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"On paper we're in good shape,
but people are either not paying
their bills or they're slow
payers . . ."
— Larry Lippman
Design Effects
^
REASONS FOR OPTIMISM
Sales volume of labs and services during 1970 was diverse. A number oi companies reported comparative increases from \9M. ranging from 10 to 50 percent. Others felt the full impact of the recession, and called 1970 "a disaster."
In some markets, although business had fallen off, volume continued to flow from other sources — and in a few cases, it matched the previous year. One laboratory operator reported that in an effort to become more competitive, he had reviewed costs, and subsequently
solved his problem by eliminating a third shift.
On the other hand, VPI Services, a laboratory in t)peration less than three years, described 1970 as "fantastic."' The company's sales volume doubled that of the previous year.
The year was also a gotxl one for Consolidated Film Industries, who reportedly did more feature pictures than ever before, while the number of industrial non-theatricals they produced remained about the same.
Business remained at an equilibrium throughout 1970 until the last
"You never know when you're selling
them, whether they have an
account or they're submitting
a pilot."
— Miltor\ B. Kaye,
General Manager
Musicues Corp.
quarter of the year, reported an audit) sound company spokesman. During that period and the first month of 1971, he estimated, an in crease in volume took place of from 15 to 20 percent.
Thirty percent of the labora tories responding to BUSINESS SCREENS survey described 1970 as "lousy" and "a dLsaiter." To them, the 1971 outlook appeared grim, with any future increase in business coming as the direct result of political oppt>rtunism or a shift in the economy.
This group was outnumbered, however, by an optimistic 70 percent. The majoritN of companies were enthusiastic about the outlook. Basing their opinions on an upturn in business in January, their reacUons ranged from "things are virtually back to normal" to "everything is becoming wide open."
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CONTINUING INVESTMENT
Despite slower volume and poor cash flow, film laboratories have necessarily continued to invest in equipment.
As one lab spokesman indicated.
"You can't take old equipment and speed it up because it will shake itself apart."
Raising investment capital, however, has become a major challenge
"In the not too distant
future, we ourselves
should be in tape
duplication ... we
think ta()e
Is going to t>e a stimulant
for the total visual
market."
—Neal Keehn,
Vice-President
De Luxe General, Inc.
22
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for most labs. Some have utilized long-range financing at high premium rates. Yet. unless business im(■•roves considerably, this may only perpetuate a bid situation.
In addition to problems of raising capital and receiving slower payments, laboratories have experienced the rising costs of re-equipping.
"It's a great deal more ex[X'nsivc to update equipment than it was
"Competition forces you to have the best product at the best price."
— Byron Roudabush, President Byron Motion Pictures
"We expect an avalanche of
business from educational
sources."
— Alfred Bruch, President
Capital Film Laboratories, Inc.
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BUSINESS SCREEN 1<^I|
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