Challenging Times

October 2008

Challenging Times: Time to Reassess the Plan

These are challenging times indeed. The contracting economy requires new tactics and strategies. The events that took place when the tech bubble burst early in this decade and the conditions in the marketplace after 9/11 are all too familiar. Some of the same fear from a business point of view is present today, many times over, it seems.

It is a time for calm, clear thinking, not for panic. But that does not come easy. We are going to lose some companies along the way. Some have been hanging on for a while and now are going over the edge. Some of that may be attributable to the inevitable, companies without a clear business model, inferior products or services, or inexperienced or incompetent management.

Others are simply at the wrong place at the wrong time.

Companies of all kinds need to take a close look at their businesses, including the all important business functions upon which their creative, technology, service or manufacturing operations are based. This is not just a good thing to do. It is a mandatory aspect of surviving, of succeeding in the short or long term.

It is time to take a serious look at all operations and to set priorities. For those companies that have been operating without a business plan, it is time to prepare one. Running by the seat of one’s pants is not a viable option. You know who you are. You need a plan for the business.

This includes the all important area of management, not just top management, but the line managers that are vital to the ongoing success of a business. It is not a time for mediocrity.

At a recent entertainment industry event I had a discussion on this topic with someone. She brought up an example of what I call “failing upward,” someone who changes jobs every couple of years in what seems to be successive increases in responsibility without the necessary skills. Failure should not be rewarded. It should result in a demotion, not a promotion, yet some continue to fail upward repeatedly.

“Under New Management” has both positive and negative connotations. Be careful.

It is within the framework of the current challenging economic environment that we predicted that there would be further examples of failing upward, a process that few companies can ever afford, especially now. Sometimes such changes impact not just the hiring company, but ripple to the other organizations along their food chain, from vendors and suppliers to the customers.

What is required, we agreed, is that as companies of all kinds assess their organizations and contemplate changes, that they consider bringing into their companies people with bona fide track records, not just a series of jobs. Change for the sake of change is not a viable strategy.

While this newsletter does not purport to include a complete list of to dos for those assessing their operations in these trying times, we recommend that you read a few of the articles of a timeless nature that we have written in the past. These articles address some of the topics that we have noticed are arising with more frequency during the current challenging economic times.

These articles include Never Accept the Status Quo, written shortly after 9/11; Building for Tomorrow, Operating for Today; Ten Steps to a More Profitable Company; The Seven Steps Beyond; When Showing Up is Not Enough; and others.

Of course, we are available to discuss how our services might contribute to your success. Quite often an independent, objective and knowledgeable perspective can make a big difference.

Trends in the Marketplace

· Challenging times for productions – Recently there were two very different announcements on where to produce movies and TV. Marvel announced that for the next few years they will shoot at Raleigh Manhattan Beach Studios, for among other projects, Iron Man 2. This will enable them to keep a closer watch on the projects. NBC Universal announced through Jeff Zucker that they will begin shifting some production to London, citing “Production in the U.K. is done at a much more efficient rate.” Each makes a valid point, doing what is best for its organization, given the current economic climate. Expect other announcements that indicate reassessment of where production takes place.

· Digital from Analog – February 17, 2009 is right around the corner. It marks the end of analogue broadcasts. For approximately 85% of the US TV households, it will be a non-event as that is the penetration rate for cable, satellite and the nascent IPTV/telco video products. While the date might be expected to bring an increase in the number of paying subscribers as well as growth in the number of HD TVs sold, that might be clouded by the economy this forthcoming holiday season. Several locales have already done tests and/or gone digital, including Wilmington, NC, which did so on September 8. Hawaii just announced they are cutting over on January 15, 2009.

· Blu Ray – It is encouraging to see that the recent release of Iron Man on Blu Ray set a record for the number of units sold in the format. Of course, the installed base for Blu Ray players is still but a fraction of the number of DVD homes and the number of TV households. Even with the $100 per unit reduction in price on its players that Sony announced recently, these challenging times may not bring a significant number of new sales, especially in the short run.

· Never going back – Often times there are trends and stats that we watch that say “never going back.” Among them was when sales of consumer digital cameras exceeded the sales of film cameras. The most recent is related to mobile device usage whereby more text messages are sent than the number of voice calls made on mobile devices. The forthcoming release of the G1/Android and its open systems will precipitate further changes within the mobile device/wireless industry. They may not occur instantly, but they will occur. Among the benefits that I foresee is the ability to increase the usefulness through the use WIFI or WiMax on the device, and to enable, for example, Skype calling, something that is prohibited on many mobile devices today.

· Tru2Way – On one hand, there are a lot of benefits to the various set top boxes that we all have – often in each room – for each TV. They are not needed everywhere in our opinion, at least based on our viewing habits. Thus, we applaud Comcast and Panasonic for their recent announcement of a limited roll out of this technology that enables premium cable programming on any network via a cable card, thereby eliminating the cumbersome set top box. ABI Research forecasts significant growth over the next five years for tru2way, reporting a few months ago that by 2013, 50% of all cable subscribers will have the technology.

As for The Shindler Perspective

Our consulting practice has kept us busy the past few months on an interesting array of projects. Some upcoming events that we want you to be aware of include:

Client Eyetronics is having a Show and Tell event at the House of Blues in the very near future. For those that may be interested, send us a quick email and we will send you the details.

Digital Hollywood is scheduled for October 27 – 30, 2008. Once again, I will be moderating The Arrival of 3D - Digital 3D Platform for Feature Films and Television, being held on October 28. The line up of panelists is one of the best that we have had in the five times that I have been involved in this event. We promise a fascinating discussion.

On October 29, 2008, I will moderate a Digital Hollywood panel entitled Looking to the Future: US-Korea Collaboration. A description of the panel and the names of the panelists are now on our site and will be posted to Digital Hollywood shortly. Roberta and I were in Korea recently for the Broadcast World Wide Conference where I was one of the presenters. Our several visits to this country tells us that collaboration may result in some very mutually beneficial scenarios to both the US and Korea.

The 2nd Annual Fresno Filmmakers Forum Conference has invited me to speak on October 24, 2008 on the topic of They Don’t Call it the Entertainment Business for Nothing.

Certain to be a premier event is the 3D Entertainment Summit, December 1-2, 2008 at the Century Plaza Hotel in Los Angeles. Click for the latest seminar and speaker information. Full two day passes for our clients, prospective clients and friends will be $975 (a $170 discount) if ordered by October 31 and $1,095 thereafter (a $250 discount). Please visit the 3D Summit website and use code SP.

We are always pleased to hear from our friends and clients. We look forward to hearing from you.

For The Shindler Perspective, Inc.

Sincerely,

Marty Shindler

Chief Executive Officer