The State of the Industry an Unsavoury truth!

[soundo26]

Watching the news about the various companies going into receivership recently, along with the fact that I have been made redundant in the last few weeks, I read a post which was yet another " where can I get equipment for next to nothing or free? " and thought that the subject should be brought up here.

 

In this forum there are lots of freelance techs & companies outside the theatre world, the ones who work in conferences & events. This is an area of the industry which is feeling a lot of pressure right now especially with companies going into receivership with alarming regularity at the moment and many others running extremely close to the edge!

 

Much of this will be obviously blamed on the "Credit Crunch" but for many, I believe that it is payback for the way we have been operating as an industry for a very long time now. It seems that every client wants you to do them a favour, supply cheaply, give the best price etc. The list of euphanisms goes on and on but we've all heard them with sickening regularity. In the spirit of competition, the guys that sell the jobs have been doing this for ages resulting in prices cut to the bone, being driven down to ridiculously low profit margins and actually working for the client rather than the company who employs them by ensuring the best for the client at cost to the company.

 

The result of this is that the supplying companies cannot re-invest or even in some cases, maintain the equipment resulting in shoddy & sub-standard kit going out. Other effects are longer working hours for the techs because insufficient budget is there for rig & De-rig time, tech days, Accommodation travel etc. This is resulting in accidents & shoddy workmanship. Often guys are working in the industry who call themselves technicians who are not skilled or experienced and undercutting the ones that are. Standards are dropping all the time in many companies and most of it is down to cutbacks, some companies may deny this but it is going on bigtime!

 

Too many jobs are being operated on shoestring budgets and the clients are now so used to paying peanuts that I don't see how it's possible to move the figures up to the levels where they should be, I'm not talking about small reductions in prices here either, I am now seeing jobs quoted at £3K which, Ten years ago were being operated at £12K. This is not sustainable business, in fact it's not business at all, It's suicide!

 

We all need to sit back and use this forum to discuss where we are all going before the whole industry goes down the toilet because that is exactly where it is headed unless something is done to save it!

 

Areas of discussion need to be Budgets, Costs, Rates, Working conditions, Professionalism, Undercutting, Timescales, Sensible Crewing levels & Rig/De-Rig times, Sensible profit margins & selling correctly. These are just a few off the top of my head but there are many other issues which must be addressed. We need to know where we are going and what is needed in order to facilitate this.

 

This is probably going to be an unpopular post, many in the industry are in denial and will protest. I have seen this from many sides now and across many companies, the industry is sick and needs to take a pill, probably a very bitter one, but it is needed. So how are we going to fix this Guys? or are we all just going to bury our heads and stay in denial????

[Pete McCrea]

By working together and not knee capping each other? Because at the end of the day there's no point all talking about it if at the end of the day you still undercut me to get the work. I know this weekend we got a job that a 'competitor' in the area also quoted. We'd quoted the competitor when the client rang. So instead of aiming low to guarantee the work we rang them and asked them how they wanted us to play the game- quote it, or leave it alone, as our first contact was with them, not the end client. We also agreed that if either of us got the work, we'd take the subhire to the other party. In this case we both won, as it meant that there wasn't a pricing war to secure the work, and that both companies were fairly certain there would be some work in it as we now had twice the chance to secure it.

 

I have lots more thoughts on this, but I can't seem to commit them to the screen right now, and I'm aware my wife is in bed, and I'd like to join her... :)

[Simon Lewis]

By working together and not knee capping each other?

 

So how do we avoid accusations of price fixing and collusion?

 

Simon

[Rob_Beech]

There will always be the companies that DO work together, those that are happy to make a living for the management and its employees / freelance crew and engineers it uses, and happy that other companies that would in many other lines of work including our own be called competitors are doing the same thing.

 

I run a small but competent PA hire company in an area where there are quite a few of them. Some are larger, some smaller, some with more equipment, some with less, some with better equipment, some with worse. The 3 (better bigger more) don't always follow.

Being up north the average price (from experience) for a gig is between half and two thirds that of what you'd expect to pay on the south coast, however it's the same people down there that think it's normal to pay £300,000 for a 3 bed semi :)

 

Between 4 or 5 similar sized companies we'll pass work between us to get the job done for the client. At the end of the day, if the client is happy they'll keep coming back and it's work for everyone. I've paid out over £1200 in sub hires in october for nothing much more than "bits and bobs" that I'm running short of on busier days. But in return I'm passed a relatively small and easy but reasonably well paid local gig. Between us there isn't alot of work we have to say no to when the client has a useable budget. It works really well, we all make a decent living to say the least and know we can rely on each other to get us out of the sh*t if ever we need it.

 

On the other hand there are a couple of local companies who will dive in at half the price and take whatever work off you they can. The client rarely sees past the ££££ signs anymore (more so at the moment) and will jump at the chance of saving a few £ here and there. They'll do a rubbish job, and the client will use them again and again because it's cheap.

 

In this area I think it has reached its lower limit now. For the last 10 years prices have been driven down in exactly the way Brian states, they don't seem to be getting any lower around here now, but it has severely effected the way we work, we still make a living, we probably do more work than we need to to earn it though.

 

 

Brian, when you say this may be an unpopular topic, I think it will be interesting to see not only how many agree with you (I'm certainly one of them) and how many disagree but also to look at WHO it is and what they do. This is certainly nothing personal, but it may give us some interesting statistics and something to think about if any common patterns appear, for example if lots of people ina certain part of the country disagree, or a certain line of work etc etc.

 

I believe there is less work out there than there has been. There are less jobs / events happening, but the bigger impact is each individual job / event / show / gig. Less crew are made to do more work, for the same money as 5 years ago which in turn means that whilst there are nearly as many jobs, there are less places to fill. Alot of freelancers I know at all levels are finding it difficult to find work let alone regular work at the moment.

 

It's something that is going to be extremely difficult to achieve. You will always get the companies that are in it to win it so to speak and this is the problem.

[slim_mcslim]

am now seeing jobs quoted at £3K which, Ten years ago were being operated at £12K

 

Which is not surprising given the advances in technology, 15 years ago I could rent a moving head light that was so unreliable the manufacturers didn't sell them and hired them out with a 1 for 1 back-up. Now I can buy online a precision engineered chinese made 250w clone unit for less than it cost to rent a VL 1 for the day. (I am aware this is not a like for like comparison, but neither is the 3k/12k argument)

 

10 years ago as alluded to in the above quote the average "cheap" lcd projector was 500 lumens, if you wanted high brightness projection (>1500 lumens) you required very expensive equipment, with a projectionist. About 10 years ago UHF radio mics where still pretty expensive, and cheap VHF wasn't worth the cost of the battery, at the same time high fidelity hadn't quite made its way into large sound systems and a Bose 802 was as good as it got, forward that on to now and you have much better microphones that are better at reproducing the natural sound that originates into them, and major advances in amplifier and speaker design now give systems that require no EQ to sound flat and natural, thus making the audio job easier all round.

 

I could go on, but basically the skills required in putting on a basic show have decreased, by the same token the technical skills of the most inept office worker tend to include operating powerpoint. The industry has invented some new technical positions that hadn't been thought of 10 years ago. But given that clients now write their own powerpoint (not that I am saying they are any good at it), there were very few clients who used to prepare their own graphics, photograph the hard copies and then produce and rack the slides.

 

I do actually agree with the original post, and I am sure I am guilty of many of the offences listed, and it is a very long, very slow industrial suicide, but remember there is always somebody willing to undercut you, and that is the nature of the beast that is capitalism.

[Russ83]

So how do we avoid accusations of price fixing and collusion?

Is price fixing ready a bad thing for the future of the business??

 

It is not my intention as a 'learner' in the business to undercut any of you seasoned professionals however when a client asks me to quote for a job I have no standard to base it on so I end up plucking a figure out of my head. This figure is normally based on an hourly rate plus transport costs plus insurance, it is not just an random figure before you ask.

With all the competition between companies I can see why they do not wish to publicise their prices but for someone like myself a little guideline document would be very useful. Does one exist somewhere or do I have to pay out more money to join one of the unions to get this info? (The reason I haven't joined a union so far is because I can't decide which one!)

 

Example:

If I do a days training on the basics of setting up a school recording studio and using Cubase (say 5 hours plus an hour driving) is £150 suitable, too much or too little?? I don't want to fleece a client (even if they don't know any better) and I certainly don't want to undercharge and put myself out of business before I've even built one (if you get what I mean).

On the other side of the scale, if my old music teacher rings up and offers me £20 and a pint to babysit her students on the desks just in case something went wrong am I bad and killing the industry just for doing a friend a favour?

 

Please don't shoot...I'm only putting a voice in from the other side of the field.

[djw1981]

AIUI Price fixing and collusion could lead to an Office of Fair Trading investigation, or at the least a chat from your local Trading Standards guys. However, IANAL!

 

However, one could argue that given the cheap cost of transporting equipment around the country, that the 'market' is a larger area than your local 2 or 3 companies. With companies doing jobs all over the country, and doing national tours for a client, the competition in any one area is hard to establish, thus you can claim that you are not distorting the market.

[paulears]

If you do a days training in a school or college - be aware that they are EXPECTING to pay much more than that. A days cover for a teacher who goes away on a course is usually a book value of around £250-300 a day, for supply cover. They are expecting to pay double what you are talking, unless it needs a teachers assistance. I did a school job once, for a poor, cash stripped school and I charged £225 plus expenses. As I was leaving, the teacher said thanks and as they'd budgeted for around £300, she had saved some money! They have no link with our industry, payment/rates wise. So you just pitch where they expect you to pitch and pay no attention to this industry - where frankly you work so much harder for far less. Educational has no concept at all of anything other than education.

[drsound]

It's interesting that 'progress' has seen the demise of small shops as supermarkets have undercut them to take the customers but in our industry we have seen the arrival of dozens of small outfits joining the big boys.

 

We always try to sell our business on professionalism and the quality of our equipment and staff rather than our price. Some of our clients do accept that you get what you pay for and if someone is offering the same thing for half the price they're probably cutting corners. Having said that we do find ourselves having to match prices with quotes from the cowboys to avoid missing out on the bread and butter work.

 

I've seen this happen in all the companies I've been involved with, some of them very large organisations by our industry's standards. They tend to cut the price to a certain degree for a particular type of client to keep the money coming in then take the profit on the other jobs. It's all about utilisation of equipment and covering overheads in that case - they would rather have the staff paying for themselves than coming off the bottom line.

 

These are difficult times and I always find it sad when a company goes to the wall but that's capitalism I suppose. Companies will only survive if the market is not saturated. I fear ours might be saturated and we all have to consider what we are going to do to ensure the sustainability of our revenue. Mergers are one way to do this and Rob's example of an ad hoc arrangement illustrates this - each company minimises capital expenditure while maximising utilisation.

[Ynot]

Speaking as a hirer and buyer, and one who does so regularly from a variety of suppliers, the price IS important, though not necessarily the be-all.

 

Yes, I try to get the best deal I can for myself or the group/company I'm working for, but the main plan is to work out the overall value for money for each item and quality of service from said supplier.

 

I not so long ago moved from a long-term hire supplier because of his poor attitude towards his clients. His prices were normally very good, but I got messed about once too often. So I voted with my feet and moved to another local guy for the majority of my business. His prices aren't always as good as the original firm, but they ARE more open to negotiation.

[Stewart Newlands]

One way of arguing for this is with British Standard 8901 for Event Management Sustainability, as it does encourage supply chain economic sustainability!

 

That should mean prices are set to be fair, that is fair for everyone from the customer the supplier and the freelancers! What it does mean is that work has to be done to make people include all elements in their compliance statements, so when LOCOG for example asks for contractors to pledge to uphold the standard it is up to freelancers to work with unions and other bodies to push LOGOG to include sustainable pay as well as contract values for the suppliers that cover costs and leave a fair profit margin.

 

 

A quick look at the example maturity matrix on page 19 of BS8901:2007 will hi light many of the issues, we need to try to encourage Full Engagement not Minimum Involvement in all the Key Performance Areas.

 

Being Inclusive (taking account of all stakeholders).

Integrity - developing longer term outlooks and taking responsibilities for welfare seriously across the board

Stewardship - looking after all the assets not just getting what you can.

Transparency - lets look at what we need to survive and what the other parties need a bit of discussion can go a long way.

[JDP]

Speaking as a hirer and buyer, and one who does so regularly from a variety of suppliers, the price IS important, though not necessarily the be-all.

 

Yes, I try to get the best deal I can for myself or the group/company I'm working for, but the main plan is to work out the overall value for money for each item and quality of service from said supplier.

 

I not so long ago moved from a long-term hire supplier because of his poor attitude towards his clients. His prices were normally very good, but I got messed about once too often. So I voted with my feet and moved to another local guy for the majority of my business. His prices aren't always as good as the original firm, but they ARE more open to negotiation.

 

The problem with that, Ynot, is with your being amateur (and I really don't want to offend you here, but) hire companies are really not that interested. They know that your going to only hire as much as the theatre will hold, and thats it. The hire companies dealing with other clients, at least has some chance that they are likely to spend a lot of money with them, and possibly do huge events - where as (with all due respect) if people want an event done they will call in professional full-timers to do it.

 

That in mind, I (check my profile for what my job is) become increasingly frustrated with calls from people who never hire much, wanting to hire little and expecting to pay no money for it.... Its just hassle to prep the kit, and send it out, and sit and tell stupid rental systems that its going out for a 90% discount. So, with all due respect, you can see why the amateurs are less of an important client for us and many others. Not necessarily because of you, but at the end of the day, people aside, we have to make a profit as we are a business - and hiring out small amounts of equipment for very little isn't a great way to run a business.

 

I think as you say, getting an overall deal is fine, you seem to have your head screwed on, and if you hire say 8 Macs from us, and you wanted us to chuck a DMX buffer in, we probably would. BUT far too many amateurs (and schools) will have you hanging on the phone for hours talking VL3000s and LED Screens then reveal their budget is £75.00.... We will deal with amateurs, BUT its on our pricing terms, and we will throw in some cables and buffers, but you pay our prices, and don't EXPECT a discount - as to be honest, your not an important client to us..

 

So, after that, I am sure uproar will occur, but you have to see it from our end as a professional company making a profit, as opposed to Dave the Disco who has a few bits of kit to hire out (cheaply). I am sure Ynot you are sensible about this, but a LOT of schools and amdrams are not, and want full crewing equipment and the works for £200 which ain't going to happen.

 

On our side, we are busy with tours. We have arena tours going out at the moment, so we are doing nicely. It would appear that the corporate world is going a bit bare, with jobs being booked/confirmed last minute...

 

I think the money problem at the moment is fairly significant... We are not the cheapest by any means, but by far one of the best in terms of quality and service. A LOT of smaller (Dave the Disco) type events companies have set up in recent years, seen what we charge for proper equipment and service quality etc, and then done the same, charged the same prices and sent crappy kit out of the door. Now suddenly, these companies have realised that if hey drop their prices to be cheaper than us, they can get the work that way... Sooooo many companies you see are small and cheap, or 'value for money' as they call it as opposed to having a set 'price list' that an event is priced from. The reality of course being that these small companies' accounts go up and down in waves depending on the type of year their price lists change etc which looks really bad if you check any of them out financially - where as we continue to price jobs the same, go up with inflation and have a steady growth.

[Bill Keown]

As a reader of this forum for many months, I've never felt the need to register. But this topic is something that I've been trying to address ever since I became involved in the industry around five years ago. I try to not discuss money too much as it can lead to trouble, from experience.

 

I run a small but competent PA hire company in an area where there are quite a few of them. Some are larger, some smaller, some with more equipment, some with less, some with better equipment, some with worse. The 3 (better bigger more) don't always follow.

Being up north the average price (from experience) for a gig is between half and two thirds that of what you'd expect to pay on the south coast, however it's the same people down there that think it's normal to pay £300,000 for a 3 bed semi :huh:

 

What Rob mentions above is a very interesting point. Rob are you aware of how much worse this gets if you drive 40 minuites north? Just as an example, 5 years ago I was a keen 19 year old, getting some of my first monitor gigs, experience dealing with musicians and promoters. All very valuable to a keen young man. The wages I recived were around £60/day. Sometimes for up to 6 bands per night. I did however get a little 'pay rise' to about £70/day when I was given my first proper UK tour, doing theatre shows all over the UK, driving the van, doing monitors from FOH. I thought this was taking the buiscuit considering the figures I had been hearing from other corners of the country.

 

A year or so after realising that something had to be done I set about starting a hire company, one of the main aims, aside from the usual blurb was to make sure any freelancers I used were going to recieve a decent day rate and decent conditions. With the aim of driving up the hire charges and freelance rates beyond their dismal state (it's 2005 for christsake!). To a point this has worked. But it is hard to shake up the market as much as I'd intended, we were afterall just another small company trying to 'make it'. However, we have won a number of contracts, not through being cheaper than other locals, more due to things like "your crew are always happy", "nothing is too much trouble", "very helpful". These are comments from people over the last few shows. It seems that the majority of artists would much rather have a cheerful and helpful crew, even if the cost of the hire is greater. We all know, and have seen the typical (I am sorry for the generalisation) pub soundman who simply shrugs his/her shoulders when there is a problem, as if to say 'deal with it'! Anyway I have digressed enormously...

 

Back on topic, price fixing would be a brilliant thing, albeit illegal. But if for example there were ten companies in a particular area who can agree and stick to a set of prices there will always be another five underdogs, with shabby equipment and skills, who will nick all of the work and damage the market further. I can easily think of ten PA providers in North Lincolnshire (not a big area) and I think seven of those will gladly take out a reasonable sized pa, with a 24ch desk and a rack of outboard, six wedges etc etc for less than £150 all in. Grim times. I and others all loose work to these people.

 

Also, consider the negative impact that cheap brands and online retailers have on the industry. Those of us sstriving to do a good job, will not bat an eyelid at buying amplifiers that cost £2000, or FX units that cost £800. But we still lose work to the behringer brigade. It's about time for this discussion (moan?) to end, I may resume later.

 

Oh and hi to anybody on here that I know. Rob, Simon etc..... hi guys!

 

Bill

[Guest lightnix]

Hi Bill, welcome aboard :huh:

 

I don't see why co-operation and pursuing common goals automatically means price-fixing. Would it be price fixing, if all the hire companies agreed to raise their rates, whatever they were, by inflation +0.5% over a period of 10 years - to try to repair some of the damage done by the relentless undercutting of the last 20?

 

Besides which, let's not flatter ourselves about how big we are in the general scheme of things - I'm sure the OFT et al have far bigger fish to fry. It's not like we're talking about ripping off the taxpaying public or consumers at large, now is it?

[peternewman]

for someone like myself a little guideline document would be very useful. Does one exist somewhere or do I have to pay out more money to join one of the unions to get this info? (The reason I haven't joined a union so far is because I can't decide which one!)

Certainly BECTU publish guideline prices Russ, I'd imagine most of the other unions would too (ALD I guess you're thinking of?). Although for any further discussion of this, you're probably better off searching and either posting in an existing thread or starting a new one, so as not to drag this too far off topic.