken care of. There, having a dealer is invaluable."
I agree, But here is the rub: These same institutions you mention
PRICE CHECK everything on the internet, Just like you and I,
and then ask for the same discounted price. The result
is very little or no markup on equipment for the vendor.
No mark up means the organization can't support itself.
So in a way Roscor is evolving: to a straight systems integrator/service company. I hope they make it.
Years ago I was doing loads of work for USA/SCI-FI and they used to send over blank D3 tape by the pallet I would then "Basic"
it for them at the rate of 60.00 per hour. That type of work
in which an overnight shift would generate 3,600.00
(5 machines x 8 60's per shift) really helped support the shop
Now this didn't happen every night but about once a week.
I used to pay the tape op whose day job was as a starving PA/PM
200.00 bucks. As these things get leached away I don't see how
todays facilities can stay open and make enough money to keep
Times change and every business is under stress these days...production people are among those who have gone through some of the tightest times lately...
Many people had good luck with Roscor...it's a shame to see all those people lose their livelihoods. On the other hand, not all of us found doing business with them to be pleasant...
After a three hour drive for a system demo, they had double-scheduled us with another company by mistake and they treated myself and my colleague as if our sale really didn't matter. They were the only VAR for Media 100 systems in the region, so I bought exactly one Media 100 system from them and even the delivery was so incredibly botched that Data Translation heard from me repeatedly. After several months of just trying to just acquire the correct manuals, I have never bought anything from them since...and we're talking 1996.
The big customers are great, but if you drop the ball with enough little ones, each big sale becomes critical to survival...extending a year for terms on a large international transaction for instance.
While I'm sure that the closing/reorganizing of any business has a variety of factors...I had one of my own about ten years back...I think that it can be easy to forget to treat your smaller customers with respect, even after you have some larger ones. It's income in smaller increments, but the risk is also spread over a lot more transactions. One slow/no pay isn't fatal...and little customers can turn into big ones, happy or not.
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I remember when Paul Rosten loaned us a VO-1800 and a CVS Time Base Corrector in 1974 to record the first helical scan show ever produced on broadcast in Chicago, "TV Song". It was a video art program I did while an intern there funded by a grant I wrote to the Illinois Arts Council. We also produced "It's a Living" based on Studs Terkel's book "Working" with Studs as the main character. This was with Videopolis using the TBC. I'll always be grateful to Roscor. They were about the size of a small drugstore then. Sorry to hear the news.
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