Despite a lack of big sporting events, 2007 has been another boom year for the hire sector. Suppliers have been stocking up on the latest technology, driven in no small part by TV’s ever-increasing move to HD.
The hire sector finished 2006 on a frothy wave of optimism. Buoyed up by a year of big sporting events plus the breakthrough of HD into something approaching a mass-market proposition, the forecasts for 2007 were bullish in the extreme. And despite a highly competitive environment, which included a certain amount of consolidation as well as the high-profile collapse of the Picture Canning Company at the start of the year, the mood remains positive.
“Rates are holding up, the traditional busy season appears to be extending and we are currently 15% up on hire turnover,” says Rob Newton at Visual Impact.
While there is always an inherent danger in treating a sector as diverse as hire as a single entity, it’s a mood that seems to be prevalent among companies across the board. Inevitably there has been a downturn in sports hires, as not only are odd-numbered years traditionally quieter but what large sporting events have occurred in 2007 have either been geographically distant or, like the Rugby World Cup, haven’t required blanket coverage. But an increased tendency to diversification has protected companies against the worst of the market fluctuations. And, besides, Beijing is looming large.
High definition, meanwhile, has been an out and out success story for hire in pretty much all broadcast areas except reality where it has yet to make any inroads. “HD demand in 2007 has been incredible,” says VMI managing director Barry Bassett, while Charter Broadcast’s technical director, Roy Callow, adds: “We’ve introduced a lot of HD equipment this year that had been tied up on long term projects and we can’t keep it in the building now.”
Mitcorp’s Stephen Ratcliff adds: “We have seen continuing growth in HD rental this year with daily rates staying mainly the same as in 2006.”
Sport, of course, has been leading the charge to HD, though the sense is that drama and documentary are catching up fast. Drilling down into exactly what HD kit is popular produces mixed results, especially on the camera side of the business, where kit popularity often just reflects the investment patterns and stock lists of the companies concerned.
Trends are therefore difficult to spot. However, talking to companies for this piece, Panasonic kit seems to be an increasingly popular choice for dramas. “In layman’s terms Sony looks like Fuji with its very bright, brash colours, while Panasonic has the more subtle tones of the Kodak stock,” explains Axis Hire managing director Paul Carter.
It seems that ancillary HD kit is flying off the shelves at the moment too, with EVS servers in particular being namechecked by several companies as being in high demand. Synonymous with sports slo and super slo-mo, Presteigne Broadcast Hire, for instance, has 21 of EVS’ XT HD and SD servers for hire across Europe. And while this undoubtedly represents a substantial level of investment, with a ratecard price of just shy of £1,200 a day, it’s also one that potentially yields a significant return.
“Our investment now is predominantly in project systems kit instead of just HD cameras,” confirms Charter’s Callow. Among other things, this is leading to companies investing in complete camera channels rather than discrete units.
“We bought the full sports build-up kit for our Sony HDC-1500s and we’re finding that if the cameras are out as an ENG type hire, then the build-up kits go out to other companies that need the full components for that particular camera channel,” he says.
Through the lens
While headlines tend to dwell on new camera models and technologies, one of the most pressing issues for the hire sector is the cost of HD lenses. “The cameras are coming down in price but the glass, the lenses, are still expensive,” states Carter. “The lenses are still coming in at £20,000 but we’re only making what we would on a standard definition lens.”
Quantity is an issue too, especially in relation to HD lens production. “Lens manufacturers are holding the market back at the moment because they can’t produce enough lenses and they’re looking at a six-month lead time for the ones they do produce,” says Callow.
In some ways it’s surprising that HD lens ratecard prices are not moving upwards as a result, but these prices have to be seen in the wider context of downward pressure on HD rates. It’s not a completely coherent picture - the pressure is referred to as “significant” in some quarters and isn’t even referred to in others - but as the volume in the market grows the smart money is hedging on the imminent death of the HD premium.
“We all thought there would be a two-year window after which everyone would have HD and it would start looking like DigiBeta, and indeed by the middle of next year HD rates will probably be at the level of DigiBeta dailies,” says Carter.
On the whole, though, rates seem to be holding their own, though the usual discounting and occasional rogue deal that dramatically undercuts everyone else has to be taken into account. Bulk discounts are widely available, with any number of five and even seven-day for the price of four offers around, while hire companies also report an increase in their production counterparts willing to sign longer-term deals rather than chasing prices downwards on a week by week basis.
There has yet to be a repeat of the “reverse eBay” style auction held by the BBC last year to help it select preferred suppliers for kit and crew hire. Given that it was unpopular and was seen in some quarters as a cynical exercise in driving down rates, that’s probably a good thing. Within hire, the memory still smarts. “It wasted several hours for many company owners and drove down rates to unsustainable, below competitive levels for major productions,” says VMI’s Bassett. “VMI has actively stayed away from major BBC series as a result.”
Jamie Hindhaugh, head of sourcing, production resources and logistics at the corporation, insists the auction was a success and that price, while a criterion, was not the sole factor in establishing a framework of suppliers. “We were very clear from the start that we didn’t want people to undercut themselves,” he says. “We want a sustainable supplier base and understand that we have to pay a margin for it. We didn’t take the cheapest price and anyway that was only one of the criteria we used when it came to establishing the framework.”
He maintains that as long as auctions are run properly and ethically, the BBC is “quite comfortable” with their operation, though he acknowledges that hire is a difficult market for them to succeed in. When the current three-year contracts are up, “what we’ll probably do is run separate lots on separate occasions”, he says.
The return of SD
A happier story all round is the resurgent growth in SD hire at the tail of the season, which has become ever more noticeable as autumn approaches and the sporting events have dropped away from the schedule. Corporate clients in particular are returning to the format which, along with the fact that the majority of programmes are still made in SD, means that kit investment can still be worthwhile.
“SD is still as popular as HD so we are always investing in both areas,” reasons Clive Northern, rental manager at Gearhouse Broadcast. “SD cameras in the market can be a bit old and tired now, and we have recognised this and are investing in 50 new Sony BVP E30 cameras to replace our older BVP 550s.”
Not all investments in SD approach that scale, though refurbishing ageing fleets is a growing concern. Charter’s Callow speaks of being in limbo regarding mini-cams in particular. “Reality shows haven’t quite gone high def, so do we continue our investment programme in SD mini cams or take a leap and go HD with them?” he asks rhetorically.
Perhaps what’s most interesting is the resounding silence surrounding tapeless formats. Mitcorp’s 100-strong purchase of Sony’s solid state “P2-chaser”, the PMW-EX1, at IBC aside, tapeless seems to be struggling to gain leverage in the wider production environment.
“There is still a trust issue,” explains Shooting Partners’ Shaun Wilton. “Production likes to take away a box of rushes each day, even when you prove to them tapeless acquisition works. Everyone has had a PC crash on him, so there is a fear already there.”
There is the odd blip in the stats - VMI’s Bassett says that P2 demand has been “very good” - but the general feeling is that outside fairly well-delineated working environments and the tried and trusted EVS kit, tapeless just isn’t there yet. “The cost of tapeless storage is a problem,” adds Wilton. “There are too many proprietary systems, there isn’t enough free exchange of data at high speeds and production teams have difficulty trusting the new workflow and archive systems.”
None of which should detract from the fact that the Beijing Olympics next year will see a plethora of tapeless systems and workflows deployed out in the field.
In fact, in many ways Beijing is the exception which proves the rule: air cargo charges might usually mitigate against companies competing on a truly global stage, but they’re certainly not stopping much of the UK industry supplying kit to cover the event next August (with the inevitable shortages and trickle-down demand that will result). And with the Euro 2008 football tournament in June, 2008 is already looking good for sport.
“Sights are set on Beijing at the moment, but we must remember that this is only three and a half weeks out of 52 weeks of the year,” says Presteigne managing director Mike Ransome.
Besides, it looks like 2007 isn’t fully dealt with yet, with companies reporting still healthy order books at a time when normally the rentals are drying up in the UK and the sights are already half set on spring. “The signs this winter are that the dip in rentals which traditionally happens around October time will happen later in the year making 2007 a longer season and a good year for us overall,” comments Newton.
Is the future Red?
The hire sector is a great test bed for manufacturers and is a useful place to assess the reaction to new technology.
After an interminable time hovering in developmental limbo while the world’s camera manufacturers surrounded it and loudly suggested the emperor was, in fact, wearing no clothes, the Red One digital camera has apparently finally started shipping in small quantities.
The first 50 cameras are now in the hands of their owners and the company has orders comfortably into four figures for more. Famously promising 4K capture at a fairly astonishing $17,500 (£8,567) - though that’s for the body only, the accessories required to make it anywhere usable nigh on quadruple the price - scepticism, however, is still fairly strong.
“Everybody is talking about the Red One, but it reminds me of that joke about HD and teenage sex: everyone’s talking about it, few people are doing it and those who are actually doing it quite badly,” says Bassett.
“Will Red deliver? I don’t care,” counters Carter, who has a couple of the units on order for the end of the year. “It will create interest and an upturn whatever. I suspect it will deliver though and make a significant difference to what we’ll be doing in a year’s time.”
At the other end of the tapeless market, the long overdue release of Grass Valley’s Infinity format and Sony’s second generation XDCAM HD kit should provide a boost to the adoption of tapeless workflows. Nobody though expects progress to be quick as sports OB in particular demands kit to be tried and tested to bulletproof standards before it will embrace it.
Meanwhile, Charter’s Callow has detected a potential delay in one of the most consistently forecast technological advances. “There seems to be a lot of backpedalling from the 3GB/s 1080p people who are realising that the technology isn’t there to get the signal into one SDI stream at the moment,” he says. “That will be the next big thing on the market, it’s just the time it will take the Silicon Valley manufacturers to implement it.”