The business model of the broadcast design business fundamentally shifted at the turn of this decade.

Once a field dominated by a handful of companies with the ability and infrastructure to create costly campaigns with proprietary tools, it is now a buyer’s market serviced by three times as many companies. The market for broadcast design is about $150 million, according to Jim Chabin, CEO of Promax and the Broadcast Design Association. That’s more than in years past, but it’s being doled out in smaller pieces and those parcels are split between many more entities.

The switch was a result of a confluence of events. Not only was the business thumped by the dot-com tailspin in 2001 but the DNA of broadcast design was thoroughly altered by the move away from high-end proprietary graphics software and hardware and their necessary expensive editing suites to affordable and powerful desktop computers that could produce spectacular designs just as easily.

Many networks have also taken design services in-house to save money and control the image.

Networks that do outsource can pick and choose from more than 400 firms, a tripling compared to 10 years ago, said Mr. Chabin, whose organization kicks off its Promax&BDA 2005 conference Tuesday and continues through Thursday at the New York Marriott Marquis.

During the salad days of the late 1990s the broadcast design business was dominated by Pittard Sullivan, which had offices in New York, London, Los Angeles and Munich, Germany, and employed about 200 people.

That was a heady time for broadcast design: digital tools made splashy looks possible. Diginets were growing and needed design work, so did emerging interactive media companies. Pittard Sullivan’s client list was a Hollywood’s who’s who.

But at the same time, the Macintosh computer was emerging as an equalizing force -its capabilities made it possible for a designer to run a business from his or her home using an inexpensive desktop computer.

Also, the television business was consolidating and the era of cable expansion ended, leaving fewer clients to buy design services. What’s more, the number of talented designers coming out of school increased.

Finally, after the dot-com bust hit in 2001, it simply was no longer feasible for a firm of Pittard Sullivan’s size to exist anymore. In 2001 Pittard Sullivan closed shop. But echoes of its impact remain. Many of today’s boutique agencies splintered off from Pittard Sullivan and now they rule the business.



New Rulers, New Rules

But they operate by different rules. They have to be lean and lithe.

“You can’t charge $1,000 an hour for a Flame session anymore when you can get an entire shop for $1,000 to $1,500 a day,” said Steve Petersen, executive producer and co-creative director at Big Machine Design in Hollywood, referring to the Flame high-performance visual effects system. Big Machine has done graphics for TLC’s “Rocket Rigs,” ABC’s “20/20,” and MTV2’s “Hip Hop’s Toughest Rhymes.”

“You can do so much more on a desktop and there are a million other people who [can do it],” Mr. Petersen added. “There are no more big massive budgets for show opens and promo packages. The market is totally flooded with good designers working out of their bedrooms, so they don’t charge that much.”

Mr. Chabin, of Promax&BDA, said today’s 400-plus broadcast design firms average from five to 30 employees.

“During the heyday of Pittard Sullivan, there were probably 20 to 25 firms that you thought of on your short list and now the short list is probably so large I doubt many Promax members could name them all,” he said.

“You want to be perceived as a tight-knit group of fast-moving highly capable brand-smart professionals who can move on a dime and turn around a project quickly and efficiently,” he said. Small firms include Spark, which fashioned IDs for Showtime’s “Fat Actress”; TwinArt, which crafted titles for Fox’s “Arrested Development”; and Bird Design, which is reshaping Outdoor Life Network.

Another change is that many networks have taken design services in-house. ABC, once a huge client for Pittard Sullivan, now does the majority of its design internally. Comcast-controlled cable networks G4 and E! also boast in-house shops. “The days of the big design firm are long gone,” said Mike Benson, senior VP of marketing at ABC. “We pretty much do everything in-house.”

ABC saves money by keeping designers on staff for the bulk of its projects. Those projects are also more narrowly focused these days. Mr. Benson said this fall will mark the first time ABC won’t do a big star shoot for its fall lineup. Packaging and branding has become less network-oriented and more show-centric, he said.

G4 constructed a 10-person in-house design shop at its launch in 2002 to maintain continuity across its platforms, like on-air promotion, marketing and trade shows, said Julie Fields, VP and creative director at the network. She said the network will still farm out small projects to boutique agencies, but the majority of show packages, bugs and branded IDs come from inside. A design staff allows the network to move quickly on projects, she said.

“The biggest thing is you are more connected to the brand. You know what it’s about and there is no lapse in understanding,” she said.

It’s also a more cost-effective strategy, she said, though she declined to detail specific savings.

E! Networks made the decision to build in-house a “really strong mini Pittard Sullivan,” said Anne Epstein, VP and creative director for on-air design at E!, who used to work at Pittard Sullivan.

“The business model of design companies has changed since the breakup of Pittard Sullivan and the advent of little companies,” she said. “Everyone is keeping it small and using the same resources (freelance designers),” she said.

E!’s in-house staff includes about 20 producers and designers and services E! Entertainment Television, Style and E! International Network. While such a model also means carrying the cost of employees, Ms. Epstein said she never has idle designers or producers. “Everyone is 100 percent booked, and I have extra seats for freelancers. We have enough work to keep everyone busy,” she said.

But other networks still rely largely on boutique firms and freelancers.

History Channel farms out most of its design projects, said Michael Mohamad, senior VP of marketing at the channel. “I don’t believe you heavily staff up. You have a tight-knit shift and you outsource a lot and you manage that. I think you can get more work done that way,” he said.

Food Network relies on a mix of in-house designers and design shops, like the well-known Troika in Los Angeles.

That’s because a redesign, for instance, is best outsourced, since such a huge project would employ nearly all staff designers and producers, said Michael Adley, VP and creative director for Food Network. He’ll send redesign and branding IDs out of house, keeping stunting, promotions, specialty packages and other day-to-day jobs inside.



Back to the Story

Troika has created a number of IDs for the network, such as a partying carton of eggs and a “peeking” duck that looks at the camera from different angles.

“We use those as a device to tell a story, to provide a sense of humor, wit and personality,” Mr. Adley said.

The sort of work that Troika did for Food Network represents a rebirth in the design business of storytelling, said Steve Kazanjian, VP, creative motion at design shop DZN and the chairman of BDA. That’s a change from years past when many designs were made simply because they could be made.

“I think we became so infatuated with the tools and what they could do,” he said. “The shake-up of the industry awakened the need to focus on the fundamentals. … You’re not competing on design anymore. You are competing on concept now,” Mr. Kazanjian said.

Peter Robbins, the CEO and creative director of Bird Design in Hollywood, i
s currently working on the redesign for Outdoor Life Network. He said networks want a design that expresses their unique identity, rather than the coolest look. For the OLN redesign, he took inspiration from the decaled nature of sports like cycling, where riders’ jerseys are covered with patterns and logos.

“The new look kind of embraces the graphical nature of that sport,” he said.

Though the design business has shifted since the 1990s, there are growing creative design opportunities today in video-on-demand channels and new HD networks but nowhere near the explosion in the 1990s, said Jeff Boortz, president of design firm Concrete Pictures and one of the early Pittard Sullivan employees.

“The high demand for design services in the ’90s that encouraged specialization into broadcast design and even tighter niches like promo or network packaging is over,” he said.

To survive designers need to diversify their skills into multiple platforms, such as TV, broadband and interactive TV, and diversify their markets, he said.

“It’s a whole new business,” Mr. Boortz said.