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Break-even point for studio space

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Christopher NewBreak-even point for studio space
by on Nov 28, 2012 at 11:11:00 am

Question for anyone who rents out studio space, edit bays, recording studios, etc.: what is your rule-of-thumb for "minimum occupancy"? Obviously, with the caveat that 100% utilization would be preferred, what do you see as the minimum usage for such spaces in order to break even (and how has that figure changed in recent years, as well)?


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Rich RubaschRe: Break-even point for studio space
by on Nov 28, 2012 at 3:08:13 pm

Depends on other overhead considerations. Do you own or rent the space yourself? We have a studio space that rents for $750 a day. I need to rent it out a minimum of 4 times a month. I love an 8 day rental month....more is even better.

But we also have production and post production services too.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
Founder/President/Editor/Designer/Animator
http://www.tiltmedia.com


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Todd TerryRe: Break-even point for studio space
by on Nov 28, 2012 at 3:44:45 pm

We don't rent any of our spaces out... but I do know about what our break-even points would be when we use them ourselves for our own projects, which I think would be about the same if we did rent them out...

On the studio side of things, our soundstage pays for itself if it is used about one day a week. There's not a lot of overhead in there. The use there is quite uneven, just depending on what projects are going on. Some times we are in there shooting day after day after day in a row... but it's also not unusual for it to sit empty for a couple of weeks.

As for edit suites, we have three HD suites (and one older SD suite that I rarely use so I won't throw that in the mix). If at least one of the three is booked for three or four days a week that's about the break even point.

Of course we try to stay a lot busier than that, and usually do. Unfortunately it's pretty uneven. Right now, it's a ghost town around here this week. There are several projects in the mix, but none have had principal photography yet so it's just a lot of pre-production and waiting around. Not good. Conversely the last three or four months have been a firefight, all hands on deck and everyone working just as hard as they can just to try to tread water and keep up with the work (part of that is due to it being a political year). If it would all even out I'd be a happy camper.

T2

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



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Rich RubaschRe: Break-even point for studio space
by on Nov 28, 2012 at 10:44:06 pm

Interesting Todd....same here. Gangbusters Sept and Oct then a but quieter in November....election woes? People sort of realizing we're in for pretty much the same thing? No movement politically/nationally.

Not much to celebrate really. But the work is out there.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
Founder/President/Editor/Designer/Animator
http://www.tiltmedia.com


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walter biscardiRe: Break-even point for studio space
by on Dec 12, 2012 at 2:41:46 am

For break-even you just do the math and see if you think you can hit that number.

Rent/Mortgage+Utilities+Loan+Insurance+any other expenditures+Your Salary(ies) is your overhead per month.

Can you hit that number reliably? Know that you WON'T hit that number every single month in this business. As Todd says perfectly, it's all ebb and flow. All hands on deck to get these jobs done for the clients and then suddenly everyone disappears for a month or two and you're all staring at each other waiting for the next gig to start. So when things are going crazy, you stock away some money for those months when you're slow. Will those crazy months be enough to average out and hold you for the entire 12 months?

Our break-even has increased the past two years but that's a product of a major expansion and just rising costs to do business. But in general we only have to keep two of our five edit suites running each month to easily pay the bills. That doesn't even count our Resolve or ProTools suites. We've purposely kept the overhead low with the mindset of bringing in contracted employees when all hell breaks loose.

Next year, the "master plan" for our expansion will finally start taking shape. The main reason for the size of the expansion was not only to service our existing clients, but to start developing our own original projects for both traditional and new media. To that end I'll be hiring our first sales person at the start of 2013. To date, I've done most of the marketing and sales myself, but to grow the company, we need to bite the bullet and bring in a new person, that'll add to our "break-even" number, but a risk I have to take.

We've also formed a new Entertainment company whose sole purpose is to both develop and seek out original concepts and projects for development. For that I have an awesome friend of the company who is essentially acting as our agent lining up pitch meetings with various networks. That doesn't really add a lot to the "break-even" number since that is heavily weighed on commission, but still adds to our monthly bottom line.

So is that break-even number changing for us? Yes, it's going to increase in 2013, but we're at the point in our company where we are prepared to take that risk for a much better reward.

Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author, Chef.
HD Post and Production
Biscardi Creative Media

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