How to Survive a Market Collapse: Reinvent Your Business
When you walk into the East London courtyard where Splice TV is based, the street sign says everything you need to know about this business: their address is 21a Perseverance Works. (That's the name of the development, a hub for creative businesses.) Video editors Damian Dolniak and Duncan Western took a leap of faith in 2003 to set up their own television post-production business. At the time they had no confirmed bookings from clients; friends said they were mad. They started with a single edit suite (a rentable space where TV producers come in to edit their shows), and quickly grew to three suites. In 2007, they moved into their current building, with a dozen suites. Not long after that, the advertising downturn hit -- TV budgets were slashed, and London's post-production sector has been fighting for survival ever since. Splice could have easily gone out of business, but instead Dolniak and Western made some significant changes to what they do. I met up with Dolniak recently to find out how a small, single-focus business survived one market's near collapse.
Dolniak explained that twelve months ago, Splice's core business was providing edit facilities to television producers. But with budgets cut and new technology now making it easier for TV producers to edit in-house, the sector's livelihood has been severely threatened as providers undercut each other to get deals. "The current business model of post production doesn't work," he acknowledges. So Splice has had to diversify into more future-proof services: namely those that require greater specialized knowledge. This includes storing, archiving, and distributing digital video files for TV and film companies.
Having undergone a period of change to beat the market challenges, Dolniak came up with three key tenets that helped them stay afloat:
- Re-invent. If they'd stood still as a straight post-production house, Splice would be out of business now. So they've reinvented themselves, diversifying into new areas. Dolniak acknowledged that this has been a massive learning curve, but a necessary one.
- Spread the risk. Rather than offer one service that could be affected by a budget cut or downturn overnight, Splice now offers a portfolio of services. So if one gets hit, they have others to fall back on. "While you don't want to be jack of all trades, you can't just do one thing either," Dolniak says.
- Share roles. Dolniak and his partner, Western, share the role of managing director. Both partners find they need to stay hands-on, so when Dolniak needs to dive in and focus on technology or investing in a new piece of equipment, Western can handle other management duties.