One year after the merger of production powerhouses Production Resource Group (PRG) and VLPS, chairman and CEO Jere Harris and vice chairman and chief technology officer HR “Rusty” Brutsché III sat down for a bite to eat with LD editor Marian Sandberg-Dierson on a steamy hot afternoon near the company's Mount Vernon, NY office. With a massive post-merger transition period coming to an end, the duo captaining the ship has a message to deliver: they're really just regular guys employing production professionals we all know — no corporate pretense here.
Some of you have called them names. Admit it. But setting the record straight was on the menu for this lunch, as were sharing thoughts on necessary growth and changes that will affect the industry as a whole. And with their combined experience in production management, engineering, and running successful companies, you'll be glad to be a fly on the wall for this lunch.
LD: Let's discuss the last year. How has the transition been?
Jere Harris: It depends upon in what area you discuss the transition. I think the merging of the two, from a people point of view, went better than we ever expected. We had two groups of people — previously competitors in their areas of expertise — come together, and I think in many places, there was a lot of enthusiasm. I can't say that 100% of the people thought it was the greatest thing that ever happened, but overall, it was in the high 90th percentile. There has not been a significant number of people who have left the company from either side, and we've retained the people we really wanted to stay. We're working hard to create a culture and the identity of the brand of PRG. At the onset of the merger, we called it the “new PRG,” and while we are not perfect and have areas to work on, we have made significant advances toward creating a new company that is focused on service and technology.
LD: When you say “areas to work on,” were these a result of the merger or preexisting issues?
Rusty Brutsché: They resulted from the way PRG was created, which was the purchase of many different companies and all the equipment that went along with that. We ended up with a very large inventory that wasn't the same and wasn't branded the same, and in many cases, the names of those companies were maintained for a period of time at PRG. It wasn't really until this merger that we made the final decision to brand PRG Audio, PRG Video, PRG Scenery, PRG Lighting, and drop all the other names. In the rental business, your single marketing presence is how the equipment looks to the customer, so when the truck opens and the gear rolls out onto the floor, we want it to look like it's our brand. We've spent a lot of time on cases, case design, and consistency to get the brand out there — and we're still doing that — so customers see us as putting a standard on equipment and focusing on the highest possible level of service. I think the first year has gone smoothly, as we really figured out the nuts and bolts of how the organization would really be put in place. It's now just down to refining the company and setting out on a path of continuous improvement.
We really want to provide the best service, the best equipment, and the best resources. But we live in a world where all this takes a lot of money, so it takes a really big company to be able to service customers in the way they want. A show with 500 moving lights might cost $6 or 7 million dollars today. When I started 30 years ago, we could put a lighting system together for $50,000. It's a different world with more advanced technology and huge networks. All this takes time, training, and high costs.
LD: One thing you said a year ago was that the merger would allow you to contribute to this “digital revolution,” and that movement would be very important to the future of this relationship. What's your take on the “C” word, convergence? How do see it affecting the technologies you put out, the way you deal with designers, and the industry in general?
JH: Convergence is reality, and there will be a natural progression over the next 20 years toward the integration of what we call a mechanical intelligent fixture today and a digital intelligent fixture. There will be, visually, a different vision or way that shows are done over time.
RB: Scenery will also be in there. The merger of scenery, video, and lighting is going to happen.
JH: We look at it from the lighting side. Having done a lot of corporate shows in my time as a production manager, the application of video in that market or how it was used in Broadway shows is much different from how it will be used in the years to come. What's not there yet and will take time to evolve is how we're going to control it, what device will play back and store images, and what the mechanism is to project or light the show. Since PRG merged with LSD almost eight years ago, we have invested millions of dollars in the development of the DMD [Digital Micromirror Device] and its technology. I won't comment on where we think that is right now, but I don't really think it's a viable alternative or effective enough to say, ‘Let's leave all the MAC 2000s at home and move to a completely digital light.’ In the next three to five years, there will definitely be an increase in application of DMD devices in some type of fixture.
RB: When you think of the digital revolution, it's really on several levels. The first is the control console itself, which has been digital for quite some time. The other is the data link between the console and the equipment, which has been DMX and is going to DMX-over-Ethernet, so that's a big trend. Then, you get to the stage side — either dimmers or automated lights — all of which, right now, are electromechanical devices using motors. When we move to digital lighting, where the luminaire has an electronic gate instead of a gobo wheel, you have to control that light with something. That's what media servers do, and their development is moving along in the industry.
Also, because there's not a DMD product that's bright enough right now, LEDs will serve the role as the delivery mechanism for a while for electronic or digital lighting. We're seeing really creative ways of using LED products — low resolution, high resolution, video walls, set pieces. We're getting a lot of punch in a show from LEDs because they're direct-view products, so you look right at the source.
I also think media servers will continue to control those devices for the moment, but that puts pressure back upstream on the console. We went from one parameter per channel for conventional lights to 20 or 30 parameters on an automated light and now to 500 or 600 for a media server. Control is definitely an issue, so we're putting a lot of energy into our Virtuoso console — with feature sets to address these needs and make it suitable for lighting and media servers, even incorporating highlights of the Icon desk — and into media server development so we can have a product that will interface well with a control system.
LD: And this signifies convergence as you see it?
RB: Convergence is not just coming. It's absolutely here. When you look at shows, there's a huge amount of video, and it's required from a customer point of view. Look at Paul McCartney at the Super Bowl Halftime Show — tremendous convergence there [LD, April 2005]. How it evolves from here is uncertain, but the day will come when we have a nice, bright digital luminaire that will project images while you have electronic control of everything, and that will be another huge change, as we'll be dealing with 200 to 300 video projectors at a time. That will be really dramatic.
LD: How did these changes play into the merger?
JH: The merger of VLPS and PRG was not a merger out of greed and dominance. We were both at the end of our ropes, and left alone, neither of us could get to the next level.
RB: We also each needed to keep buying gear to balance each other out, but it was getting to the point where we were over-saturating an already over-saturated market.
JH: We're not getting rich from this merger, and I don't think any of the manufacturers out there are either. PRG always maintained five or six R&D people in Birmingham [England] and a few in Los Angeles, and VLPS had 14 people in Dallas. Together, we have 20 people working together on new technology that is specifically aimed at the needs of our customers. We're not coming out with a new wash light, but we are working on niche products. We're going to make maybe 1,000 high performance, expensive products, and we don't have to build in a profit, like a manufacturer does. Our goal is for the customer to get 100% of the value.
RB: We're making products for our own rental business. It's the original Vari-Lite model that we used for a long time, which I like because it enables us to build a product that is really tailored to the top-end, professional part of the market. Someone needs to fill that role in the industry.
JH: We'll be focused on new product development a lot over the course of the next five years.
RB: The other big part of a light operating is the infrastructure that distributes power and data. It's up to us to distribute power into our equipment on-site. In the history of Vari-Lite and going back to the VL1, we always created our own power and data distribution system. Now, we're starting to use our own Series 400. Jim Bornhorst and John Covington were the key engineers who developed this system. It will distribute power for automated luminaires and other equipment, and it also distributes Ethernet over 500'. The cable design allows us to run longer links than normal. We've also built a complete routing system into the racks so we can route any DMX universe to any output in the system over the Ethernet. It provides a lot of redundancy and network management that's built into the equipment to make it more stable and allow us to do bigger shows, more efficient shop preparations. We used a lot of technology from the computer industry to minimize the number of connections, and the system is modular so you can have any voltage you want. This was a huge investment in service for us. The first system is on tour with Coldplay.
LD: Other than the products, why should a designer use PRG? What's your biggest asset at this point?
JH: It's unequivocally the people that work here. We have the best people.
RB: These are all the same people that the industry has been working with for years. It's just pooling together a huge number of talented people that were spread out in different companies and organizing them under one roof that has all the resources. It takes quite a lot to do the size shows we're doing now, and the disciplines and knowledge required are so varied that it takes a large organization and an entire team. We have the resources to provide solutions for anything from technical to design for sets, integration, audio, lighting, you name it.
RB: We have a very broad inventory of equipment. We have a lot of choices for designers, and we try to do that in every location.
LD: So, you have some standardization across your locations?
JH: That's one of the main things we've worked on since the merger, and I would be the first to tell you that everything wasn't perfect on either the PRG or the VLS side before. We've tried to recognize what each has done better, and we're not perfect yet, but it's moments away!
RB: That's right!
JH: We are working hard to have processes that will help bring about a product to make everyone happy. One of the challenges for PRG was that we were an amalgamation of many different companies — lots of equipment with different boxes, colors, logos — and from an infrastructure point of view, it took large sums of money to have standard cases that fit into trucks the same way, etc. We're making progress in making the entire kit fit together — every chain hoist will have the same plug; every light will have the same Series 400 power distribution. It just won't happen overnight.
LD: Well, it's certainly a lot of inventory to standardize.
JH: Even if it were a small inventory, as a rental company, you just can't turn around and decide you want everything new. We'd love to snap our fingers and just make everything look the same and put new connectors on everything. That won't happen immediately, but believe me, it is coming.
LD: How does this affect the manufacturers?
JH: I know this will be controversial, but I actually think the manufacturers have too much say about the quality and the technology that gets out to the customer. If you've watched the technology over the last eight years, what's new? Nothing.
RB: Well, LEDs.
JH: LEDs will be around and evolve in the next 20 years. Maybe we'll see an LED Source Four at some point. I just think the diversity of what we have as a production company is still the best advocate for the creative process. We allow designers to paint with all the brushes available, and we try to push manufacturers in a direction to make unique products.
RB: And in the end, the customer wants something different. Lighting is like painting, and you have to use different lights to get different strokes, textures, or looks. It's important to have variety in design and so for us, in our inventory.
LD: So what's the future like for PRG?
JH: In the short-term — two years — we're focusing on our infrastructure, standardizing equipment, and achieving the highest level of customer service. The quality of service and people caring about what they do is the most important thing we can provide. And products — we're working on merging the Mbox and the EX1, called Mbox Extreme, which we'll be showing this fall.
RB: I think we'll continue to expand. We're always looking for opportunities to grow. All businesses have to grow to survive, but we're also committed to doing it in a measurable way where we can still serve our clients and improve our output and product — not just expansion for expansion's sake but building our various brands.
JH: I think we're also going to start to see convergence of lighting, audio, video, and scenery and how they all communicate.
LD: Audio also? All show technology?
JH: Yes. Here's an analogy: first, you have to see the performer; then you have to hear him. Then you want to make a stimulating environment around him. As our industry and products evolve, we'll go back to the old days — like when there was “a designer,” who was the costume designer, the set designer, and the lighting designer — a person who has the vision for the entire project. There will still be a lighting designer and a video designer and so on, but there will be one person bringing it all together. I don't have a timeline for when that's going to happen, but it will. One console will be able to trigger all cues — probably the lighting console.
RB: I think we'll also see the whole aspect of movies enter our business more. Once you have a media server, a digital delivery device where you can project a video image, you'll be able to create little films on the fly from the lighting desk by using embedded 3D graphics, images, and animations. My son is an animator, and that's what he does every day. The technology is there, and it's tremendous. As computers and software evolves, a show designer will be able to create movies at the desk in real time.
LD: And mixing live video with a VJ, like Artfag designed into the Beastie Boys tour [LD, January 2005].
RB: It will enable a show designer to do things that couldn't be done before. The day of the gobo is definitely reaching an end. With digital light, it hasn't taken long for us to get beyond the idea of using a gobo. Everyone wants video clips. And yes, mixing live video with effects. Lighting designers will be show producers, like back in the days when there was no real specialization. Technology is going to allow a boarder vision.
LD: Right, the pendulum swings the other way, and everything comes full circle. Then, maybe it will swing back again, and we'll be embracing divergence, instead of convergence!
RB: Right. We're definitely happy with the transition and our financial situation right now.
JH: The company is just run by Rusty and me, and we rely on all the people who do what they do well. There's no corporate anything, and sometimes, the market misconstrues that we're big and scary, but it's just us. And it's not bad for the industry to have a big company — maybe not five huge companies — but at least one. We know there are other good production companies out there, and we know they're our competition. But if we don't grow, we die. Most of our prior acquisitions happened because people called us and offered to sell. Our continued growth will probably be outside the traditional — more as the market grows organically and not through mergers and acquisitions.
RB: There's also been pressure from the industry on smaller companies. They couldn't necessarily invest all the money required to turn their inventories automated, so they didn't survive the technology. For the future, I think people have an insatiable appetite for entertainment, and it all requires what we do.