Definition January 2023 - Web


capital expenditure and we will continue to use this method of finance. Do you think things will get back to how they were, or is demand outstripping supply the new normal? LW: As far as supply is concerned, we’re confident that things will go back to normal over time. That said, people and technology have moved on exponentially since the ‘norm’, therefore there is the potential for excess supply in particular areas, specifically where virtualised consolidation has occurred. As far as cameras and general hardware are concerned, we believe these are always in slight constraint – if only by manufacturers as part of the trend to generate scarcity and drive up awareness and demand. HB: I do think things will improve and level out – though not to pre-Covid days. What people often don’t realise is that whether you’re talking about a single piece of tech or a major integration project, there’s a host of processes and steps involved in getting the product from manufacturer to end client. A lot of the day-to-day issues I deal with are as a result of supply processes not working. These are the same problems we’ve had pre-Covid, and probably the same ones any procurement team deals with – but improving communication would go a long way to making the supply chain issues easier to deal with and reducing the impact on our end clients. BB: Things have already settled down compared with 2021. The market is very efficient at reacting to this type of event, so just as demand creates supply, when this grows to the point that there is too much supply, prices will adjust and some will drop out of the market. With the amount of studios being built presently, I think rather than equipment shortages, crew availability will become the next bottleneck for the industry.

we deal with aren’t typically done out of cash flow. The biggest change has been a move to monthly or annual subscription models as opposed to perpetual licences. Clients are also looking for creative ways to manage capital versus operational expenditure, including options to not only finance major technology purchases, but spread the cost of an entire project – including consultancy, services and support – over a longer term. BB: As cameras improve, demand for the top models has come to abate for dailies and commercials, as we are noticing more clients choosing to shoot with cameras like Sony FX6/FX9 instead of top Arri or Sony cameras – and we think that this is for budgetary reasons. However, what’s important is that they continue to demand quality lenses, even with ‘traded- down’ cameras. This is an important development, as all cameras are now able to shoot superb pictures, so DOPs will find other ways to put their creative stamp on their images and manage more from limited budgets. This has only become possible as a consequence of continual technological development. Leasing is a convenient way to fund

built-in four-axis gimbal which didn’t exist last year. This caused a resurgence in interest in gimbals, and these cameras have been used now on several dramas in place of Steadicam and the like. Major innovations are always good for the rental industry – you just don’t want too much of a good thing! Which is the biggest growth area for you? What trends are you seeing – interest in new products, second-hand, leasing or products being bought on finance? LW: We’ve seen an increase in rental – as you’d expect – alongside an increase in production. There is, however, a shift where traditional rental is seeing growth in managed services, as hardware becomes more intelligent. Engineers are having to expand their knowledge, and networking and cloud architects are playing an ever-increasing role as video over IP, NDI and SRT become the norm. Ultimately, we believe this shift will see the traditional rental house become more of a technology business. HB: We only sell new products, and financed deals are a natural part of our purchase agreements – the tech purchases

51. JANUARY 2023

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