A race to the bottom?

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A race to the bottom?

Postby sunia » Fri Nov 19, 2010 12:44 pm

I just had a conversation with a potential customer. They were looking for a price on a feature length documentary on Blu-ray that would be going to replication, and has 5-6 menus. Also, the format they'd supply the master in won't work in the encoder, so it would need to be converted to an intermediate uncompressed file first. And they want it early next week. It's a lot of work, with the encode alone taking 12 hours or so to complete (something we'd run overnight).

I found out from the person who called that they were quoted a price that's 1/3 of what we quoted from another authoring house (I'm familiar with them). What we quoted, I felt, was low to begin with. I know the other place didn't pay for their authoring system, but even so, the amount of work that has to go into making a feature length disc is formidable.

This is a trend I've noticed for the past year. Everyone seems really eager to drop their prices just to get a client in the door. But in the end it does nothing but hurt the whole industry, especially the people who have to do the work at those low prices. I simply can't see how anyone can make a feature length blu-ray with menus for $500. Frankly, the $1800 or so that we quoted seems low, considering it's easily 2 full days with someone on the authoring and encoding, plus our rent, electrical, lease payments for the authoring system we PAID A LOT OF MONEY FOR, plus responsibility should something go wrong in replication. For a rush job, no less!

I guess I just needed to get that out. There's really nothing I can do to change this, but I don't see how this industry can continue to survive when the pricing for a Blu-ray is significantly less than we still charge for DVD authoring (which is faster and easier in most respects)

What do you think? How do you compete with someone who is just undercutting you? The argument that the client will come back when they realize they got a lousy product does work when it's the kind of client who releases a lot of material (and we have a good business doing features in DVD and Blu-ray now from several clients like this). But for the ones who only do occasional work, how do you combat the bottom feeders?
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Re: A race to the bottom?

Postby EricP » Tue Nov 23, 2010 5:08 am

Well I understand what you're saying and it's true that some competitors have had dramatic low price.
Even 1800$ for a complete (even easy) BD authoring is very low!

As you said, your client will probably come back to you for the next project or so when he realize that the competitor isn't doing it the right way.

I must say we've been pretty lucky that our clients still recognize the value of our work and keep trusting us even when competitors come with challenging prices.

I would suggest to rise the number of clients as much as possible to pare this kind of behavior. More easy to say than to apply I know!
But clients will come back - or competitors will just fall by the number of jobs they can't handle at that rate or review their price range - I don't believe it's either viable for them.

Just my thought.
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