07 November 2012

INVESTING IN SOUTH AFRICA’S ENTERTAINMENT INDUSTRY


I was at the official opening of Christie Digital System’s Johannesburg office last night – their first office in the Southern Hemisphere (we are beating Australia and Brazil by a couple of months).
As would be expected, I ran into a number of colleagues and friends from the industry and the inevitable question is “How are things going?” Half said it was difficult, but surviving and the other half said that it was going very well. The latter half I take with a pinch of salt, they are certainly busy, but are things going that well?
I keep hearing people complaining that customers are slow to pay and that budgets are lower than ever. What is the actual state of affairs in our small industry? I am not an economist or financial wizard (if I was, would I be here?), but I have been around for a long time and talk to a lot of people and I have some opinions.
The only really serious problem I can see, is too many people chasing too few jobs, we are probably heading for a major re-structure of the industry, especially in the rental market. 
While I laud the people that decided to not join the big players, but rather carve their own little niche, I am worried about their profitability on the long term. They seldom can afford to invest in all the equipment they need, so they end up sub-hiring, but still having to charge the low fees that got them the job in the first place – they too often only turn money around, but make very little profit.
What is the first corner cut when the budget is low? Personnel. Less staff on the job means more profit, right? Wrong – all it means is killing your workers by over working them and they leave (huge loss of intellectual capital). Not even to touch on the safety aspects of having dead tired riggers… Very scary!
But I digress, the point is that our industry is in financial turmoil, but not dire straits. Being the eternal optimist, I believe that it will all normalise and settle down with the big guys getting bigger and a strong, but smaller than now, base of smaller companies serving niche markets.
Finally, I take my hat off to Christie for believing in us and investing in South Africa, it certainly shows a commitment and a positive attitude to our industry – one more of us should emulate.

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