PERG News: September 2018

| PERG News: September 2018 | 

Dear PERG Members and Associates,

In this issue:

• AICP and PERG Members to Celebrate Oktoberfest
• New Representatives to Join PERG Council
• Adapting to Disruption by Leveraging the Fleet
• Call for Submissions and Comment –2019 Digest of Fraud and Theft Prevention Measures
• Moving House, a Unique Opportunity for Re-invention
• Behind the Scenes Holiday Cards are Now Available!

Harry Box

Manager of the ESTA Production Equipment Rental Group (PERG)

AICP and PERG Members to Celebrate Oktoberfest

| PERG News: September 2018 |

The AICP and PERG will once again be co-hosting our Oktoberfest Party in New York on Tuesday, October 23rd. Invitations are now being sent to PERG and AICP members via Eventbrite. If you are a PERG or AICP member and wish to receive an invitation, please contact the PERG Manager.

This will be the seventh year the two organizations have celebrated the New York production community over German sausage and beer. Last year the event was attended by about 250 people and the same is expected this year. The event has proved to be a great opportunity for networking and a good time for members of both organizations.

The event has earned strong support from event sponsors—many of whom do business with local AICP production company members—as well as PERG’s annual sponsors. One sponsorship is still available. Please contact PERG right away if you are interested in helping sponsor the event!

We look forward to seeing you there!

Sponsoring the AICP PERG Oktoberfest event is one of the ways our sponsors say thank you for your business.

New Representatives Join PERG Council

| PERG News: September 2018 |

The PERG Council is delighted to announce the addition of three new rental house representatives on the council. 

• Jim Martin, Chief Strategy Officer, SIM Digital, Los Angeles 
• Anna Mayo, CFO/Owner, MP&E Cameras and Lighting, Dallas 
• Sally Spaderna, Rental Manager, Koerner Camera, Portland 

The decision to confirm three new council members comes as two long-time council members come to the end of their terms. Debby Miller, Midtown Video, Miami, and Mark Wofford, PC&E, Atlanta will be stepping down at the end of 2018. Debby and Mark both made significant contributions to PERG’s growth and development over the past several years. The ESTA staff and fellow council members are grateful for their thoughtfulness, generosity, and sense of humor. 

This summer PERG issued a call for nominations for participation on the PERG Council. The council attempts to maintain diversity and have balanced representation geographically and by type and size of company. Jim Martin, whose responsibilities have included opening SIM’s offices in Toronto, Atlanta, and Los Angeles, brings 30 years of experience that includes, lighting, camera, and post production. Anna Mayo, who is a CPA, with prior experience in the insurance industry, and ten years at MP&E, has helped the lighting and camera company grow into locations in Dallas, Austin, Denver and Phoenix. With five years at Koerner Camera, Sally Spaderna heads up the Portland office. Koerner Camera—host of the 2018 Lens Summit—has offices in Portland and Seattle. The council looks forward to working with its new council members as PERG continues its mission to promote the interests of professional rental businesses, shine a light on issues that affect everyone, and be the voice of the rental industry.

Adapting to Disruption by Leveraging the Fleet

| PERG News: September 2018 |

By Jeff Tanenbaum, Tiger Group

The production equipment rental space is as dynamic and competitive as ever. That means it is imperative to efficiently and methodically leverage the value of a key asset—the equipment fleet. But disposing of excess inventory can be challenging and time-consuming. While digital sales channels like eBay or production-specific marketplaces are easily accessible, they generally represent management-intensive and less effective ways to dispose of equipment than working with asset disposition professionals. From a competitive standpoint, companies should focus on what they do best—renting equipment—not on racing to recycle that equipment online before it loses its value. 

[See related article, To Buy, or Not to Buy: Thoughts on the Analysis of Capital Purchases for Rental Inventory, by Joel Ordesky. This article ran in Spring 2016 issue of Protocol, the quarterly journal of ESTA.]

Many of the top names in the business, including the likes of Sony, Keslow Camera and Otto Nemenz, have leveraged disposition professionals for precisely this reason. Certain niche players focus specifically on selling pro-grade production equipment via global networks of regular buyers. In addition to recouping the maximum value for older equipment, these companies can also leverage their buyer networks to help clients find deals on new acquisitions. They are constantly engaged in list building and outreach campaigns to cultivate new buyers and sellers. Unlike many rental companies, disposition professionals have the time and resources to send emails and make phone calls to prospects domestically and internationally. They’re also experts in staging and marketing auction events and can feature equipment in “conglomerate auctions” with inventory from multiple sources. Some of these specialists also appraise equipment for lending purposes and/or provide the capital needed to make specific acquisitions, such as a specialty package for a key client.

For example, when Keslow Camera acquired Clairmont Camera and its Canadian operations in Vancouver and Toronto last year, the move more than quadrupled Keslow’s anamorphic and vintage lens inventory and added a substantial range of custom camera equipment to its portfolio. Naturally, it also led to some equipment redundancies. Selling that inventory to a third-party company helped provide significant operating capital to Keslow. The disposition company was then able to both auction the equipment on its own timetable and sell it directly to local, domestic, and international buyers on a private treaty basis.

Disposition professionals also work in creative ways to contribute to a company’s strategic efforts. For example, acquiring certain trade-in equipment from a major manufacturer at a locked-in price, supported that company’s ongoing trade-in program, which encourages customers to turn in old gear and buy newer models.

As technology has rapidly changed, the ability to recycle equipment has become important. Six to ten years ago, many rental companies saw the writing on the wall and made the decision to divest their classic film equipment—some selling their entire fleet. They wanted an expedient market sale to reduce the size of their film-based fleet, given the risks of rapid depreciation. In many cases, those sales were done by a third-party company that offered a fee-based solution.

The march of technology stops for no one. With more widespread adoption of large-format cameras, the industry can count on corresponding changes in customer demand and legacy equipment value. As the utility of vintage PL-mount lenses diminishes, it will be too problematic and costly for cinematographers, studios and rental houses to suddenly switch their entire fleets. These lenses, in other words, will retain value … for a time. Disposition professionals with substantial industry expertise and buyer connections can help companies discern the depreciation timeline and stay ahead of its curve. These companies’ ready access to global markets is part of what makes this possible. Currently, disposition companies are selling directly into China and India at a far greater rate than in the past and are cultivating relationships with specific, routine buyers. This represents a tremendous resource for sellers.

For third-party professionals, tasks such as finding new markets and buyers, understanding price points and establishing sale timetables to maximize results are all part of the job. This proactive, engaged and multilayered approach is far different from, say, posting equipment on a marketplace website or eBay. As PERG’s members continue to contend with tough competition and rapid change, their strategies will benefit from the suites of services available from niche disposition professionals focused on the production equipment space.

###

Jeff Tanenbaum, CAI, is an Executive Managing Director at Tiger Capital Group. Jeff has more than 30 years of experience in the industry and is a veteran auctioneer and liquidator. He is based in Westlake Village, California. jtanenbaum@tigergroup.com. soldtiger.com

Call for Comment – 2019 Digest of Fraud and Theft Prevention Measures

| PERG News: September 2018 |

Have your experiences given you new insights into security measures or fraud prevention? We’d like to talk to you! We are currently actively seeking input for the 2019 edition of the PERG Digest of Fraud and Theft Prevention Measures. Theft is a constantly evolving topic, and PERG is continually gaining additional data and insights, so PERG has committed to updating the Digest on a two-year cycle. Please contact the PERG Manager if you have a topic, tip, or precaution to contribute to next year’s edition! 

The PERG Digest leverages our industry’s collective knowledge to provide our members with a unique resource. The Digest is informed by real-world, industry-specific incidents collected by RENTAL GUARD from hundreds of thefts between 2014 and the present. It also includes input from rental houses, law enforcement, insurance underwriters, brokers, and security experts. The document describes procedures and security measures that have been found effective. It is intended to help rental houses consider potential security weaknesses, train staff, and respond in the event equipment is stolen. Your contributions help harden our industry against these continual losses, making the Digest a truly invaluable industry resource.

Comment or contribute to these existing topics or suggest others. 

• Assessment of new customers 
• Verification of the rental application, insurance and payment method 
• “Slow Down” strategies 
• Red flags 
• Insurance issues 
• Alarms, camera systems, notification systems and other physical security measures 
• Theft during transport 
• What to do after a theft occurs 
• How to ensure that law enforcement takes action 

The Digest is provided free for all members. Non-members can receive the Digest with any donation of $100, which goes to support RENTAL GUARD. Please visit our GoFundMe.

Moving House is a Unique Opportunity for Re-invention

| PERG News: September 2018 |

Opening in a new space, whether by moving the business, opening a satellite location, or building a new building, opens a world of possibilities and challenges—branding, operational efficiency, client interaction, physical security—everything gets new consideration. I toured the facilities of four PERG members who recently moved: Rule Boston Camera, Arri Haus Brooklyn, Abel Cine (Industry City Brooklyn), and JR Lighting (Las Vegas, NV). They spoke to me about their projects.

In January 2018, when Rule Boston Camera moved the business to a beautiful 1867 brick factory building, with its high ceilings, large windows, and stout timber posts and beams, the camera rental company gained more than just a new location. A year previous, as their lease approached the end of its term, the company had no idea of moving out of their location of ten years. But when their landlord failed to provide reasonable terms, the company was forced to consider their options. It was at that stage that John Rule, the company president, realized a move could provide the company an extraordinary opportunity to reshape itself with an eye to the future, creating a customer experience tuned for a new generation of filmmakers while taking everything learned from their previous location and improving on it. more...

See the full article in the Summer 2018 issue of Protocol, the quarterly journal of ESTA.

Behind the Scenes Holiday Cards are Now Available!

| PERG News: September 2018 |

Order Personalized Holiday Cards by October 4th!

Holiday Cards can be ordered three ways:

Personalized Cards:
Customize your cards with your company name, logo and greeting. Personalized cards are available on orders of 250 or more cards (increments of 50). The deadline to order personalized cards is October 4th. Click here to order.

Card Packs:
Don’t feel like customizing? Need a smaller quantity? Each card is available in packages of 10. Order by October 4th to ensure on time delivery. Click here to order.

Electronic Card:
Prefer to send your holiday wishes via e-mail? All card images are available electronically and can be sent to you as a PDF, JPG or GIF file.Click here to order.

You can also download the Holiday Card Order form (PDF) and fax or email it in with your payment.

Behind the Scenes provides financial support to entertainment technology industry professionals when they are ill or injured or to their surviving dependent family members. Funds can be used for medical care, basic living costs and funeral expenses. Behind the Scenes brings help and hope in times of great need. Learn more here.