Creatives Grab Coffee - Buying A Video Production Company (ft. 77 Productions) | Creatives Grab Coffee 86

Episode Date: March 6, 2025

In this episode of Creative Scrap Coffee, Anthony Darvill shares his journey of acquiring 77 Productions during the pandemic, the challenges of transitioning ownership, and the importance of valuing a video production company. He discusses strategies for preparing a business for sale, the significance of client relationships, and the lessons learned from his experience as a business owner. In this conversation, Kyrill, Ant, and Dario discuss the intricacies of managing client relationships in the video production industry. They explore the importance of setting clear boundaries, structuring deals effectively, and maintaining open communication to ensure project success. The discussion also delves into the challenges of working with clients who have unclear goals and the emerging trend of multi-sensory marketing, highlighting the need for brands to create cohesive experiences across various touchpoints. Timestamps 00:00 - Episode Introduction and Guest Welcome 02:19 - Guest Bio: Anthony Darville from 77 Productions 02:39 - From Consulting to Buying a Production Company 07:15 - How Anthony Bought 77 Productions from an Ad Agency 12:19 - Navigating the Client Transition after Acquisition 17:34 - Valuing a Video Production Company: Key Insights 29:45 - Major Changes Made Post-Acquisition 32:48 - Important Lessons Learned as a Business Owner 37:19 - Managing Client Expectations and Setting Boundaries 50:54 - Aligning Client Goals with Effective Communication 53:57 - The Future of Multi-Sensory and Sonic Branding 1:02:28 - Closing Remarks and Episode Wrap-UpSPONSORS:Canada Film Equipment: www.CanadaFilmEquipment.comAudio Process: www.Audioprocess.ca🎵 Spotify: https://open.spotify.com/show/2vHd8BdbkMQITFZmDJ0bo9🍏 Apple: https://podcasts.apple.com/ca/podcast/creatives-grab-coffee/id1530864140 🎞️Produced by LAPSE PRODUCTIONS – https://www.lapseproductions.comTo learn more about the show, visit: https://www.creativesgrabcoffee.com/

Welcome to Creative Scrap Coffee, the podcast on the business of video production. Creative Scrap Coffee is hosted by Dario Nuri and Kirill Lazerov from Labs Productions. Our goal is to share knowledge and experiences from video production professionals around the world. Whether you're a freelancer looking to start your own business or a seasoned business owner aiming to scale your company, this is the show for you. Join us as we develop a community of like-minded creatives looking to learn and help each other grow. Welcome to the business of video production. Welcome to Creatives Grab Coffee. Before we get started with the show, let's go over today's sponsors. Do you have a shoot in Toronto?

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Hey guys, welcome to another episode of Creatives Grab Coffee. Today we got Anthony Darville from 77 productions Anthony. Good to have you Dario Carol great to be on your podcast So in tradition of all the other episodes we've done. Let's just start with a backstory on yourself and your company Right, so uh backstories During kovat when, Australia was one of the

most locked down cities in the world, I was consulting, doing a lot of this video conferencing things, and I was consulting in sales operations and bringing up two young kids. And as we came out the back end of that, I felt like it was time to go and press the flesh again, meet face to face and get out and do more things. My kids were settling into school, I thought I'd better go get a real job, because at the time I was sort of working three and a half, four days a week. And I picked up a job as a general manager at an advertising agency in Melbourne that had four pillars. And one of those pillars was video.

And my remit was to really look at the video arm, which was trading as 77 productions as a separate arm, and basically divest it. And by divest it I mean transfer all the employees over onto their own employment agreements under a new entity, tease out all the vendors, suppliers, customers, put it on its own CRM, set up its own financial package, grow it and sell it. You've got four years, see how you go. And about eight months later the dynamics and the company position changed and they pivot and they thought we should probably axe the video part.

So it was a bit of a rescue, I'll save it. So I bought it in a management buyout with my business partner at the time and we set it up and we ran it ourselves and I stopped working for that advertising agency so focusing farmer on the production side less the digital marketing and design side and that was in September 2023 which brings us to to today and I'm really excited about the plans we've got for 2025. It's very rare we haven't really seen someone that has bought a video production company before I think you're one of the first people we've had on the show that did that. Yeah you might wonder like why would you

just set one up yourself? And I think it's a fair question. 77 had been around for over 10 years when I bought it and had quite a bit of equity. Some brand equity had had, I think had done business with 2,600 people. There was quite an extensive contact list there's some history there's some credibility there's some awards that we had won on a um a program here in Australia called the Gruen transfer which looks into um video marketing and this the um

psychology behind uh behind that and they have this section on it called the uh the, where they get two advertising companies to compete against one another to sell the unsellable. And one of the ideas that they had was they'd get us to make a video about how we could justify eating our nationally protected animals. And we came up with this video called Koala Masala. Why does that sound good? It does sound really good. Not sure, I haven't eaten koala before.

I've eaten a few different Australian animals but not koala but it had this jingle and it went down really well and I recall the host of the show months and months later saying that was one of his all-time favourite pictures. So there's a number of things that 77 had going for it that I saw value in above and beyond starting up a video production company from scratch. So with them choosing to axe the video production company, was it kind of like something that they, it's like they put the company on the market

and were letting people kind of bid on buying it, or was it something you thought to yourself and you came up with the idea with your business partner and approached them and said, hey, since you're no longer going to be running this company, can we just buy the rights to it and just use it as like a separate arm? Is that kind of your thinking or approach or how did you go about it? Correct. It was more the latter. So the position I was in was, okay, make your staff redundant. You're okay. I've got a job for you, you can

stay in the agency and we can redefine your role. And by that stage I'd put so many things in place and I could see, I had a vision for it and I could see it being a success. So I offered to bite in somewhat of a an unconventional way. I actually actually met with the owner at the pub one night and we sat there and we were talking about, I think I had about 10 questions for him and they're all about have you considered this, could we try this, could you know, just to extend the runway a little bit longer. And my tenth question was, what if I bite? And he sort of put his beer down and he looked at the ceiling he thought, hmm well I guess I'd only want, and he was about to say number, and he's looking at the ceiling and I'm going, oh shit I didn't even think I was going to be asking that question.

I better come up with a number really quickly in my head before I'm influenced by him anchoring first. So I came up with a number here. He came up with a number down here. So, oh, that's interesting. And then we negotiated through a, you know, a works-in-progress balance. Obviously, when you've got projects on the go, they need to transfer. So you need to sort of compare where the projects are in terms of their delivery timeline and effort

compared to what they've paid. have they paid a deposit or nothing or a progress payment is it fully paid and how does that compare with where they are in the production process then you go through all the list of projects and you come up with a balance so after that balance his number my number, balance paid, deal done. Do you have a background in video production? Not a strong one. In audio production, yeah, I was a flick my camera around, can I do that? I could. This is our post-production desk. We've got all the EQs and delays and preamps and

compressors and there's a cloud above me this is a highly treated a highly treated room for people that are listening to this podcast he's just showing us his studio space yeah a lot of audio centric gear that is present a lot of nod a lot of audio centric gear and a lot of a lot of baffling as well and I've got the bass traps in the corner and broadband absorbers flanking to the side, a diffuser at the back. So acoustically this room is set up to be a mixing and post-production sound room and that's been my that's been my history. I had a side hustle doing a lot of audio production and in that side hustle I built a web page with some videos on it to sell my

services and people started asking me oh who, who did that video? And I'd hand drawn some of these illustrations and got them animated. They were very basic, but people sort of latched on to them. I think in playing with my camera I might have just... It's okay. I know, it's looking good. One thing I was actually curious about, because when it comes to ownership changes in any kind of company, yeah, you purchased the company and now it's yours,

you have the track record, the portfolio, the past clients. What was that transition like in terms of, you know, basically almost like resigning your clients almost in a way because typically when you have a production arm that's part of an ad agency, know, basically almost like re-signing your clients almost in a way, because typically when you have a production arm, that's part of an ad agency, it's a lot of ad agency work being fed directly to the production company. So it's very synonymous with that ad agency. Was it like an easy transition for you with your current clients or did you, did

you lose some, did you gain some? What was that like? Oh, Carol, before you ask that, I'm just curious, was the original owner of that production company still there or not anymore? No. They stayed with the advertising agency. And the video part was carved out and put in its own entity. So it's a different commercial entity So it was an asset sale rather than the company sale didn't buy the company shares

I think that's an important point even though it sounds like a detail If any of your viewers are going down that path or consideration At least in Australia if you buy shares and it's a company share sale, you also buy all its legacy. So if there's any risk or problems or recourse, you know, closets, skeletons in the closet, they could come out and affect the way your business performs in the future in an asset sale You're just transferring the assets from one entity to the other So it was like its own entity essentially and you were able to just like it's like chopping off that arm

And it's like that's your arm now basically That's right. I don't know if that's a good analogy, but yeah And Kirill I thought that was a really good question and it's a bit of a mixed bag in terms of how the clients transferred over. Some of them, like with rolling projects, it's just you're communicating with them on a regular basis so it's just a conversation. And by the way, the next invoice is coming from this entity. Can you please make sure that the bank details are updated accordingly? So very sort of smooth and natural transition.

Did we lose clients? Yeah, we stopped getting the work from the advertising agency that we were getting, but it was the wrong type of work. Because the agency owned the video arm it was able to put a lot of like downward pressure on costs and to be able to continue on a new precedent, this is where I see our value. It just didn't work. So that freed up a lot of the opportunity costs

to go and pursue different types of work, different types of clientele. And we've gone from working with small, medium businesses, a lot of mom and dad owners Maybe small franchises at best through to International organizations like KPMG So it's been a real win girls anything you want to like ask in that area because I kind of want to go and talk about the

Like how you put a value on Is there anything you want to ask in that area? Cause I kind of want to go and talk about the, like how you put a value on. Yeah. I mean, I think he pretty much summarized it. And it seems like it was a pretty straightforward like transition and it makes sense what you're saying about the ad agency work that was coming from them. It, there tends to be like a lot of like,

probably like kind of like quick one-, smaller type things that obviously they might need to kind of help smooth over a bigger project on the agency side. And it definitely made sense for you in terms of what you said where that was the wrong kind of work for you guys because it would be very demanding work, but without much payoff. And once you start quantifying things

as a production company, you start figuring out what your baseline costs are that you need to cover for any project you take on, right? And when you're working with like in collaboration with certain agencies or anything like that, they might try to like send volume and try to get like deals on some stuff in a way. But yeah, I think you covered it perfectly. I know Dario had another thing to add after.

That's really interesting. Oh yeah, you were going to say something? Yeah, go. A little bit more colour in there. The dynamic just makes sense. The agency is giving the video arm, they're paying the staff, they're paying the rent, a lot of those fixed costs you were talking about are being paid under the umbrella. So when they say can you do this, it's not a paid job, what I started doing was thinking okay what is this worth? Even though we might not be,

even though the video arm might not be being attributed a certain defined revenue dollar, what is it really worth in the market? And on the flip side, what are all the costs? What are all the things that we are getting, well we're getting looked after, that we should be paying for. So I'd been keeping a I'd been keeping a bit of a run sheet of that balance. I don't know if the previous owner knew that I was doing that but it's part of my job to make sure it's viable. So I sort of had a handle on So I sort of had a handle on what those costs were and what they could be and what the attributable revenue should have been and saw an opportunity.

I kind of wanted to explore putting value on a video production company because we have a lot of people that have been guests or that we know that are trying to prepare their company to be able to sell it in the future so do you have any recommendations for them in terms of how they should prepare for that like in terms of what certain like a well like a potential seller potential buyers gonna be looking for in that company? Yeah, look, I think in this day and age, one of the key things that every company is after is recurring revenue. So the value of a retainer or any sort of recurring revenue model that's in the business is a good one to look at.

Failing that, a lot of video production companies don't have a recurring business model. So I think there probably needs to be a good understanding of what is the likelihood of repeat work. And perhaps there might be opportunities to have discussions with past clients or survey past clients, you know, maybe an MPS of their propensity to recommend them as a video production company, might also reflect on whether or not they would use the video production company again. Those sort of stickiness of old clients I think is a big part. For me I saw quite a lot of value in the video library. So the thousands of productions that have been done by 77 over the years, people want to know like okay you've

pitched an idea, I like it, have you done it before? Can I see it? It makes your service, even to a new client, far more sellable. Proof is in the pudding. We've done it before. Here it is. We can do it again and make it better for these reasons. It might be technology or a better idea or using better equipment or we not only can meet this we can we can exceed this and that gives the the prospect confidence. Right so yeah when when it comes to like putting it together all the different values it was interesting that you kind of that you focused on also the portfolio as an aspect of it because what a lot of people who are looking to purchase a company a lot of the time

is looking for, like you said, the consistent revenue, the client base, what is the frequency of work with each client, is really hard to measure that a lot of the time if there is no contracted recurring work because it always varies. And it's like, that's why a lot of people opt to just open up their own shop because it's a lot easier and cheaper to start.

But obviously then there comes the challenge of, all right, you start a new shop, nobody knows who you are, you don't have a portfolio, you have nothing to work with. And like Dario and I know from experience that that could be very tricky in the very beginning, but now in terms of portfolio what how like I guess that would be more of like a subjective

subjective way to kind of everyone might have a subjective viewpoint on how to put a dollar value on a portfolio because it's like what do you do like do you add like a thousand dollars per video that's in the portfolio or 10,000, you know, or like what, how do you measure quality versus quantity? Like, I guess it's just a matter of negotiation, I guess, would you say? Like, or is there no set formula? Yeah, there's probably not a set formula or if there is, it's probably gonna vary for different people.

But you're right, there's probably videos in the library that decrease the value. There's some clangers back there from 8 or 5. They're just not sending the test of time. I can't use them again. At best I could use them as a throwback Thursday social post. Look, this video is 10 years old, it hasn't aged well and has a bit of a laugh and some humility about it. But that's a really good point. How do you value some of these things? Like when you talk about goodwill, it's a big part of a brand. How do you value that? Is there a formula for it?

Eesh, that's a really tricky one. Yeah, I think it might be a matter of what someone might be willing to pay for it, also in terms of what they can actually use to spring them forward. Because the other flip side of using a company's past portfolio, if none of those key creatives or people who are involved are still a part of the business, it might be difficult to place a high value on that portfolio because there might be pieces in

there that are beyond your scope as well. Say for example, you bought the company and then there was a series of five animation type videos that were great pieces of work that had one creative director on it, but because that creative director is no longer part of the company, you know, you can't really do that same type, like maybe the same type of work, but not maybe that particular style or quality.

So it's like, what are you promoting going forward at that point, right? So I guess that might be one big factor is personnel that are retained within the company if you're keeping it. Is that correct? Did you retain any key employees or staff or did you just by yourself took it with your business partner?

No, we brought across all the staff. So there was an editor, 2D animator, 3D animator. We've never really done D.O.P's. So you had an infrastructure. Yeah. D.O.P's is an interesting one. We've never really hired them because, on a full time basis, because some people are good at flying drones as well, or really good at interviewing behind the camera and directing, or they have a particular type of

gear that we're trying to use to capture a particular vibe and you know, you'd love to employ them all but it's just not realistic so We didn't have a DOP but yeah creative. We had a creative director and a production manager and and a production manager. And then where we needed to, we'd scale up teams for special skills outside of that as freelancers or contractors.

So it was more of a turnkey solution where you already had an infrastructure that you were purchasing as well, not just the name, not just the portfolio, like people and staff and a whole system of processes that are already built in. You were purchasing that so that once you basically took over the company, you're still able

to start operating immediately. It's not like you take the name, but you have to now start to figure out your own process. You have to start figuring out, it's not like you're not gonna improve on it or change it to what you have, but at least you weren't starting from scratch, right? So I guess that's where the value is as well. It's like, what would be the startup costs

of basically trying to start the company from scratch? You avoid that and that is something you might be purchasing, right? Yeah, that's right. Really good point. I think one of the other things that you might consider in terms of value is what's the equipment valued at? I mean, that's probably an easier one to do. But video, a lot of video production equipment can be very expensive. So we had a sort of funny conversation, the seller and I, because there was a bunch of video equipment in the

warehouse and we didn't really know it was there and neither of us really cared because it wasn't getting a lot of use anyway and it was sort of like, can you do like can you do an inventory and it's like, oh no one was interested in it. But we did it eventually and we're able to get a pretty accurate value. But yeah, that's at least that's something that's quantifiable. But I think a lot of the, you know, how do you how do you value a website? Well, that website might have cost 15 grand to build four years ago. How's it performing though? What's it look like now?

Is it still worth that? What's it gonna cost to update or replace? They're all really sort of gray areas that you play and I think when you're trying to value a business. I'm just wondering, now that you do have this business like let's say in the future you want to sell it what are some of the things that you learned by buying it and owning it that you would do to prepare it for sale later on? Yeah that's gonna really push me well into the future. I don't have any exit plans on the horizon.

I think setting up systems and processes so that the operation can continue. So documenting the production process, for example. We tend to take a pretty unique approach to the way we engage with clients and that's you know that's that's not an easy thing to document it's not an easy thing to teach but I think getting getting those systems and processes in place is really important. I think making sure, like the data around your clients, up-to-date and accurate data is really important because you're able to remarket and fill that funnel and make sure that your website's converting. What do you mean by data?

Can you expand on that a little bit? Just customer data. Making sure that's rock tight. You don't want to be advertising to people at email addresses that are no longer there and just being wasteful. You need to be able to show your potential buyer that your audience is current, engaged, active. buyer that your audience is current, engaged, active, your website is converting well, that your leads that are coming in off your website are of the right type, the right profile,

there's a good product market fit and they're of high value and that there's some recurring nature even though it might not be contractually recurring I think to be able to say look this this client's made eight videos with us over the last three years it's not a contract so it's hard to sort of do the old SAS model okay three to five X that's the value of the company. But it gives the buyer confidence that that customer's gonna come back and that you've looked after them

and you've done a good job. Yeah, it's more so kind of like you're creating these different customer profiles or client profiles to let the buyer know, are they active with you right now or were they active with you like a year or two later, or here's like a client that comes once a year because they have this event, you know, like we all have different types of clients

depending on what their needs and goals are. But I'm curious, mainly, once you took over the company, what was like one of the first things you changed, or one of the biggest changes you made, or did you make any changes? Yeah, we made a lot of changes. Probably the fastest and biggest change was to lose our commercial lease. We were leasing a building which was a very sort of, it was almost like a corporate office environment with the false ceilings and the fluoro lights.

I cannot tell you, I cannot tell you how much our animators hated the lighting. And what I learnt was that animators like to, well, they're very subjective about how they want their room lit. And it makes sense. Like they're very, doing very detailed focus work and they're in a, they're very subjective about how they want their room lit, and it makes sense. Like, they're doing very detailed focus work, and they're in a time warp. They're just so focused. That also had the nature that if you needed to talk to them, you pull them out. The context switching that that causes them to get back into the 20 second layer on a really complicated

animation that's that's that was a big cost to the business so not just the leasing costs but the disruption costs and that they are they preferred to work from home under their soft well lit lights and rooms without the context switching and me distracting them. Yeah, no ant like hovering over their shoulders. You're like, hey, is the edit done? Is the edit done? The client needs it like right now.

Come on, where is it? Let's go. Yeah. I remember one of my staff commenting that, I don't, I can't remember exactly what she said but she was a favorable comment about having me as a boss and I was like that's interesting why is that so at my last place my boss used to be over my shoulder the whole time to asking those sort of questions and why aren't you

doing that and definitely not definitely not my style. But I mean the output of a production is it speaks for itself. And if we can keep to the production timelines and the quality is good, why not work from home the vast majority of the time? We'd still meet up every week. We were sort of pulling together on Wednesdays to work together for at least half a day and we try and park a lot of those conversations that would come up that were important but not urgent for a Wednesday hangout,

have some lunch. There was still more to do in the afternoon, sure we could kick on otherwise they'd go back to for a Wednesday hangout, have some lunch. There was still more to do in the afternoon. Sure, we could kick on, otherwise they'd go back to their tools and their creativity. So you went from being a consultant for that agency to then buying the video arm. I'm just wondering, what are some of the things you learned now owning a production company?

Good question. Just a slight clarification. I was consulting up to the point I became a general manager. I was actually employed by the agency. Oh, right, right, right. Okay. So I might have confused the story there. Sorry, Dari.

What have I learned? I've probably learned a lot about the importance of documenting agreements not not letting anything sort of remain in verbal land. Verbal contracts are still contracts but they're really hard to enforce if someone wants to go back on them. Also being really clear about the key sticking points in the terms and conditions. One of the things that really has been difficult to manage with some projects is projects that go long. Every week that a project goes more than our standard production time, which is probably around 6 to 8 weeks now, it's just costly. And I think just explaining what the terms are in the pitch process as well, you know, we expect

the reviews to be happen in two business days. You get reviews on scripts, you get reviews on storyboards, you get reviews on videos. Let's keep that to a 48-hour business hour turnaround time. turnaround time and If we get ghosted for a certain amount of time then you might have to pay a restart fee and sell it in like that I Like many start fee. That's a good one. Yeah, and then document it and Remind them again. Thanks, then you have your kickoff meeting Here's what we've discussed. This is we we're up to. This is the agreement, say it again.

Then send off the first script for review. Have this back in two days, just really drill it in. And the clients that I've done that with, having learnt the hard way, they're so good to work with. And we have a really good working relationship and it doesn't feel great to focus on terms and conditions. You're a creative human being and that's the process that we're really trying to get involved in.

It seems to, in my mind, at least in the past, be a little bit opposed to that. But you get a really clear working agreement. You just get such much better results, get engaged clients. When you spell out your terms and conditions, or basically the barriers that you wanna work within, early on when you're talking to leads and clients, then you're going to attract those types of clients that are willing to work with you early on when you're talking to leads and clients, then you're going to attract

those types of clients that are willing to work with you with your process, right? I feel like many production companies have sometimes the challenge where, I mean sometimes you will still communicate that, but clients will still take awhile to get their feedback in. This is more common with corporate type clients we've noticed.

Like that's where a lot of these particular challenges happen because they need to get so-and-so's approval, then it has to get checked by a few different people and everything like that. But what we've learned is that what works for some clients is not gonna work for all clients in terms of, at least when it comes to feedback. You can do your best, but as long as you communicate

to them, it's like, hey, if we don't get feedback within the certain timeline, we won't be able to meet certain deadlines. They will understand that. They'll just take longer to get back to you, but I do like your idea of putting in incentive costs where if it takes like three months to get back to you, then it is a restart fee.

Because again, you're basically starting up the project again, because we've done, I've had several clients where they're great people to work with and we've worked with them for many years, but sometimes it just takes them a month maybe to get back to you on a first draft, or sometimes unforeseen things that take them off of your project,

they have to deal with something else. And how do you go about those conversations with those types of clients? Because it obviously varies sometimes. Yeah, great question. I think it comes down to deal structure. How do you actually structure the engagement to protect yourself? You've sold it in at $80,000.

Great. Is that going up? No. Is it going down? Well, they probably would be happy to hear that, but you're not going to do that. So you've got this fixed income for the project. Then you have all these variables that you need to control. So for example you sell in 20 to 90 second videos to a large global consulting firm and then the videos turn out to be

longer. They're going to be longer. They're going to take longer to animate. They've probably got longer scripts, so your voiceover costs might go up. I mean, they're small things, but if you can build that into the deal structure, and what I do is I provide some leniency. Say, about 90 seconds. What's 10% between friends? then if you get if you get a big differential, there's a there's a There's a cost to that

Do you do like contingency planning like or contingency pricing as well? Like if they go because if it's like a big project like that, you could also, I'm guessing, say, hey, just in case we could set aside this amount if we go over. So they have some wiggle room in case costs go up, right? Yeah, I've certainly tried to varying degrees of success. Sometimes you can't get blood out of the stone. That's a no success.

Yeah. If it's communicated though, and it was understood there are more costs should these conditions occur, and there's no more budget to fund the project, or you say we're now in a position where we can look at the scope, we're going to have to reduce the scope because you can't honor the agreement. So you can still control your costs even though you might not be able to successfully have the project refunded with some sort of injection. Yeah, and you can also protect yourself and your contract too, right? Like I know for ours, we do put terms in there where if it takes a certain amount of time and they still haven't gone back to us and for example, some of our freelancers are no longer available for that

project and we have to hire someone else, like that kind of covers our butt, you know, because sometimes that happens, right? I mean, luckily it hasn't happened for us yet, but if it does, at least in the contract, legally we're protected. Yeah. And sometimes you get dragged backwards through doors. We've got Jeff Bezos that talked about type one and type two doors, where I think type one doors,

you can, anyone can make that decision because you can always come back through it. But the type two door, the door closes and locks behind you. It's similar, a bit similar to our production process in a way. Sign off on the script, you move to storyboard. Sign off on the storyboard,

you move to production and animation or shooting or whatever the case may be. Sometimes the client will say, well, that script's not right. Can we go back? Yeah, we can, we can. So, but it's gonna, it's gonna cost. So, making sure that that, that structure, so you, so you can afford the new VO and you can afford to go back and re-edit it. I like that. And you get, you know, maybe you get two reviews on script, you get two reviews on storyboard, you get two reviews on animation.

Actually, you can have as many as you want, but I'm, like, this price covers too. So put into your deal structure, what do additional reviews cost? Is it a fixed cost for that review? Do you quote for that review? Do you charge them a studio rate per hour? Make sure you cover yourself because your income for that project's fixed, but your costs could vary.

Yeah, and essentially once you're, like once you give them the whole process in terms of like what they can do in each role, the project in pre, production and post, they will understand and they usually, 90% of the time will work within those constraints. And like for example, especially when you're working with animation projects, there are certain things

that you have to communicate to them where it's like, hey, once we have this locked in, it's locked in, that's what we need to do before we move on to the next part of the process. And it's helped us in many situations where clients or where leads have tried to kind of like bounce back and forth, you know, we had one project a few years ago where a lead was asking us, hey, can we don't have

the script, but can you start working on the animations already? And we were, we were very, very strict with them because we knew that if we gave in on that, they were gonna start bouncing around constantly on us. And like at the, at the end of the day, we didn't make much money from that project, but we still made something because we stuck to our particular process there. We always communicate, it's like, yes, we can,

like you said, you can do more changes. We couldn't go back and change the script, but if you do that, it's gonna cost more because then it's gonna have a ripple effect to other parts of the entire process. So it's just about being very clear with your clients about what we expect from them and what they can expect from us to be able to deliver the project on time and by the deadline date, right?

So yeah, I'm curious to know what happened in that scenario when you explained, well, that's not our process and this is the reason why. How did that conversation play out with your client? To be honest with you, that client, we shouldn't have taken on in the first place. The flags were as red as they could be. in the first place. The flags were as red as they could be. But like we really just stuck to our guns with that one. And let me see, because to be honest with you, the communicating with that

particular client was a bit of a headache. And it got to the point where I like we had to like, we had to like really set boundaries. But I would say in that particular situation, we really just stuck to our guns and we said that's outside of the scope. But there were a lot of delays with that client. So it was like trying to deal with their delays and then they were trying to tell us, oh, well, can you work with the new timelines?

And we're like, no, like this is what we agreed to. So we, we, we didn't really budge too much because by that point we had already determined this wasn't a client we would continue working with. So. Like we're just like, this is what we agreed to as we were going to stick to. Right. If it was another client that we have a positive relationship with, we would obviously be more malleable.

Again, depending on if it doesn't exceed our costs or what we agreed to, or if it doesn't get to be too expensive for us or whatnot. But yeah. And one thing to add to that, and it's not like we were not trying to accommodate them or anything like that. Don't get us wrong. One thing we always try to do with any of our new clients or leads, like we always try to give them a good experience and we do our best to accommodate clients and we're always very, we're very upfront and very communicative in terms of what is doable. But as Dario mentioned, there were some red flags.

We took a chance with this one. We took a chance with this one and it kind of bit us in the ass a little bit. The problem with this particular client was that they weren't respecting a lot of our time in terms of like just our daily time. Like Dario would be getting calls at randomly at 8 p.m. at night sometimes just asking like here is or it was like they were trying to demand things at very unreasonable hours even. So it was kind of like a lot of this.

No, it wasn't a, it wasn't a. Wasn't that it? What was happening? No, no, they were just calling or texting too much. And like, I think early on I just got annoyed with it. So I just ignored it. And I think they got the message after a little bit. But it would be weird.

Like they would go, I don want to dwell on it too much. But anyways, the communication was very, very bad with this particular client. But basically we stuck to our guns. If it was anyone else that we have a positive long term relationship with, we would have been a bit more flexible, obviously. But yeah, I don't know, like maybe in your situations, it might be a little different. And like that project wasn't a big one either. So it wasn't like we were willing to, Hey, let's make this work type of thing. Yeah. I think every project's different clients are different.

They want to be taken on different journeys. And one of the things that my business partner and I, I think intuitively quite good at is, is figuring out where people are on this spectrum of hey just do it you're the you know what you're doing make it happen we've got no idea we trust you and on the other end is I've got a really clear vision and we just want you to execute it and be very involved. So where are they? What sort of involvement do they want? And when I'm selling in a project, I try and ask a few questions that sort of will help me identify where they are on that scale. And what I found is that people do want to have a different customer

experience. So we've sort of developed ways to engage with our clients and take them through the production processes that marry up with what they want to do. And where we probably operate is the best is somewhere in the middle. We like people to bring ideas but hold onto them loosely. That generally delivers the best results. I've got a ton of clients that really love the production process and we have a lot of fun with it and they want to get involved. My cousin's got a great voice. Can he be the voiceover artist for this? Send me his demo.

Let's have a listen. Sometimes we'll dive into scripting stage together in a remote document for accessing it online and just ripping it up together and working very collaboratively. Other clients wouldn't have a bar of that. They wanna see the best you can do first shot and then they'll go through two rounds of reviews and it's more back and forth and a bit more clinical. So knowing where they want to be and being able to provide that experience for them is key I think. There's

not one good customer experience. It's matching it to the customer. That is the experience. Exactly. Because you want them to have a good best. Oh sorry, I didn't realize you weren't done. Sorry, I have a habit of pregnant pauses and I can trip people up and all end up talking at the top of one another. Pregnant pauses, that's funny.

Oh, there's funny. Oh, you got it. Yeah, I was just going to say that to your point, one thing that helps in identifying that with the clients is making sure they know what they want and just asking the right questions sometimes to help them arrive at that. And I think with that one particular client that we dealt with, one issue was that they weren't sure what they wanted for a very long time. And that's why there was probably a lot of that miscommunication, but we really wanted to kind of work with this particular client, you know, to beef up the portfolio. And we were very lenient with a lot of things, but you know, it's like, there's only a certain amount of leniency

you could have before a client starts to take advantage. And that's kind of like the dynamic that we ended up. That's what was happening with that one. Yeah, we were lenient in many ways, but they took advantage of it. And that's kind of when we had to put the boundaries there, right? And so all that to say, to help avoid working with clients or leads that have those particular issues

is being able to determine if they know what they want, or at least an idea of what they want. If someone comes to you, it's like with a video idea, but then they're not sure what they want, or they just keep changing their mind constantly, then there's something wrong on their end in terms of their end, in terms of like what their goals are. They haven't figured that out, and they're trying to get you to kind of go on that journey

with them to try to help them figure it out. So yeah, I like how you put it in terms of, you have like a, every company needs to have their own kind of scale for like, would I be able to take on this client? Do I know what their needs and wants are? If so, then great, you can take them on. But if not, try to avoid jumping right into a working relationship with those leads because if they don't know what they want, they're gonna, you might end

up being like kind of the scapegoat for that as a result. Yeah, Kirill, your comment just flowed in from sort of what the client wants to the goals and I think that I think you you really nailed that flow because That's the goal is the why Why why do you want a video? Because actually no one needs a video Controversial did I really say that yeah, I did hot takes We're gonna mute this section out guys.

Yeah, we don't want to lose money, you know. So what do I mean when I say nobody needs a video? There's something that they want to happen off the back of that. So and it can be weird, they can be weird and wonderful things. Our local hospital had this problem. They installed all these new televisions over the beds and none of the patients knew how to use this system, just they couldn't flick it off onto the local news or whatever. And they were bailing up nurses left right and centre saying can you help

me with the television and these nurses are running around trying to help doctors and save lives it doesn't sound like they need a video it sounds like they they need their nurses to be freed up to do their job that's what they needed that was their goal video was just the vessel and how did we do that well we created an explainer explain video that was preloaded onto television. So as soon as you load it up, this is how you use the remote. And on the back of the remote, we put a QR code which loaded up the video so they could watch the video and the TV and sort it out themselves.

So what is the goal? Do you want... Is it brand awareness? Is it hype? Is it a funnel thing? Are you trying to move people to your website to start wanting to pull information rather than just pushing it out there? Is it a post-sale video that's going to teach your existing customers how to get more out of your product or service. Like, what are you trying to achieve? You tell me what success is, and then we'll make the video. And that can become the North Star.

And then the what starts to make more sense. Because if you're sort of running around with the what's and not the goal, or the why, you're kind of lost. You don't know what's gonna work it's good we're nearing the one hour mark but before we end off I was gonna ask you like what what is something you would tell you would want to tell yourself before you bought the company we kind of touched on that earlier so I guess let's change it up and let's instead, let me instead ask what is something you want to focus on for your company this year?

I'm really excited about a trend that I noticed is groundswell around multi-sensory marketing There's even a there's even a company here in Melbourne called Brand Sense shout out to Brand Sense I haven't met them yet, but they're doing they're creating aromas and sense for brands as part of that multi-sensory Experience, but you know when we think of a brand, I don't know about you, but I often tend to think about a visual element, a logo, colours, fonts, words maybe.

It's highly visual, and it should be. But brands aren't just visual. A big component, and I'm sort of seeing it anywhere between a point of a percent right through to 20% of a brand's equity might sit in the audio space. So we're thinking about, when I say the audio space, we're thinking about all the touch points where a customer might interact with your brand through sound or audio and there's a lot of them. There's contact centers, what do you what are they hear when they're

transferred or put on hold or the contact center is shut. There's event spaces, there's workplaces, there's retail environments, there's apps, there's websites, there's also the audio component in the videos that you and I make. There's opportunities to do things with voice apps. The States and Canada are well ahead of Australia in that than we are, but moving beyond that there's you know immersive audio gaming there's a bunch of things that we are well within our wheelhouse so 77 next month we'll be launching Sonic branding and we'll move into not just a video production but it'll be a video production and audio production or Sonic branding company and I'm really excited about that I think that's a part

it's a smaller market but it's a less competitive market and an overlooked section by a lot of companies particularly here in Australia. Brands that I think are doing it really well are like Mastercard and Mercedes but yeah not happening in a really cohesive way. I mean companies will have all these touch points but there's no cohesion in what they're doing there's no strategy you want to sort of build that that sense of emotional connection you want you want you want brands to be able to hear the next evolution of the audio and know exactly what brand it is in the same way that if I played you a James Bond, the latest James Bond soundtrack and didn't tell you what it was, didn't introduce it, you'd know

exactly what it was. You'd know the franchise because it's got some key elements that are common to every track that they've ever done. But yeah, there's a good opportunity to use that sort of methodology or blueprint as a way to treat brands in this sonic space. So that's a 2025 and onwards journey for 77 productions. Love it. That's a great goal to tackle because yeah, it's hard to find new ways for brands to stand out and providing that other aspects in your service offerings is definitely going to help them

quite a bit. I actually heard even when it comes to multi-sensory branding and marketing, I've heard that some companies are even experimenting with smells you know, smells in a way. And, you know, and I was thinking about it like, oh, that's so true. You know, like if you smell a McDonald's burger, you already know what, what brand you're thinking of at that point as well. So it's like, there's very particular smells, even with certain companies and brands where, uh, you're going to be able to make certain distinctions, you know? And, you know, if you can master one certain kind of sensory aspect,

like that's a good one definitely to do. And but yeah, and before we kind of like go, we usually ask how you would come up, how you came up with the name for the company, but it's kind of, you kind of gave it away that, you bought and packaged it right right from the start eh? That's right. It happens to be my year of birth 1977. Oh okay. Which was just a chance and I often wondered I was lucky enough to meet the founder. So it's actually had... I'm its third owner. It's had a life.

That's true. Yeah. Wow. Well, it was with the agency before, right, Kirill? Yeah. Yeah, yeah, yeah. Tim Smith, the founder, I was lucky enough to meet. He's a great guy, and he told me the backstory for it, if you want to hear it. Yeah, let's hear it. Sure. He was looking for something grand and ethereal and he was into numerology and apparently 777 is the number of God. Correct me if I'm wrong. Oh, it's a bit grand. It's a bit grandiose We'll just scale it back. 77 Too many 7s. I wasn't expecting that but that's that's the origin story. So there you go. You have it That's awesome.

Nice. Did he tell you why he sold the company? It was actually a post-production company that was servicing the media agency and I think it was just an offer to do something you know to get out and do something more in line. I think he went back to working in a digitally creative environment in a corporate more corporate environment. I think initially he intended to stay on but It was good to good to reconnect with him and Get his get his blessing feels like it's in good hands and it's going in a good direction. So nice

It's interesting to hear how it was like a one It was one type of company before it went on with the ad agency and the ad agency kind of grew it and turned it into its own kind of self-s kind of grew it and turned it into its own kind of self-sustaining entity essentially and then it was ready to be shipped off but uh i i guess uh i i think we did cover it but like did uh the ad agency did they say why they wanted to cut it off again uh i don't remember if we mentioned that. I think they said it wasn't being profitable. It was difficult to measure the profit because the revenue wasn't being attributed either was the costs. I was sort of doing that in a rough in a pretty rough manner in the background. It's just a different economic pressure that they were under from, from a sort of external source. So,

too much to focus on, like with an ad agency, like there's so many different service offerings that you have. And if there's one, one part of the business that's not working as good as like, say other parts, it's probably easier for them to just, you know, like chop it off and then just focus the, all the other resources into the aspects of the business that are making money. It makes sense, that's why video production companies are not, not all of us are also doing website design, other marketing aspects or stuff like that

because it's difficult for people to be able to do everything, right? Yeah, that's right. Even with the whole video land, it doesn't feel very niche when you look at you know, typography, motion graphics, 2D rig characters, shooting, immersive technology, AR, VR, XR, it's a big space to play in itself. I think it deserves its its own its own bucket Nice yeah, okay. Well, I think that's a good point to end this

So guys if you want to follow Anthony go to 77 so the numbers productions calm dot a you because he's Australian And then if you want to follow him on Instagram where's your Instagram here is it just 77 productions yes I think so yeah double check that okay yeah I'll check that quickly we always we always never know the exact handle right you gotta you gotta add it on your website it's 77 dot productions on Instagram okay tick tock as well are you on there too no tick tock what happened couldn't cover it guess not well you got to get on there what's

happening in Canada with tick tock is that still a thing? Oh, here it is. Here it is. Yeah, yeah. I think in the, I thought they unbanded in the States. I'm not sure. I'm not sure. I think they got a bit more time. Well, we'll see. Yeah, yeah. They got, they got, they got a couple months until, until it's gone. But that's a whole separate episode we can dive into. All right, so we really appreciate it. Thanks for the opportunity to be on your podcast. Thank you. Good talking to you both. Great chatting with you as well. Thank you. Thanks for listening to this episode of Creatives Grab Coffee. Please make sure to follow and engage with us on Instagram, TikTok, LinkedIn, YouTube, and your favorite podcast app.

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