Thursday, December 4, 2008

The Final Customer

This isn't a doomsday scenario about there being only one customer left. It's about the fact that while people work for companies and companies work for companies, relatively few of them are the final customer, and that puts everyone at risk.

When you get your hair cut, you are the final customer. You're not getting your hair cut so that you can somehow resell it to someone else. But many of us work for companies whose customers are not the final customer. If you work in animation, your company's customer may be another studio, TV broadcaster, film distributor, or retailer. They are the people who ultimately sell your work to the audience. If any of your customers misread the market, your company will suffer and you may be laid off as a result. The people working in animation production are helpless to control their fates.

The Animation Guild Blog has some quotes from industry veterans. The whole thing is worth reading, but here is the heart of the matter:
What artists in animation don't understand like they should is that companies don't care about them. Artists want to believe that companies do, but it's not the way things are....

It's nothing personal. They're not trying to be mean or cruel. They just have their budget to get down and you're a hindrance to that. So they get rid of you. Nothing personal about it at all.
This is absolutely true, as are the comments about why older artists often become the targets of companies looking to save money.

We know, just from reading the papers, that the people who run companies can be guilty of bad decisions. Large financial institutions like Lehman Bros. have disappeared and we may be watching the death of General Motors. We are trusting our livelihoods and our futures to people who are really no smarter than we are. This being the case, we should trust ourselves more.

There is no sale without a final customer. The longer the supply chain between what you do and the final customer, the more likely that somebody in the middle is going to make a bad decision that is going to affect you. The best position to be in is selling directly to the final customer. That way, you are not at the mercy of the companies in the supply chain.

Ironically, you are at the mercy of your customers, who will probably outnumber the people you are currently selling to. However, because of their number, each final customer has much less power to damage you. Losing one customer or ten when you are selling to final customers will hurt your business, but not as much as losing one company or ten as your clients. The good news is that companies you sell to have enough money to pay you well and to allow you to build your organization. The bad news is if that money is withdrawn, your are unemployed and your company is bankrupt.

Animation artists are too far down the supply chain. We are dependent on too many people between us and the audience. In the next year or two, we are going to see many companies shrinking their workforces and others disappearing all together. Many unemployed artists will struggle to survive until companies start expanding again, at which point they will be happy to return to work. The smart ones will try and figure out a way to sell something to the final customer, because that's the most secure place to be in the long run.

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