Financing The Industry

Peter Savage, MD of Azule Finance, discusses specialist financing and reveals his thoughts on the investment and camera markets.

Why specialist financing?
What sets us apart from traditional high street banks and less specialist sources of finance is that we’re able to lend against the value of the asset itself, such as a camera or the hardware in a studio upgrade. The fact that we’re a specialist company also means that you’re speaking with industry experts. We provide finance for all levels; from the freelancers we speak to every day of the week who are looking to source cameras, all the way up to studios.
Regardless of the amount of Quantitative Easing that is pumped into the economy, high street banks are still subject to regulation, which means a certain proportion of lending has to be secured. What this means for small businesses or individuals looking to fund a camera for around £30k (€34.7K) is that they must borrow against the value of property or tie it up with ‘book debt’, which can be much more onerous to the business. The funding relationships that we have with our banks are tailored so that we have much more flexibilty than a high street lender, which enables us to lend our money out on far more attractive packages on both rate and risk.

Change is constant
The entire media, broadcast and filmmaking industry has changed massively since I first appeared on the scene, and finance is no different. In the late Eighties and early Nineties it took upwards of £2 million (€2.3 million) to set up a post house, and even ENG cameras were selling for around £60K (€69.5K). Recent years have seen camera prices fall dramatically and it’s possible to buy a broadcast spec camera for around £10K (€11.5K). More recently, the average size of deals was about £75K (€87K) in the early 2000s, but recently it’s come right down to around £30K (€34.7K).

Investment over the next year
We’re expecting investment from hire companies to come at both ends of the market with high end cameras like the Sony F-series expected to continue to do well at the same time as more affordable, broadcast-spec cameras from Sony, Canon and JVC like the PMW-200 and GY-HM650. 
Interestingly, this year’s tax breaks should benefit the UK high end drama market, and after the increase in capital allowances meaning that companies can claim back tax up to £250,000, hire companies, production and post-production companies have been strongly encouraged to invest. As ever, time will tell.

The camera market
Few will be surprised that this year's NAB show was dominated by 4K, whether it was manufacturers showing off their latest 4K cameras for ever more affordable prices, workflow companies claiming to be able to handle the data-heavy format, or OB companies like Telegenic promoting 4K for live production. Blackmagic’s Production Camera stole the show by providing 4K for less than $4K, while some manufacturers were even talking about 8K.
This trend towards 4K continues from 2012, with Sony's F65 and the RED Scarlet coming to market in the early part of the year, and the Sony F5 and F55 being announced at the end of October. The 4K push looks set to continue and I believe that it will continue to develop throughout 2013, as more post-houses become familiar with the workflow, initial concerns are laid to rest, and we see an increasing number of features shot in 4K. The digital cinematography market also looks set to grow from strength to strength and Panavision's return to the camera market is giving it yet another shot in the arm.
At the other end of the market, using DSLR cameras for broadcast video has previously provided a cost-effective way to get a cinematic look and feel without breaking the bank, but reliability has always been an issue - DSLRs were never a great choice for productions that required long, continuous shooting. The introduction and growth of large sensor camcorders at more affordable price points essentially removes the market for DSLRs on video shoots. Cameras like the Sony FS100 and FS700, Canon C300 and the Blackmagic cinema camera for around £2.5k provide options for filmmakers and broadcasters that deliver the same look and feel, but with much greater reliability.
The article is available to read in the online edition of Regional Film & Video here.