really creates more demand for your services?....
Well in my industry the largest expense has always been offset printing and distribution. The photography budget might be 15k (of which I'd get 2-3k) on a printed piece that costs 100k before it hits where its suppose to hit. With the ability to publish on the web that offset printing cost disappears but the design and photography budget still remains. companies are using their money for fewer printed pieces while rapidly expanding what they publish digitally just because the cost difference is so great. Bad for those offset guys (who'd been hit by lower cost printing in China for years anyway) but good for me.
Going to the web to publish doesn't in any way reduce the need for images it expands it because if you hadn't noticed corporate communications on the web and their intranets has exploded. Just four five years ago if you went to a company site you were lucky to find text and a few graphics, now you can download complete product descriptions of everything the company makes, complete with.....photographs.
A lot of this stuff is being produced inhouse, but a great deal of the higher end stuff can't and never could be produced in house. Or it might be a combination of inhouse and free lance where a client might hire a designer to work up a style sheet and they then place up dated product descriptions and images on a regular basis. Perhaps they hire an outside consultant like some of my clients to get the inside guy to a point where all products can be photographed inside.
Now the big dream was when we went digital (away from the film intermediate step) that the images wouldn't need any post production work at all. Well recent experience has proven that hope to be false. Digital images need a different type of post production than film images but they still need it none the less. Problem is no one is really set up to do that except guys like me.
Now lets take it down to my level. In the photo world I had 3000 square feet of machines, plumbing, electric, computers and several well paid assistants. My cost of goods ran about 40% while the overhead and capital expense ran about 30% on a typical year,leaving me with 30%. Switch out to me working in 500 square feet, no plumbing or big machines but a Dell costing maybe $3000 with all the software and a high speed line. I work alone, so no employee costs. The capital equipment expense is about what I used to pay in postage every year. My materials cost has been reduced to less than 1% from 20%. What is great is that I can charge more for my time, I handle more images and what I charge isn't coming out in overhead. I've moved from the incredibly shrinking margin to fat margin heaven. If I get more work, I buy another computer I don't have to hire and train (another cost sink in my old biz). The computer takes about two to three hours to process a good sized job (1400 images) the part I do maybe involves 20-30 minutes spread out over that time and the rest of the time is spent waiting for the machine to finish its batch so its incredibly easy and cheap to increase capacity.
Now here's where you ask me that if the equipment is so cheap and the top line so good, won't I be hit with lower cost competitors from places with lower labor cost? This is where I tell you its not the equipment that makes what I do so valuable. Those are simply tools, what people are paying me for is something you cannot teach a machine to do and that is make a decision about what it is that turns an ordinary image into a great one. I pass the Turing test, the machine doesn't. The software and the machine can get you really close, it can get you in the ball park very fast which is an enormous boon to the industry as a whole. In other words machine prints from Walmart processed by a teenager look almost as good as what you get from a seasoned professional printer. The problem is that isn't good enough for my clients, it never has been. In my business they pay you for your mistakes, or more correctly the thousands of trials you don't send them but the finished image which is the product of a whole bunch of images in the trash.
Try to outsource my 30 years of working with images to some guy in India, I dare you. Further more why would you, I make you money. I'm a profit center to my clients not a cost. OTOH creative people have been replaced for years and years by just out of school 20 somethings (I know because I was one of those 20 somethings that replaced some old guy), for a good reason. They are usually fresher, more creative and they cost less. The key t sticking in the biz is to maintain that freshness and don't price yourself out. The newer lower cost structure of my business makes up for the last ten years of getting squeezed from above and below.
This lower cost structure for me and for my clients moving from offset printed communications pieces has been brought to you by one of the biggest innovations to come along, the Internet. Believe it or not its improved my profit percentage by 300%. |
