For most of my life, I have been involved in the technology for media and entertainment, e.g. for film and TV. In the good old days when everything film was chemical, two companies became the market leaders in their field. Panavision and Moviola. As I was driving past Panavision's HQ, about a mile from my house,  it struck me how these two companies selected business model made one flourish and one die. 

Panavision makes the cameras and lenses that was used for virtually every Hollywood movie from the mid-50s until movie cameras become digital some 7-8 years ago. The same movies where edited on Moviolas. 

From a product sales perspective, the Hollywood industry is pitifully small. There  is only a handful of studios, only several dozen, maybe 100, of production and post production companies.

Moviola was first to market of these two, and over a relatively short period of time, a dozen year from the mid-30s to the late 40s, filled up the market. Sold a couple of hundred editing machines. These film editing machines where build like tanks, and built to last a lifetime. And they did. So with the market filled up, the company's business collapsed. Production stopped and what was left was just a very small spare parts business. 

Maybe wise from this, Panavision took another track. They decided never to sell the camera and lenses. Just rent them out. So for just about every movie that was made in Hollywood for about 50 years, Panavision got a revenue cut. It created an ongoing revenue stream.

The media and entertainment are said to be among the most unsophisticated when it comes to pricing -, and I can vote in agreement for that. There are oodles of companies trying to get a share of a small market - often with products that are highly complex, with large development costs and therefore high prices. Yet, they have not learned from the Panavision and Moviola story. Nobody sees the opportunity to go to market by renting out their products, or selling a subscription, or pay-per-use. And oodles of companies in that the industry are struggling. 

And what would you do, if you, like so many, are selling a product into a small market. Just sell sell and sell - or think outside the box? It may be worth wile!

 

 

With summery regards, 

Per Sjofors

Founder/CEO

Posted
AuthorPer Sjofors