Buy Or Hire Your Way To Red Carpet Success

Picture the scene. You've just taken a call from Britain's hottest producer offering you a chance to be part of his latest independent production for the BBC. It's a six month pilot project paying serious cash, not to mention the industry recognition you've worked so hard to get. It's your ticket to next years BAFTAs.

But your kit really isn't up to scratch.

And typically, you haven't got any cash in the bank to replace it. How on earth are you going to come up with the goods to be ready when production starts in two weeks' time? Beg, borrow, or steal?

Thankfully there's no need...

When it comes to having the latest kit, you have two options: hire or buy. Each obviously has its own benefit, but as a freelancer you'd be wise to weigh up both options when you have a healthy pipeline of projects. Let's take some time to consider both.

Avoid the Format Wars
Big brands spend millions in the battle to become the de-facto standard in technology and supporting formats. As we're all acutely aware, it's a tough, cut-throat industry out there with big winners and losers. The fight between Sony and JVC back in the 80s is just one of many. Both brands invested millions in marketing the consumer format. But with the wrong route to market, the arguably better technology and format lost out in the fight for supremacy. While JVC's VHS became the de facto format winning the prized consumer market, the better format actually won the professional war.

As a freelancer, spending thousands on a new technology format could make or break you. In the past seven or eight years alone, there have been around 20 different formats and production types. Imagine if you bought one of each. Not only would you be broke, you'd have a room full of completely useless kit. In fact we strongly advise against becoming an early adopter.

Leave it to the hire companies to invest in new formats; let them take the risk and work with them to make sure you have access to the latest of what you need to keep that pipeline flowing.

Don't get embroiled in format wars. You'll never win.

It's maths. Not rocket science.
But once a major format does become widely adopted by the industry as a whole, it could be time to invest. Let's look at the maths. If a camera body costs around £30,000 (camera formats usually last five years), by going down the route of buying it through a finance lease for a £1,000 per month you'll achieve payback in three years.

Compare that to hiring it for £300 a day. If you need the camera four days per month, then you'd be paying £1,200 a month. That's an extra £200 per month.

You don't need to be a genius to work out that in this instance, you'll be better off buying than renting. Don't be afraid to sit down, evaluate your long term projects and plan how long you'll need the kit for. Then decide whether it makes financial sense to rent or buy.

Budget, budget and then budget some more
Whichever corner of the industry you're coming from, as a freelancer or small business you have to budget. And then when you're done budgeting, you need to budget some more. I really cannot overestimate how important budgeting is for the health of your business.

Add to that the most successful businesses out there are those that combine their expertise with a sound business model.

One final point. Let's say that hot new producer is true to his word and does offer you a few hundred thousand for the project over the next few years. Of course you'd be better off buying the kit, owning it and using it every day throughout that time – however if the project is very short term and the rental cost is minimal compared to the hire costs and it is a definite one off, then hire your kit as you may be left with a camera at the end that you may never use again.

It all boils down to planning and budgeting. And also knowing what you have on the horizon and having the confidence and determination to get your projects paying back maximum returns. You never know. By being creative, brave and balancing your finances, you could be the one walking down that red carpet one day.

Article by Peter Savage, CEO, Azule Finance.

www.azule.co.uk

This article is also available to read at BFV online here, page 52.

(JP/LM)