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No Fear

August 19, 2009

This article originally appeared in Film Festival Reporter under the byline William Ling.  Since then much has changed.

On a cold winter morning, November 218 B.C., the sleepy little village of Ticinus, nestled deep in the rich plains of Northern Italy, awoke to the rhythmic thuds of elephant hooves and clattering frame-drums, and a cacaphony of angry taunts from a marauding army that wanted more.  The circus had come to town in the form of a twenty-nine-year- old upstart named Hannibal Barca and an unlikely amalgamated army forged of Carthaginians, Gauls, Iberians, Tartessians and Celtiberians, who, while the Romans protected their existing trade routes with a fleet of 220 ships copied from Carthaginian design, stormed into Italy over the treacherous mountain passes of the Alps.  The impossible had slipped to become merely the unthinkable and for the next twelve years nothing in Italy could be taken for granted.

Centuries later, pimple-faced American teens are poring through the latest Motor Trend magazine lusting over the rocket-powered, kinetic, sculptural forms of Ferrari, Lamborghini and Maserati, all descendants of the survivors of those conflicts, mere fantasies for all but the few who can afford such playthings, ironically either the sons of slaves, (now NBA stars and their rapper cousins), or the sons of their masters and their master’s masters, forever with the inside track.

Perhaps there is some better, targeted way to reach the few, financially-able, qualified buyers than to distribute millions of magazines to every subscriber, convenience and grocery store, pharmacy, bookstore and airport news-stand on every continent.  Who are these magazines selling to and what are they selling?

To be certain, American males are romantically groomed to consider themselves great drivers but only a very few professionals can actually drive these high performance automobiles at levels approaching their limit, much less meet the financial standard for a test drive.  Nevertheless, who doesn’t dream of possessing a Ferrari?  While recognizing the prohibitive cost of hand-built, high performance vehicles, every automaker has consistently addressed high performance issues and Euro-styling at modest to reasonable price levels.  Whether Hyundai, Kia, and Saturn or Audi, BMW and Porsche, Corvette, Mercedes or Toyota no manufacturer ignores styling, handling and speed.

Right now, somewhere in Anytown USA on the way to Main Street there’s a 20-year-old fast-food clerk racing that next stoplight to work, cutting off a smug divorce lawyer, blonde hair gently blowing, in her polished silver SLK, by wrestling a whale-tailed Subaru Impreza, sporting a “No Fear” decal on the rear window, through three lanes of rush-hour traffic. Were it not for the heat-generated yearnings created by publications featuring unattainable dream cars, he’d still be on his mo-ped. This is American marketing at its best.

What makes this possible is strictly a numbers game.  Limited-production run and hand-built units carry an added cost to the purchaser that mass-produced units do not, as anyone who has priced a mattebox can tell you.  Who in the production community, whether accountant or camera assistant, hasn’t looked at a mattebox priced at $2500 and said to themselves “this ought to cost about $150” ?

But mattebox pricing does not even begin to touch the barrier to entry for camera ownership.  Exotic camera systems, whether film or HD, like their automobile counterparts, can run as much as a half million dollars and up and great glass can run $40,000 and up for a single prime lens.

Take Carl Zeiss as an example.  Here’s a company that makes lenses for a wide variety of applications, including the current incarnation of digital-backed Hasselblads resolving 4880×5440, delivering their lenses at street-prices averaging under $5,000.00.  While this is definitely the high end of the digital still market, and acknowledging that film and HD lenses must meet different standards for performance and use, we must recognize that still images undergo more careful scrutiny than any single film frame ever does.  So why does this same company sells its film and HD lenses, cine-lenses such as Digi-primes, at dramatically different, performance-car level prices.

Is the glass really that much better in cine-lenses?  Certainly a cine-lens has to meet more demanding standards, and we all know what they are, but the real cost for these lenses is a marketing issue not a manufacturing issue.  You can only sell these lenses to people who own cameras, and that market is further subdivided by the number of lens manufacturers selling to them, let’s say 6 total, and that is further subdivided by users that repurpose existing glass or buy used glass.  Now there’s our reality check.  So let’s look first at how many cameras are out there.

As of 2 years ago, Arriflex, perhaps the leading supplier of 35mm film cameras for purchase, has only sold about 670 35mm cameras total from Day 1… that’s all flavors, worldwide, from the IIC forward in time to present.  The why of it is yet another reality check.  Hollywood made only about 280 films last year, 200 of which were major studio productions.

HD looks a little different. Lets take all the cameras in all the rental houses, broadcast facilities, TV production and regional commercial production companies and add them all together.  The numbers I am about to use are “educated estimates, since none of the manufacturers want to reveal the real numbers, and when and if they do discuss numbers casually, in passing conversation, they are usually inflated for promotional ends.

Sony has sold about 2000 units (possibly more) of various iterations of CineAltas since George Lucas first lensed “Star Wars: Attack of the Clones”, and Panasonic, while currently outselling Sony at a rate of something like 8 or 10 to 1, has still only sold about 1000 VariCams (perhaps less) total in 6 years.  As we go higher in price, usually measured in this industry in resolution, the numbers drop significantly.  Vipers  at $170,000.00– maybe a hundred produced, if that.  The Panavision Genesis, as a rental item only, probably under twenty and about the same for the Arri D20 (although Arri claims 50-60), originally priced at about $550,000.00, then retracted from the market and slotted as a rentals-only camera. And then consider the rarest of beasts the 4K mini-refrigerator-sized Dalsa–under ten units.

Still, Zeiss has probably sold about 1000 Digiprimes (lenses not sets)– an astounding feat considering the above numbers.  But compare that with Nikon or Canon who must have sold about 6 or 7 million lenses to still photographers since day 1 and pretty soon you understand the difference in pricing.

With that in mind, let’s consider the manufacturing and marketing of digital cinema cameras, all lumped together as simply HD.

The technology to build a digital cinema camera is well known.  It’s no secret.  It is basically the same as a digital still camera with a buffer and enough storage to allow it to capture images at 24fps and other frame rates.

Marketing poses the real problem.  It must be frustrating to the Japanese designers of cameras to be hog-tied by their American counterparts in marketing.  The problem that immediately comes to the forefront is this.  If they introduce a new high-end camera with all the features that clients ask for, then that camera must be priced in such a way as to not disturb all their other, existing markets, namely the other cameras in their product line and those cameras just recently sold to rental houses as well as other clients.  Excluding pricing pressure from the competition, they must protect the profitability of existing lines and the equity in their client’s recently purchased units.  If a significantly better camera were to be introduced at a considerably lower price, then all other lesser cameras would have to sell at a cheaper price and the customers who just bought them at the higher price would be very upset.  Changes in the upper limits of pricing ripple downward causing shifts in the pricing of not only 25 and 50 megabit broadcast cameras but all existing HD cameras.  The units on rental house shelves would not necessarily become immediately obsolete, but certainly, quickly unprofitable.

Now consider that this very small industry (a few hundred hi-end digital cinema cameras a year) is perpetuated because it is the necessary fuel that drives the real profit-making vehicle, consumer electronics.  Without great looking content, without imaging advances in digital cameras who would buy new displays to have a viewing experience limited by inferior cameras?

So, if American marketers are thinking inside the box, it is because they all live inside this box.  This is their reality.

But what if you don’t live in this box.  What if you don’t have an investment in an existing product line that you must protect.  What if you don’t have a single camera or lens sitting on a single shelf in any rental house anywhere in the world.  What if you have no track record manufacturing cameras, in fact have never sold a single product to the film and television industry.  Could you design and manufacture a camera that offered features that surpass most, if not all, existing cameras and deliver that camera at a pricepoint just under professional broadcast cameras, but just above pro-sumer, say $17,500.00–a far cry from a half a million dollars?  Current manufacturers say “impossible”.  Furthermore, who would buy these cameras from a company without an industry track record?

Perhaps the naysayers have been looking at the wrong numbers.  For a moment let’s take a side-step into the world of post-production.  In 1989, when Avid Technologies came out of nowhere to put a non-linear edit system based on the MAC platform in front of NAB attendees, the standard in post-production was still multimillion dollar machine-to-machine editing. By 1994 when Avid had rightfully assumed its place as the new standard, it was selling a software-based system with inexpensive hardware at about $120,000 per unit.  Around that time Apple introduced Final Cut at a cost of about 1% of an Avid.  Many scoffed then, but amazingly, today, as Canon, Panasonic, Sony and JVC sell tens of thousands of inexpensive HD cameras, and ignorant nay-sayers continue to rebuke Final Cut as a consumer software program, there are millions of bedroom and office based editors and working pros cutting away on Final Cut Pro HD while upgrading both their computers and their cameras to match the sheer power of what has become not only the new standard, but with the introduction of Final Cut Pro 6 and Studio II, possibly the most aggressively advanced software for editing, ever.

As to those 200 Hollywood A-list films, compare that number with the over 3200 entries to Sundance this year competing for 145 slots and you may begin to understand the market.  Those 3200 entries do not even reflect the entire indie market, just those able to get it together in time for this year’s entry deadline.  Considering the cost of a Red One camera to be about the same as a modest Hyundai luxury sedan, it might be fair to say that it is well within the reach of any festival junkie, local production company, commercial photographer, film school, corporate entity or their ad agency to purchase and put to good use. And when you consider all the regional film production companies who own PL mount glass, ready to be “re-purposed”, the cost to enter the highest realm of digital acquisition is not an issue.

Giving new meaning to the old adage, “When you ain’t got nothing, you got nothing to lose”, having no existing markets to protect, Red Digital Cinema introduced the Red One Camera, no mere Hyundai but a genuine Ferrari, at a price-point of $17,500.00.  In the short time since its introduction at NAB2006 until October 31st of that same year, with little more than a few illustrations and a promise, Red has sold over 1000 units to willing buyers who have each put up a $1000 down-payment to reserve their place in line.  Was that an elephant I just heard?

Ironically of those 1000 units, many are being sold to rental houses, who, like everyone else, were limited to a mere 5 units each.  Conventional wisdom says that if that same camera were offered at that same price by one of the big existing manufacturers, these very same rental houses would be screaming because it hurts the rentability of their existing lines.  Furthermore, at such a low price-point it is hard to maintain a rental business if the camera is easily purchased by their clients.  Consequently, had this been introduced by say a Sony or a Panasonic, it would have bred much ill will.  But demand is so great for these cameras that Red introduced an “encore” offering to purchase either cameras or lenses from January 21st to the 24th, for those that missed the first round or want to increase their order.  Truth be known, no one wants to be at a disadvantage. This brought total sales up to, just shy of, 1500 units.

Today, most camera systems still perform well enough to exceed most displays.  Imaging for either, is usually evaluated in certain terms:  Resolution, sharpness, color rendition and dynamic range and until now, developments in cameras have been leading the way.  But with very little in existing markets to protect, digital projection has temporarily surpassed digital acquisition in certain ways, tipping the manufacturers’ hands about both their capability and what will soon be our glorious imaging future.

Two notable events speak volumes.  Panasonic has introduced a home theater projector that delivers an astounding 11,000 to one contrast ratio.  That’s fifteen stops, only two stops short of the working range of the human eye but 4 more than their best camera. Film projection can only reach 9 stops.  And Sony is offering a professional projector with 4K resolution.  Even this small bit of information is telling, because Sony has always maintained the battleground as resolution, while Panasonic has wisely continued to pursue dynamic range.

In the current climate of evolving markets the overall change to digital production may take ten years or so.  Digital intermediates have been long recognized as advantageous, but digital acquisition has not been widely accepted yet in advertising and the majority of big budget studio productions.

With digital projection in home theaters surpassing film projection, the pressure will be enormous for movie theaters to make the long awaited change to digital projection or die.  If all they can do is deliver the same image quality as Mr and Mrs. Consumer, what’s the point?   4k resolution with 15 stops dynamic range may become the defining standard for reviving the sagging theater industry by providing a unique viewing experience.  Who will provide the cameras?

The answer to that question came from an unlikely source.  Jim Jannard, founder of Oakley Sunglasses and self proclaimed “Photo Fanatic” recognized the problem and wanted to see it move more quickly to a satisfactory resolution, simply because he wanted a better camera, and nothing was available to meet his standards.   After reviewing the situation he decided to build it himself and formed Red Digital Cinema.  First hire was Ted Schilowitz, formerly of AJA followed shortly by Stuart English, recently of Panasonic.  Joined by Graeme Nattress and many other fine engineers, they set about solving their first problem, selecting the sensor.  Again unable to find what they wanted, they decided to produce their own and developed the “mysterium”.

Not resting on their accomplishment, this non-hierarchical team of risk-taking, out-of-the-box, nay out-of-the-office, boardroom-and-all-things-corporately-restraining, thinkers, with titles like “leader of the rebellion”, “workflow wizard” and “problem solver”, elected to build their own lenses, first offering an 18-50mm (variable prime) zoom and a 300mm telephoto at affordable prices and then by NAB following that with a set of 5 primes for just under $20,000 which might pay for half a lens in any other manufacturer’s prime lens lineup.

Ted Schilowitz finds the resistance of all the nay-sayers “intriguing, not a bad thing because it motivates us to question ourselves.  There is no scientific or valid reason that we cannot accomplish our mission.  Fear of market change is a psychological barrier that we empathize with, but without change we would never have had the airplane, gone to the moon, had computers, iPods, plasmas or any of the many other wondrous inventions we all enjoy” and the approximately 1500 filmmakers who have made their deposit to purchase a Red One agree.  Ted finds validation in their confidence, but more so “it benefits our team to know that we are building this camera for people, not for a marketing department”.

“Changing the landscape” is a treadworn phrase that has already been resurrected several times to describe the effect that the introduction of this camera will have on the industry, but it nevertheless remains, ultimately, quite true.  Just as the virgin woodlands have all been cleared from the plains, and corn, a known commodity, was planted to feed our masses, so too, our cinema landscape will be cleared and a new standard for imaging will be widely planted.

The other manufacturers will have to respond to the introduction of the Red One in some competitive way, unfortunately and most likely, a measured response.  This may well be too little, too late, lest they, like the Romans of 200 BC want to fight an uphill battle for the next twelve years with an Army riding bright Red elephants.

Addendum to the original article:

Since the time this article was first written, Red has taken prototypes of the Red One camera to NAB.  There, together with the prototypes, they screened a short film shot by Peter Jackson a mere two weeks before the convention.  Projected on a 4K projector in a small screening room within their tent, the imagery was nothing short of stunning.  A line waiting to get in, three-people-wide, constantly surrounded their booth and the entire “block” their booth was on.  By the close of the convention they had sold more cameras than the combined total of all Cine-altas, VariCams and 35mm Arriflexes ever produced!  Additionally, mid-week in the show Red announced that they will be manufacturing a small hand-held camera they call the professional pocket camera, 4K displays and a 4K projector.  Further sweetening the ever-burgeoning Red battle wagon, Red has acquired Accu-cine, makers of the definitive color viewfinder, in order to bring the prohibitive $14,000 price tag down to the manageable Red price of $2950.

And today Red continues its development plans with a new line of totally modular cameras, Epic and Scarlet as well as many new lenses.  Complaints concerning the Red One abound, still it is revered by the faithful for being the prophet camera that it is.  Users willingly over look issues such as heat, audio problems, workflow, and CMOS rolling shutter limitations causing flashbanding and skew.  The coming cameras remain a mystery (they have aptly named their new chip “The Mysterium”).  While the film world waited to see if the Epic would fulfill the promise of matching film with perfected digital acquisition, Red expanded it’s line with a full range of Epics, going beyond reason to include a camera with a chip so large that it resembles a candy bar in size.

Meanwhile the flood of Red One cameras sold to amateur “DP’s” who package themselves with a camera “for free” has eroded the rental market and produced little more than a mountain of unusable footage with serious focus issues.

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