In theory video production could pivot but the skillset and customer base is completely different to tech. So what would companies pivot to? Developers can code something else but the option for filmmakers to go and shoot something else is less clear. It’s a highly competitive industry with a relatively fixed cost base for labour and equipment so margins are low and being squeezed all the time. We feel like we’ve responded pretty well so we thought we’d lay out some of our actions in case they’re useful for anyone else in a similar position.
What could we do?
They have been holding large scale video conferences for Production Company MDs to have Chatham House style discussions on ways to get through. We’ve been combing through the updates and have found some genuinely useful tidbits in there but also mooching around elsewhere for clever ideas. There aren’t many but we think there’s a lot to be said for getting basic things right.
Prior preparation and planning
We run off a RAID5 NAS server with cloud backup for live projects and deep glacier storage for archiving. So, further copies were made of all live projects to ensure so that when it came to it both of our editors could grab drives, Macs and and go. This meant that when we made the decision to work from home, the hard work had already been done.
We looked at our contractual obligations and looked at what we could possibly negotiate to take a break or reduction, with some success. Some didn’t reply, some gave us a flat no and some were open to discussion. We don’t want to name and shame those who wouldn’t help but also those who would discuss it asked for the arrangements to be kept private so all we can suggest here is ask. You never know.
We then did a forensic crawl through our cashflow and cancelled things where we could. This was a balancing act because every cancellation decision we made has a cashflow impact on someone else. Whilst an argument could be made to say that other companies’ or individuals’ cashflow positions are not our problem, we recognise that some of our suppliers aren’t in the same position of strength that Vermillion finds itself in at this crunch period. We’ve always believed in behaving responsibly. For example, we cancelled some of the software that we use infrequently but we committed to paying our cleaners regardless of whether they come in.
This meant our own cash position needed some bolstering. Our payment terms usually involve 50% in advance and 50% upon completion. As the majority of our clients are larger corporates we tend to take what we’re given when it comes to payment terms. This often makes life hard for us because freelancers expect payment on 30 day terms regardless but we weather that storm most of the time. In early March we started to become more militant about it and the finance departments we spoke to were amenable to this.
We contacted all of our clients to ask if any existing projects could be moved from being shoots to being animation. None of them could but one had some they were in the early stages of scoping out and were interested in exploring how it could be done as animation. [Update: We’ve had one move from being a shoot to being an animation.]
- Make critical decisions as late as you can, you never know when new information will be available
- Make people centred decision early if you can
- Speak to people. All of your customers, suppliers and staff are eager for information and reassurance. This is particularly true around payments. It’s better to know early that someone isn’t going to pay you so other arrangements can be made.