SVGE Sit-Down: In-depth discussion with Presteigne Broadast Hire CEO Mike Ransome
SVG Europe recently sat down with Presteigne Broadcast Hire CEO Mike Ransome for a frank and wide-ranging conversation about the broadcast equipment rental business. Presteigne has been through plenty of twists and turns during its 23 years in the market – everyone knows about the acquisition of Charter Broadcasting in 2008 and the subsequent decision to close it earlier this year – and this provided an opportunity to talk about how the business works; the value of ongoing relationships; and the critical role of new technologies such as IP mesh and 4K that ultimately keeps a rental house on top of the game.
Mike we actually know each other from way back before Presteigne ever existed, when you were working for AVS Broadcast in the Eighties. AVS was a standalone standards converter manufacturing company then, if I recall: where did that technology come from?
Yes AVS Broadcast (where the Avesco brand comes from) was the first company. I had seven fabulous years there, as sales director. The two guys who designed the first 8-bit standards converter, John and Trevor, came from the print industry, computerised print. They were very clued-up engineers, and of course print was probably the first industry to move into digital technology ahead of everyone else.
They designed the converter, around which [Avesco Chairman] Richard Murray thought there was a future. He funded it and asked me to run the sales side, which I did for seven years. But in the end you could see that Avesco were not into manufacturing – it was going to be more about services as the group grew. In 1985 the group went public, to raise funds for R&D etc, so AVS Broadcast became isolated and I then left. I went to run the sales operation at Basys newsroom systems for two years.
After that, I was actually helping to run a company that rented test equipment, and they were in some trouble. It was going to go bust – it did go bust and went into receivership. The receiver just phoned me one day and asked could I help him, as he knew nothing about the equipment. So I went back, helped him, and in the end raised the money and bought the stock. And that’s how this business started as Presteigne. I needed a company name quickly and Presteigne was the only one available – and it stuck!
This was the early 90s and recession time, and I had a young family. It was a tough time; banks wanted you to sign your life away and give your house up and so on for a £10k overdraft. Then Richard Murray phone me one night – I’ll never forget it – and said would you be interested in selling the company and then coming back in to run it, as we need a rental company in the group? It really just blossomed from there. We built it up.
And here we are 20 years later. Let’s talk about where your business is now. What happened with Charter Broadcasting? Is Presteigne still in the OB business, or the project systems business – or have you gone back to your roots in equipment rental?
As a dry hire, RF audio and broadcast video business, we’re very successful and doing well. The one area we didn’t operate in was the large-scale projects business. We did all the fly-aways, and we still do. An opportunity to acquire Charter Broadcast came up, and through Avesco we made the acquisition. We perhaps made that acquisition without knowing totally how that business operated. That was in 2008.
The sheer amount of investment you have to keep putting into that business … for returns every two years [what Ransome describes as ‘odd years and even years’]. And of course you’re still carrying depreciation and the cost of purchase.
Even though we’re part of a public group our bankers are Avesco, and we go to them for money. We tried to make that side of the business work. It’s quite people-intensive. You also tend to find when you come around to say an Olympic Games you might be sitting here with a big 528×528 matrix which is more than capable of doing the job – but the customer doesn’t want this one, he wants that one. Then you end up buying that one and wondering, ‘how am I going to make it work next year?’
After five years we thought, this is just no good, it’s dragging the whole business down. We looked at all our overseas offices (which had come with the acquisition) and could see it was a business very much geared around projects, larger projects. So we just said No, we’ve got to think about the long-term future of the business.
We decided [earlier this year] to close Charter and it fell to me to do it – and I got on with it basically, although very difficult times because as you know this industry is full of gossip. But you can’t think of that; you have to plough on and put your business plan together and get your finance people to do the forecasts and projections. You’ve got to look at your stock and get rid of lines you no longer wish to carry.
In the meantime, with all that happening, we were talking to the BBC about Formula 1 – which is just up our street in terms of how it functions and the way it was to be built into special airline container systems and so on, it’s a moving circus and a four-year contract. Financially it made sense and we invested. A lot of distribution internally is fibre optic, just to cut down on weight because the cost of shipping around the world is phenomenal. And actually that’s what we’re doing now: we’re looking at designs in fly-aways and looking at all the new fibre technologies.
Let’s say we get asked to do a motor racing job in Eastern Europe. Most of the time it would be the case that the shipping costs account for 40% of the job. So the actual charge for the equipment is fair, and you’re going to get a return on it. But by the time you’ve added the shipping cost — the tendency is to take it off the equipment budget, which you really should not do as you want to give the best.
We’re looking at ways of reducing weights to give better value, and we have quite a few designs – and actually the equipment is out there now, 3G distribution fibre matrices etc, it’s there. We’ve now got to bolt all the pieces together, because some of the people providing those technologies are no longer your normal broadcast manufacturers.
It’s the same in RF, a business that has just grown and grown. There’s a lot more trust in RF technology than there was ten years ago. And now we have this mesh IP-type technology (we use Cobham Broadcast). The speed of communication, and no breakdown in communication – that’s the key. These days it works.
We also did joint bids with CTV on the Boat Race [for BBC Sport], which had traditionally been done by SIS for many years. We have Martin Sexton working for us, who joined us after 18 years when SIS [OBs] closed down. He put the designs together and we [successfully] pitched.
Since [taking the decision to close Charter Broadcasting] and backing out of these major events – we used to Roland Garros and Wimbledon tennis – since backing out, what I have seen is a good increase in business from the OB companies who don’t see us as competitors any more. Our relationships with OB companies are a lot better.
It’s a tricky balance to find, between the project-based business that’s reasonably stable and ‘booked in’, versus constantly running and gunning for every new job as a rental company. You’ve been through all those iterations…
Absolutely. And I’m hoping that we’ve got it right now!
For instance, we’ve just bought 4K technology. We’re building a 4K flyaway. We’ve gone for Sony 55 cameras, and the reason is that all the reports say that the 2/3-inch type 4K cameras, they’re not quite there yet. Because you don’t have the sensor size, you haven’t got the versatility. It’s fine for sport, but will the National Theatre or the Royal Opera House or the BBC Proms [accept it?]
I’m sure all these events will eventually have a 4K outlet. You will find that they will still want to use the bigger sensors. And what we’re finding is that with that sort of project, we’re dealing with the top-end DoPs. They’re more creative than, say, a producer or director on a football game…
We’re doing the Michael Buble concert in Birmingham [which took place in early December] in 4K. Our client is Visions. We’ve worked with Visions to give them a 4K edge to their standard 1080 OB production that they will do for the production company and the record company. Their view was, ‘you’ve invested in this and trained your staff, why don’t we work together on this element and you send your engineers?’
Unlike a 2/3 chip EFP camera, there are many different facets to a 4K shoot. You can come out RAW, you can come out on the back, you can come out fibre optically. You might want to come out with five cameras into a vision mixer (we’ve just bought a Ross Acuity vision mixer).
We’ve innovated in the past. We were the first company in digital RF, eight or nine years ago. You do well for say the first six to nine months, then other people jump on board. But we hope we’ve learned more than they have, and built more of a reputation.
In the case of 4K, I think it’s not susceptible to ‘let’s offer a big discount’. There’s an artistic side to it. They want to work with people who know what they’re talking about. That’s our latest move in terms of technology. And actually the versatility of the Sony 55 means we can hire it out as a single cine-type video camera, for a single day’s shoot. And we’ve bought a lot of the peripherals around it as well.
So there is a market demand for 4K, and it’s not necessarily in sports?
I think it’s more artistic at the moment. But I’ve read recently that sales of 4K TV sets are up 400-500%. People are just trying to future-proof. I think the time 4K will really take off in sport is when that set top box is available. And how are they actually going to do that, in terms of compression?
As a rental company I guess you have to scour the halls of NAB and IBC every year to stay at the forefront of technology. You have to gamble on certain technologies, or perhaps it should be called calculated risk? You’ve mentioned RF and you’ve mentioned 4K: what about IP?
Calculated risk. Yes we’re looking at IP technology – in fact there’s a lot of it used in the Boat Race. We’re looking at all of these things – but what we also do is talk to our clients. In terms of projects, we could have one of the larger OB companies come to us and ask us to look after an event. We’re not a threat to them anymore as we’re not an OB company, but they know we have (1) the ability and (2) the equipment. They can say, ‘put it together for us and that will be brilliant, one less thing for us to worry about’. So it’s all about working with our clients.
And are your clients are mainly the OB companies?
It’s everybody — sports broadcasters, news broadcasters, studios, OB companies, production companies, post houses — the whole wide range. We support the broadcast television market.
This summer was fantastic for us, with the World Cup, as we were supplying dry hire equipment to all sorts of people. We did half the RF in Brazil for HBS and Sony. We had a contract with Sony for three of the stadiums, supplying all the cameras, lenses etc. That was great. We don’t have that so much of that next year; we catch some of it obviously with the Rugby World Cup.
We’ve had a really good year, and we’ll have a good year next year; maybe not really good, but better than it would have been previously! Because we can manage the company better. Our specialty is rental. We live and die by our equipment decisions – but thankfully we get it right more often that we get it wrong!