Projects Don’t Build Businesses | Jon Morgan

I could hire a director, I could hire an editor, I could hire a shooter, I could hire a gaffer, I could hire all these other positions in my creative production, the creative production video production process. But the one that I couldn't, you know, the one that I couldn't hire was bringing in the projects and managing the business.

Welcome to another episode of The Profitable Creative, the only place on the interwebs where you will learn how to turn your passion Into Profit. I am your host, Christian Brim. Special shout out to our one listener in Arvada, Colorado. I heard that and I automatically thought carne arvada, but that's New Mexico, not Colorado. In any case, thank you for listening. Joining me today, John Morgan of Arrival Studios. John, welcome to the show.

Yeah, thanks, Christian. Appreciate you having me on. So looking forward to talking about creative business stuff.

Well, you are the expert on it, so I want to hear how. I want to hear how. Um, so give us the brief CV, you know, what, what you've done, your, your journey as an entrepreneur.

Sure, that's quite the interesting journey. Uh, so I'll kind of stick to the high level of it, but, uh, got my start in digital media, creative, you know, video and all the things, uh, back in high school. Took some digital media classes. I believe it was freshman, sophomore year of high school. So, that's when I learned the basics of video but also some graphic designs, photography. I knew I had a creative eye but never in my wildest dreams did I actually think I'd ever pursue a career in it. And so, as high school went on, I continued to just keep it as a side hobby, friends and family and little summer jobs and stuff like that. Making a little bit of money. And then throughout college, my plan was to be a pastor and a counselor and felt like God was calling me to ministry. And so, I was pursuing that formally with psychology and Christian studies as my degree and minor. And then, again, continued to do some AV video stuff in the summer kind of here and there. And then, met my wife end of college and then that's of course where everything changes.

Yeah, she said, "I don't want to be a pastor's wife" is what she said.

Not quite, not quite. She was at least open to the idea initially. And so, I finished school. I was down in Mississippi. She was up here in St. Louis. And so, we did the long-distance thing for a bit until we were engaged. And then, when I finished school, then I came up here to St. Louis and couldn't find a church job. And just applying and nothing's working out. Grad school plans weren't really working out the way that I had hoped. And so, I took the only job I could get was at a plastic manufacturing company with my father-in-law. So, her dad worked at a company and created a quasi marketing sales creative position for me. So, it was a little bit of everything from making cold calls after trade shows to doing marketing slick and some website and photo and all of that. So, That kind of got me back into the creative space and mindset. And so then, I did that role for about a year and a half, give or take. And, that was the summer of 2015. And then, the company was downsizing and we both ended up getting let go. And—

You got your father-in-law fired? Is that what I'm hearing?

No, he was technically first to go and then I was second to go. So, little-known fact, I actually took his job for about 2 months and it was really awkward.

How does he know this?

Yeah, he does. Okay. So, that kind of dumped me on the doorstep and the reality of what it's like to get laid off. And, I didn't really have another plan, so that was September of 2015. And so, without telling anybody, I decided just to start my own business on a whim and see if I could do something with it and came home and told my wife that, "Hey, I'm a business owner now." And, Initially, it was just intended to be a stopgap until we found the next plan or I found and figured out the next plan because my wife was teaching at the time. And so, there was a little bit of a time period we're figuring out her career as well. So, I was like, "Okay. Well, let me just try this freelance thing and I've developed some skills and see what I can do with it." And so, I initially was starting out doing everything. From logos and websites and photography and video and just all the creative things. And then, about 6 months in, no other jobs were really panning out. And so, I was like, "Okay, I need to figure this out. I'm either going to really make a go at this business thing or I need to just hit the U-turn, make the U-turn and get out before I get in too deep." So, I bravely or naively, one, decided to Both. It can be both. It's an equal combination of both, okay? You got to have brave, you have to be brave and naive.

You're brave because you're naive.

That's the way I remember. Right, right. If only if I knew what I was getting myself into, I might not have done it. So anyway, I took the plunge, but I realized that I needed to focus on something. I wasn't doing that well doing everything. And so, that was when I decided to shorten my name at the time was JM Film and Design. So, I lopped off the design part, just focused on video and called myself JM Films. And so, then that began the journey of becoming a corporate video production company. And again, no entrepreneurship experience, no real business experience, just learning everything from school of hard knocks. And so, I worked with some business coaches and consultants along the way at different points just to help me learn business and stuff my face with as many business books and sales books as I could read. Because I quickly learned that if you don't sell, that you go out of business.

Yes, it's, it's a short tenure if you don't sell.

So I realized that I had to get good at sales and get good at business if I was going to stick around. And then as things grew, I decided that it was, it was a better, better model for me to start bringing in other people into the productions who were better at different roles than I was. So I was shooter, I was editor, I was, you know, everything. And, it just was not— I mean, I was doing good so to speak but not really great. And so, that's when I started—

It's kind of hard to hold that boom mic when you're also running the camera. Yup.

I mean, it's difficult. It is. It is. So then, that's when I started hiring some directors and some DPs and just some more people getting involved in the production. And then, of course, that helped elevate the production quality. And so, that's where things kind of started to take off and snowball a little bit. But we're still going after anything and everything. And so, a few years into that, I just realized how tough it was going after every industry, doing every type of video from big and small and trying to be the expert in all these industries. It was really tough. And so, it was the fall of 2019 that I stumbled into my first opportunity to get into sports. So, I'm a big sports guy and always kind of had the itch, had the dream of like, "What if there's something in sports I could do?" But, I didn't have anything to show. I didn't have anything. As you know by now, I'm sure, as creatives, we're only as good as our last project. And so, what we've done helps get us in the door for what's next. And so, I got hired to film a little high school football video about a high school football player. And so, that was my first thing. And then, I was able to use that to turn it into a bigger opportunity to get to work with University of Illinois football in the fall of 2019. And so, we did a cool hype video for them and a couple other videos for recruiting about the football program. And, totally had no idea what I was doing. I mean, a lot of creatives talk about the imposter syndrome and that was my MO. That fall. I was trying to broaden my shoulders, act like I knew what I was doing in sports, but in reality, I had no idea. So, praise the Lord that the videos turned out great. And so, that would give me a big confidence boost of like, "Okay, we can do something here." But, I have no idea if there's a market for this. So, I was totally hooked on sports, but I had no idea if I can make a sustainable business out of just sports videos. Or if it would just be another industry that I would go after in addition to all the others. And so, I realized that if I want to make a go at it, I needed a better-sounding, cooler-sounding name than JM Films if I was going to get into sports. And so, on a whim over the course of a weekend, I came up with the Rival Studios brand and slapped together a new website. And, this was January of 2020. And then, as fate would have it, the world shuts down and sports go dark about 3 months later. And then question all my life decisions. What did I just do? Here I was bright-eyed, bushy-tailed, energetic to grow up in the sports world and here the sports world comes crashing down. And so, it took me the next 2 years to just learn the industry. And, when I talk about or when I say I hustled and just pounded the pavement, I mean that was me for 2+ years. Where I was traveling, starting to travel all over the country to go to sports conferences. Didn't know a soul and showed up and started handing out my business card and trying to meet people, make contacts, learn the industry, where and how these teams use video and production. And so, then did that for 2 solid years. I mean, I sat in a desk very similar to mine right now and would just cold call, email, and cold call cold email and cold call all the college football programs in the country. I mean, just smiling and dialing, just trying to get in the door, open up, you know, some opportunities. And so then the fall of '22 was when it started to actually take off and things started working because, you know, after a while, if you do this for 2 years and not much luck, you really test your perseverance. And it's like, man, am I crazy or is there something really here? So, the fall of '22, we got our first few big teams. We got awarded some work with Carolina Hurricanes and the St. Louis Blues here in our backyard. And then, also, St. Louis University, we did their basketball intro videos. And so, that was a big sigh of relief because it was like, "Okay, I'm not crazy after all. I've got something here." I knew the market a lot more. I certainly had more experience now. So then, going into fall of '23, or spring of beginning of '23, that's when I decided it was time to go all in on sports and take everything else off the website that wasn't sports and then just make the plunge. And so, then it's been 3 years now this January that we've only been in the sports market. So, what we do now is we primarily work on— we've primarily been on the team side. So, we work with a ton of pro and college teams helping with their media day productions. And do a lot of video board and jumbotron content from intro videos and hype videos to graphic packages and all other types of stuff. But we're quickly growing into other areas of work as well in the sports world to work with broadcast networks and some of the leagues and conferences and sponsors and brands and racing and golf. And there's so much within the sports world. So sports is unique in the sense where it's a very niche market, but it's also a very diverse market as well. So it's really hard getting in the door, uh, and getting a name, getting— making a name for yourself, getting established, uh, because it's such a closely guarded relationship-based industry. Uh, but once you get in the door and you make a name for yourself, and there's so much out there, um, in terms of opportunities. So, uh, that, that's the, uh, Rival story in a nutshell.

Well, that's awesome. That's a great story. I, I, I want to go back to When you were 6 months in and you decided, I can't do everything, I'm going to focus on video production. Why was that?

I just wasn't good with the other stuff.

Okay, fair enough.

That was— I mean, I thought I was pretty good. I was pretty good at designing a logo. I was pretty good at making a brochure. But if I wanted to really be sustainable, I knew that video was what I was best at, what I enjoyed the most, and where I saw the most potential because the other marketing agencies were my biggest competition at the time. And so, they did everything but video. And so, I was like, "Man, maybe I should just do video then and not compete with them on all these other things." And then, realize that now I can become a production company and begin that journey. Ben: Okay.

So, my next question is you talked about this inflection point where you you realized that you weren't good at everything again as far as videography, and you said, okay, I'm going to bring in people that are better than I am, and I'm going to lean into what I'm good at. Uh, what did you lean into when, as you were delegating, like, what did you identify was the, the most valuable thing or most important thing that you, you kept on your plate And second question is, did you have any mental hurdle with that delegation, bringing in others and letting them do the work?

Sure. The short answer to that is the one position I couldn't outsource was sales and being the business owner.

Yeah.

Yeah. So I could hire a director, I could hire an editor, I could hire a shooter, I could hire a gaffer, I could hire all these other positions my creative production, the creative production, video production process. But, the one that I couldn't hire was bringing in the projects and managing the business. And so, that's when I realized that I needed to focus on that side of the business and let everyone else do the other sides of the business just to survive. I mean, that's the truth and that's the honest answer is just If I didn't sell and I didn't bring things in, no one else was going to and I'd go out of business and I'd find another job. So, I learned real quick that you got to sell to be able to eat. And so, that's when I started working with some more business consultants and coaches just to learn how to sell and learn how to stay in business and price things because that's a whole another angle of the creative industry and the creative business is the real business side of it. So, that was my role that I focused on and really grew on, grew in, was the sales and the business role. And then, your second part of that question about, was it hard or mental challenges? Yeah. I mean, it was hard initially because I'm a control freak and I'm a perfectionist. And so, I thought that I could do it best. But, the nice thing about hiring people that are more talented than you is that they are better than you. So it didn't take long for the people that I was bringing into the projects to exceed my level of talent. And it was like, man, holy cow, this is awesome. This is way better than I could have ever done. So then it became a lot easier to let go of once your talent, you know, the level of talent increases beyond your capabilities. Then you're— then it's one of those things where it becomes easier to let go and you're like, oh man, this is awesome.

Hey listeners, are you ready to turn your passion into profit? Then grab a copy of Profit First for Creatives. Click the link in the show notes to purchase a copy. And if you're not ready to make that full commitment, you can download a free copy of the first chapter. Check it out right now. Did you start out as, as with independent contractors on this, or did you hire employees, or how did that look?

Hiring has always been one of the biggest challenges of the small, my small business, and really I think any small business hiring is always challenging. So of course, you know, there I made a lot of mistakes with hiring, you know, earlier on thinking I needed to bring people on too quick. And thinking that that was going to be a good idea. Some ways it wasn't a bad— wasn't with bad intentions, but it was just a struggle because I didn't have a consistent revenue model. And so when you're just project-based and you can't really forecast, you don't know what's coming in and when it's coming in, it's hard to be able to grow. It's hard to be able to hire people. And make payroll when you don't know when the next project's coming from. So, that was a challenge early on. And so, that left me only being able to work with freelance people because I didn't have to pay them in between projects. I just paid them when I had to work. And so, that's— and that's still today the model that I have stuck with primarily, certainly on the production and the post-production side. Side. And so, as things have grown in the sports world, the level of talent that I've been able to bring into our work and into our projects far exceeds what I would be able to realistically afford in-house. Yeah. And so, but there's challenges with that as well. So, the in-house model is a lot more cost-effective in a lot of senses, but then that comes with other challenges too. So, there's trade-offs., for sure between doing the in-house model versus the freelance model.

Yeah. And, and I, I like— I, I heard this phrase a long time ago, uh, but I think it's a brilliant, uh, anecdote of hire slow and fire fast. Um, you know, we, we in our business, uh, you know, doing those projections and expectations of growth bring on employees and then the work doesn't show up. And then of course that just, you know, kills your profitability. So, and you don't want to hire people to fire them. I mean, that, that sucks. So, um, but then, you know, so, so waiting until you absolutely can't do it to hire somebody, uh, and I'm talking about an employee, not a, not a contractor, uh, but then the second part of that is, is as soon as you know that you didn't make a right hire, you get rid of them quickly because that's the other thing is people tend to think that people are going to change and they're going to get better and it's all going to work out eventually. But usually that's not the case. So hire slow, fire fast. You talked about project work, and I know that a lot of creatives do project work and that's their primary revenue model. How did you navigate those challenges or how do you navigate those challenges? The inconsistent cash flow, I guess, is what I'm getting at.

It's always a challenge to navigate it. And I will say this was a big motivation for me to get in the sports world because there was a lot more year-round opportunity. And so, certainly on the team side of the industry, sports are going all year round. And so, when one season ends, one season is starting. And so, as I was really analyzing and kind of dissecting the market within sports, I was like, "Okay, we've got the professional teams market here that are all year round. We've got the same seasons with college teams that also have these needs." then— so, that lends to a lot of recurring revenue throughout the year. So, we don't necessarily work with the same teams every year, some we do, but the more experience we have, the more demand that goes up for us. And, with our— and sports being an interesting industry where it's so niche, I don't have a lot of competition. There's not a lot of companies who do what I do, but the companies who are out there who do what I do, it's very competitive. And so, it's not like when a big major team wants to make a hype video, they're not casting that net to every production company in the country. They're sending it to 4 of us and say, "Okay, you guys put together your ideas and your budget and then we—" If they want to work with us, then they'll move forward. So the competition is low, the market is big, the recurring revenue is also big, and the demand is there because you can't have the same content. Like one of the biggest challenges in the corporate video world is you do an awesome video, whether it be small or big, you know, for whatever company, and more than likely they don't need another video for 3 to 5 years. Okay. And so then you have to maintain that relationship and you hope they come back in 3 to 5 years. Whereas with sports, there's a much higher burn rate on that content because of the nature of the content. So, players get traded, they get injured, they get— fans need to see new content all the time. So, there's no way in the world they could, you know, use the same video for multiple seasons, okay? So, having a built-in consistent need for our service within this market just made a ton of sense to make it easier from a business standpoint. So, now we're at the point where, again, we're not working with the same team every single year, but the chances of us working with, let's say, 2 to 3 teams out of each league goes up every year. So, that really helps with the more consistent cash flow than just doing the project, you know, doing everything project-based and trying to replace that revenue with inconsistency. Do—

I would assume that most of these larger organizations have in-house video. Is that accurate?

Yeah, I mean, every team does. There's no team that doesn't have some level of an in-house creative team. So. If they are small minor league team, they probably have 1, maybe 2 video people. You know, if you're the— I think I was at a conference this earlier this fall and the LA Chargers were there and I think they have like a 40-person team from a content standpoint. Okay? So, you get both ends of the spectrum from super small to super big and somewhere in between. And so, the reason why there's still a market for what we do though is because we represent capabilities that their in-house people can't, they can't achieve on their own, okay? From a quality standpoint, from an experience standpoint, but also from a bandwidth standpoint. So these in-house teams, they are so overrun with content needs, dropping a huge media day production on them in addition to all of their other content needs is very difficult for them to be able to produce. And then even if they have the bandwidth to produce it, the average person, excuse me, the average, you know, hire for these teams is a younger creative that doesn't have a lot of professional experience. So they've got a good reel, they've got some good editing skills and some good shooting skills, and then they take them in-house. But when it comes to being able to do big set designs, achieve bigger production value content with lighting designs and all of that. Like, that's so far out of their wheelhouse, they couldn't even attempt to try to do that on their own. So it's all about what we represent to them from a value standpoint of like, hey, let us focus on this because your in-house team can't do it. Let your in-house team do this stuff over here that we wouldn't be a good fit for, and then it's typically a good match.

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So how do you approach pricing? You mentioned it, uh, I'm sure it has changed over, over your tenure. What's— let's just talk about how you do pricing, or maybe what some of the challenges of pricing are.

Sure. Um, well, this is one of, uh, one of the biggest areas that business has grown and I've grown is learning how to price stuff. Because when you're first starting out or earlier in, you know, in the business, uh, you have no idea. You're just, you know, victim to imposter syndrome. Oh, you heard that this company charged $5,000 for this project, or you heard this company charged $10,000 for that project, so then that's how much I should be charging. But I quickly learned that that's the worst way to price your work, is just based on what you hear other people are charging, because you have no idea if you're making any money or not. So, when— now, how we approach pricing is most of the time in the sports world, the client comes to us with a budget. So, they may come to us and say, "Hey, we've got $150,000 for this media day production. Here's what we're looking to do. Here's some ideas. Here's our concepts," or they may not have anything at all and we've got to come up with the ideas and the concepts and pitch those within that budget range. So most times, 8, 9 times out of 10, we're given that budget upfront by the client. And then it's just, okay, backing everything else around that to say, okay, for us to stay under this, you know, $150K in this example, here's what that would look like. So then we just have to come up with the concepts and price those out accordingly to stay under that top number. So we have to look at all of our crew costs, all of our, you know, rentals, all of our post-production costs, all of those other costs are just line itemed out in our bids so that we know what to expect. And so when earlier, probably 5 years ago, before I got a little bit more sophisticated with it, I tried to bake in like markup into the rates and it just got, it just got complicated to try to put in a rate in your spreadsheet and then remember what your actual costs were in there and then figure out what the leftover was. So I, about 3 years ago, I totally just went away from that model and I started adopting what was in the higher-end commercial production industry, what's called the AICP bid format. Okay. So that's Association of Independent pendant commercial producers or productions or something like that. Anyway, it's an advertising commercial industry standard way of bidding. And so, basically, I took that model and then I modified it for my needs. And so, how it works now is in our platform, budgeting platform Saturation, we have every line item cost detailed out. And so, every line item in there, DP, AC, editor, motion graphics, whatever, we list out what our hard costs are. So, if I've got to pay this director $20,000, that goes in the line item, $20,000. And then, at the end of all of the line items, there's the production fees, what basically is our markup, okay? And so, then our production fee starts at 35% of certain line items within this whole list. And so, then basically what that comes out to is basically it's 35% on everything but travel. So we pass travel along at cost and then everything else, the markup gets applied. And then that way I know, okay, here's our production fee, here's our markup, and then here's our hard costs. And then it's just a much easier way to predict where, what your costs are going to be. And then once the client awards and things go forward, then it's just on us to manage that budget and make sure that we're not going over.

Do you have issues? Well, let me, my original question I was going to ask is, Have you ever— I think I know the answer to this— uh, walked away from a bid proposal because it was not like you're— there's no way I'm gonna make money on this, or not enough money?

Sure. Yeah, yeah. I mean, and that's part of what I, I feel like we as business owners have to be transparent about, is, hey, is this a good fit or is it not a good fit? Because I'm not in the business to try to do business with everybody. I'm in the business to try to do business with people who are a good fit. Okay. And so, I would say it's fairly rare that we have to totally walk away, but give you an example that just happened yesterday where some high school tennis coach emailed me wanting a video for his tennis team. And, you know, high school teams are not known for having much money. And so, I just said, "Hey, you know, I'm more than happy to talk to you and see if I can be a resource somehow. If we end up not being a good fit, then I got another buddy over here who's a much smaller, more independent guy who can probably be a better resource for you." And then, that's ended up what I did. So, I'm always trying to qualify as much as I can on the front end of like, hey, you know, if the team reaches out and like, hey, what can we do for $10 grand, you know, or something— not insulting that budget level, like, every— everybody's different, right? But if they're expecting like what we do for our major productions on a $10 grand level, it's like, I wish I could. Like, there's so many people I want to help, but it's just like, it's just not possible with my model. And so I always just try to kindly, professionally hand them off to someone who I think would be a better fit. And focus on who is a good fit.

I think that's one of the things that is key to success in a creative business is having an expectation of profitability and sticking with it. Right. And being able to say no to something and walk away from it is hard, especially if the alternative or the replacement is not clear and it's not imminent, like you're like, well, I got to take this because I got nothing else in the pipeline kind of thing.

Sure. Which is always a temptation and it's always a pressure or it can be. But, I would say we just have to be careful about managing expectations and setting expectations because We've all been in the position to take a dive on the profitability to get the job, okay? But what if that client comes back the next year? What are they gonna expect? If you did a $50,000 production for $25,000 because you really, really, really wanted it and you made it work, you made no money, everyone else gave you, you know, friends and family family cut rates and all of that. Like, if you pulled it off somehow for $25K, even though you should have charged $50K, what do you think that client's going to do next year? Well, they're going to expect you to do the same thing for $50K or $25K. Okay. And so kind of one of my sayings is cheap work leads to more cheap work. Yes, it does.

How do you— absolutely. Well, and it's, it's a hamster wheel you never get off. Right. You're right. I think a lot of creatives struggle with pricing because, you know, absent experience of someone saying, yeah, I'll pay you this, there's that fear factor of, you know, that creeps in and is like, well, am I worth it? Right? You have a situation where now you have people coming to you with budgets. Um, how did, how did you handle that before when you were coming up with the bid? Like, how was that different?

Most of the time it was the, you know, the game of fishing, okay? You're, you're just throwing your, your, your line out there and hoping that it's gonna bite, and you're throwing out numbers, and when you have no idea how much the client has, and so believe me, I made more mistakes than I can count earlier on in managing those expectations in those conversations. And so, an earlier kind of one of my mentors earlier on, still talk to, but he runs in St. Louis, runs a design and branding agency. And so, he and I kind of became close a long time ago as I was just trying to learn business. And so, he's one of the best things I learned from him was how to handle some of those conversations when it comes to pricing and budgets. Because he said in his conversations with clients, he'll say, hey, do you have a specific budget? Most of the time they say no, and then most of the time they say okay, and then they come back with a number, and you have no idea if that person has that amount of money or not. And more times than not, they don't. Okay, right. So this is— he— one of his best pieces of advice to me was don't walk away from that conversation without talking about a number. And so if the client doesn't give you that number, you need to give them the number and say, hey, you know, based on this scope, some past projects that we've done like this, typically these are in the $10,000 to $15,000 range. Does that sound like it'd be a good fit? And see what they say. And then you shut up and the first person who talks loses. Okay? Yes. And then, you'll get to know real quick what their real number is by their reaction. And they'll say, "That's about what we expected," or "We think that that could work," or "Oh my gosh, we were thinking this would be like $5,000." Well, then why don't you just tell me you had $5,000 when I asked you and you said you didn't know? Okay? So, you always— They do know. They do know. Exactly. And even if they don't know, there's always a number that makes them uncomfortable. Uncomfortable. So go after the uncomfortable number. Say, look, you know, this is going to be about $5,000 to $10,000. You know, does that sound doable to you? You know, and if they say yeah, then great. What next steps? What I'll do is I'll put together initial, you know, scope of work for this or whatever else they're asking for. You know, we'll send this over and then I'll, you know, we'll set up a time, uh, within the next week to kind of talk through that and make sure that there aren't any questions or concerns as, you know, we move forward. You know, something like that. So that's the, one of the best ways that I learned earlier on to manage those budget conversations, just to see if you're in the same universe, because I spent so much time meeting with people, talking with people, driving all over the city for coffees, you know, meeting with all kinds of business owners, you know, not knowing if they had $500 or if they had $500,000. And it's one of the riskiest things that you can do is take all these discovery calls and conversations, um, and do zero qualifying on the budget. And then send them a proposal and just, you know, hope and pray that they're not going to freak out over it.

Yeah, that's, that's really good advice. And, and I, I think part of the problem— not, not necessarily where you are now, but, but looking at the landscape as a whole— part of the problem is businesses don't really know what they're buying or why they're buying it. Like, I, I think there's a lot of people that get pitched, say, video production, um, and they don't really know why. You know, it's like, well, you know, the guy I play golf with, uh, he, he, you know, got video done. Or I, I see this, uh, competitor on LinkedIn and they're all over the place with video, and so I'm like, well, I need video. And without really understanding why that— what they're going to do with that from a business standpoint, how much how much return on investment or what their expectation is. And so, yeah, I think there's a lot of buyers out there that don't really have— they don't have a sense of the value because they don't know what it is that they're buying or why they're buying it. Right.

No, I totally, totally agree. And honestly, it's been one of the biggest blessings to not have to worry about that in the sports world. Everyone already has informed expectations. Everyone already has an idea of what they're buying and what the purpose is of it. I don't have to navigate some of that, you know, some of those difficult conversations to try to sell them on like why they need video like I used to do. So yeah, I think it's— there's different types of like sales conversations and there's different types of projects. So like sometimes they're very specific projects where you don't really have to talk about value or What's this going to do for you? You know, where it's like, hey, we need a training video, uh, to show at our orientation for this, you know, right, company. Okay, pretty straightforward. Is the price going to work? Is the concept going to work? All right, let's do it. You know, those are pretty straightforward conversations. But if you're trying to like sell them on the value of a brand video or a commercial, you know, or something like that, like that's a whole nother can of worms where essentially trying to sell creative goals and aspirations to someone who's likely not creative. And so, that can be very challenging. And then, some video gurus, they are advocates of this value-based pricing model, okay? Whereas, "Well, how much value would this video create for you? If it doubled your revenue, how much value would that create?" create for you. Like, I never got into that, okay? Like, I'm more of a straightforward guy, and I try to be real consistent with how we manage pricing. Uh, so whether this video generates a billion dollars for you, whether it does nothing for you, it doesn't change my cost, okay? So, uh, I've always tried to be more straightforward, and there's plenty of guys who disagree with this, so it's kind of a hot topic issue, but I've always tried to be more straightforward with it, be like, look, you know, here's what it costs, here's what you're asking for, uh, and is it a good fit or is it not a good fit? And so I try to peel the onion back as much as I can. And certainly now in the sports world, like, we send over line item bids almost every single time, and then the client can see exactly where every single dollar is going, including our production fee, including the production fee. Like, they will see exactly what our production fee is on this whole thing. They'll see where every dollar goes, and 9.9 times out of 10, I get zero questions on it.

Yeah, yeah. And I do think it depends on the situation. I unfortunately am one of those proponents of value pricing, uh, that you, you were disparaging earlier. But, uh, well, we'll, we'll talk about that on a different episode. But I, I, you know, the reality is, as long as you're getting your margin, it doesn't really matter how you get there. The, the more important thing is, are you making money you need to. And that's the piece that I think a lot of people skip over. Sure. My last question is kind of a pivot. What are your thoughts of what's the impact that all of the new AI tools have had on your business? What do you see in the near future? No one can tell me the long-term future. What do you see say, next 2 years?

Sure. Um, well, I was just talking to a couple different people about this in some conversations, uh, you know, the last couple of days. And, uh, the, the analogy I like to use is that AI is a tool, and just like anything, tools have specific jobs, and you don't use the same tool on every job. So if you're building a house You know, you don't use the saw on every single job. Use the saw when the saw is needed. You use this tool for when that tool is needed. So I think AI is nothing more than a tool, and it's used for a lot of jobs, but it's not used for every job. And so there's ways that we certainly have embraced it to make our efficiencies, you know, workflows more efficient, and it certainly has extended a lot of capabilities that previously we were more limited on.. So for example, like we'll use them in our pitch, we'll use AI and ChatGPT and several of the other programs like in our pitch processes. So when we're trying to come up with some custom imagery for a concept, previously you would just search the internet and the interwebs and find mood board images and grab from other existing content out there to try to paint the picture of your idea. Well, with AI and ChatGPT, now you can create a lot more realistic-looking custom imagery for exactly what you want instead of having to grab from other content out there that might be close but not exact. Okay? It might help us— it helps us write copy for some decks and stuff like that. So we use it in our sales processes and then we've also used it in our post-production workflows as well. So we had a project with NC State Basketball this past fall where they wanted to create this kind of Stranger Things upside-down world type of look for the concept. And so previously, we would have approached that more from a traditional VFX approach with 3D modeling and VFX and all those programs, but that gets very costly very quickly. And so with AI, we were able to feed it some of the clients' drone footage of the stadium and around the, you know, uh, the, the city, and then feed that into AI, and, uh, and then it was able to create that effect for us in a matter of, you know, prompts. Okay, right. So there's a lot of efficiencies that it's created. It's also extended our creative capabilities where we can do a lot more with a lot less now. So we're Previously, we would have been more limited by budgets when it comes to VFX and CGI and some of those things. Now they're a lot more accessible, so we can push the creative boundaries a lot more than what we previously were. So it's a great tool. It's not the right tool for every job. Am I worried about it taking my job? No. So I also think that Eventually, there's going to be kind of a pendulum swing with this, as most things, you know, most innovations and things that come out. Okay, there's an early adoption, super popular, everyone wants it, and then it kind of teeters off, and then it comes back to the other way. Okay, so I think that there's going to be a lot of, you know, frenzy to early adopt AI and all the things that it can do, but long term, I think that it's going to kind of come back the other way. Where it's not going to be so commonplace, it's not going to be so overused because I think our society is just going to become immune and just numb to all the AI, which some people call AI slop out there. That's a good term.

No, I agree. I was talking to a content writer yesterday. He has a content writing company And, um, you know, he, he was talking about the, uh, need for human-written content versus AI-written content. And, um, you know, he actually bought a, a, an existing business, uh, not even a year ago, so he knew that AI was a huge factor., but he was betting on the idea that the human, uh, content was going to eventually be in more demand. And, and I, I think he's right. I, I like your analogy of tools because I just thought of this, and it may be a bad analogy, but we'll go with it and see what you think. Let's say, you know, you're, you're, uh, uh, there are, are hand saws, right? Okay. And then all of a sudden, somebody invents an electric circular saw, right? And now it doesn't cost much more, maybe it's cheaper than the handsaw. And so you get a lot of people who are like, oh, this is great. I'm going to buy a circular saw and stop using my handsaw. But the problem is, is for the average person, it doesn't make any difference in their productivity, in their results. If they're a woodworker like I'm a woodworker, it's not going to— it might allow me to do some things faster, but not necessarily better. And at the end of the day, as me, you know, the do-it-yourselfer, it doesn't really move the needle. It sounds sexy and it is. It's impressive. Like, look what this can do compared to. But if you take it to the hands of a professional, the professional builder, for instance, they're like, oh shit, this cuts my cost down by 90% and my time down by 90%. I absolutely am I'm going to love this. But I guess what I'm saying is, to continue the analogy, it doesn't make someone a videographer. It doesn't make somebody a copywriter. It doesn't make somebody an accountant. It's going to find its real value in the hands of the professionals, not in the DIY. Sure.

Yeah, I think that there's a lot of truth to that because ultimately, AI can only do what you prompt it. And so, it doesn't know everything. And so, a lot of its ability to do whatever we want is in the hands of the prompters and the people. And so, we still are going to need people in order to use that tool. But again, I don't think it's going to totally replace everything. Another good example of this in industry, my world, was LED walls, okay? So, LED walls were all the rage about 5 years ago where certainly in sports, they were the new technology, everyone wanted them, virtual production was like this new sexy thing, it had so many benefits, you could shoot anywhere, you could shoot in the studio and make it look like anywhere, there were so many bells and whistles and selling points about it. Okay? And then, teams started adopting the LED walls in all of their videos and all of their content because they saw the efficiencies. "Oh, we can get so many different looks out of this one wall. We can put this background and this background. We can do all of these things." And so, it was all the rage starting about 5 years ago and then, rode the wave for, I would say, the next couple of years was super high in demand. Well, in the last year, 2 years now, we're already seeing it come back down the other side where it's a tool but it's not a tool for every job. And so, more teams are starting to not want LED anymore because it's already been so overused. They have to do something different. And so, that only benefits me because we're there to help them do something different. But, bring this back to this point about the technology, I think AI is going to follow a similar trend where there's going to be an kind of an early adoption craze of like, okay, let's see how we can do this and use it in all of our content. But then inevitably, there's going to have to be a shift to where more fans are going to want other types of content that doesn't look like, you know, doesn't look like AI. So, the bar is always changing. The trends are always changing. So, that's where I would be reluctant to be like a huge investor in like AI for at least for my industry right now. Because I think it's going to be popular for a time. And, to some degree, there will be long-term uses and benefits for it, but the ultra-high-level consumption and use of it in all applications I think is going to be very limited. And so, I think at some point, it's just going to taper off and just be— it's a tool like I said, but it's not necessarily the tool for every job.

John, I very much appreciate you coming on the show and sharing your experience. If the off chance that there is an NFL video producer listening to the program, how would they find Rival Studios and learn more?

Not just NFL, we work in all sports. You know, rivalstudios.com is the best place to check out our work. My contact information is on the contact page, so always happy to be a resource to people however I can be, those who are, you know, kind of aspires and dreamers of getting into sports, or, you know, maybe there's people out there who want to potentially work with us in a particular capacity— shooters, editors, whatever. So we're always looking to grow our talent pool of people that we can pull into projects, but always, you know, happy to be a resource however it can be, even on the business side too. If people have got questions on kind of maybe learning some of the lessons that I learned without the pain, happy to share those. Yes.

Thank you, John. Listeners, we'll have those links in the show notes. If you like what you've heard, please rate the podcast, share the podcast, subscribe to the podcast. If you don't like what you've heard, shoot us a message. Tell us what you'd like to hear, and I'll get rid of John. Until then, ta-ta for now.