Voiceovers by Gregory Houser
A man, a martini, and a lot of microphones.: What a little risk analysis can teach us about ISDN

Wednesday, April 1, 2009

What a little risk analysis can teach us about ISDN

Kara Edwards recently mused the question "are your kitchen cabinets stocked?" in which she retells Nancy Wolfson's comments regarding the question of whether a talent needs ISDN in their home studio as a means to discuss our "preparedness as voice actors to handle anything that comes our way". For those who have the time, it's a great read.

My comment is this: do you really need ISDN? Preparedness aside, and yes you should be prepared for a multitude of options, risks, and opportunities which will come your way (I still have a "go bag" ready, so I'm pretty keen on preparedness), I think that there's a lot to be said by asking oneself if we need ISDN for your home studio.

Before we start, I need to be perfectly clear that what we're about to do is very simple, and also very personal. If you're not honest about some of the metrics used, then this isn't going to work. If so then you'll have a better idea of whether or not you really need ISDN for your voiceover business.

Second point, you need to accept the probability that ISDN is a dying medium. It's becoming harder and harder for people to get ISDN lines installed for domestic use, and the originators of the medium are moving towards VOIP, and other IP-based technologies. ISDN was originally used for those businesses (please note that it was designed for business use, not for the home consumer) for those applications which required a dedicated line, and for video teleconferencing solutions. Technology has changed, and while we're moving on from ISDN, one of the cool things is that the recording industries quickly realized that talent could use ISDN as a means of providing an acceptable quality recording from the talent's home studio to a remote studio location. Don't get me wrong, ISDN isn't going to die off tomorrow, but it is slowly fading away.

Now that we've got that out of the way, let's go onto our risk analysis. In a risk analysis we're faced with a risk, which is nothing more than the probability that a vulnerability (in this case, losing a booking due to lack of ISDN capability) will have some impact (for us, a financial impact and possible loss of reputation within the industry) on our business. Yep, it sounds bad, but there are four things we can do with our risk:

  • Accept the risk (go after jobs that might require ISDN and risk the backlash)
  • Remove the risk (choose not to audition for anything that requires ISDN)
  • Transfer the risk (develop relations with ISDN-equipped studios and retainer for access)
  • Mitigate the risk (purchase a codec or use alternate technology)
Since we all like to make money, the last two choices seem to be the sensible ones, right? But how many studios will let you have unfettered access to their place, especially if they've got a booking? Regardless of your rapport with them, a booking in-progress will always trump a "maybe booking". That narrows our choice down to one, mitigating the risk.

Now before we run off an buy an ISDN codec, we now need to think about our cost benefit ratio. If you're losing business because you don't have ISDN, then it's an easy thing to do. However, most talent aren't in that position. You might like to think that you are, but probably not.

Regardless, you want to take the dollar value of the bookings you'll be losing without ISDN (which is the asset value times the exposure factor of the risk) and then compare that with the cost of the countermeasure (the ISDN codec plus costs for installation, monthly costs, etc.) divided by expected years of usage. Put another way:

Risk <> (Countermeasure / years of expected usage)

We need the Risk value to be greater than the value of the Countermeasure divided by years of expected usage. It's only when that occurs that the countermeasure (in this case the ISDN codec) becomes a worthwhile investment since we're reducing costs loss by the risk by investing in the countermeasure. For example, let's say that I expect $10,000 of new voiceover business that is ISDN based to come into my studio over the course of the next five years. The risk is that I'll lose that $10,000 since I don't have ISDN. Now let's say that I can get an ISDN codec for $3,500, with additional costs of $200 for the installation fee, and with a monthly bill of $100 we have an additional $6,000 to spend for the monthly charges. Our Countermeasure cost becomes $3,500 + $200 + $6,000 for a grand total of $9,700 over the course of five years time. Let's hit the equation. Since we are doing this on a per year basis, we'll average the costs our over the five year interval.

Risk = $10,000 / 5 = $2,000
Countermeasure = $9,700 / 5 = 1,940

Risk < Countermeasure, but just barely.

The addage within the voiceover community is that you'll know that you need ISDN when you know that you need ISDN. I truly believe that, but in the interim it's a good idea to use simple cost and risk analysis techniques to better understand just what you're getting into. The rate of return might not be worth the risk of investment for some, in which case, use of an alternative technology (Source Connect for example) or working with the local studios to mitigate the risk are your best bests.

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5 Comments:

Blogger Bob Souer said...

Greg,

Excellent insights. Nothing less than I would expect from you, my friend.

Be well,
Bob

April 18, 2009 at 4:01 PM  
Anonymous Kara Edwards said...

Greg-

First off, thanks for the plug! Second, this is all great information- thank you. I will be sure to pass along the link to this blog everytime I get the question, should I install ISDN? So far, I love having it- but I didn't install until I knew I had a regular job that required ISDN.

Keep the great blogs coming!
Kara

April 18, 2009 at 4:59 PM  
Anonymous Anonymous said...

I NEEDed to know this!!

Thank you for this no-nonsense approach to helping me answer my own questions about ISDN.

I already knew that it was a waning technology, but, since so many established in the business have them, I was wondering . . .

Now, many thanks to you, I know how to decide . . . now AND in the future!

Art

April 18, 2009 at 8:52 PM  
Anonymous Debbe Hitata said...

Greg, this information is clear, concise business sense. Thank you for taking the time to share this invaluable information. May your booking karma be tripled!

April 19, 2009 at 12:01 PM  
Blogger Greg Houser said...

Thank you for the compliments everyone. I'm glad that people are getting something out of this post.

I'm not telling people not to invest in ISDN. If you're booking with it, and you use it a few times per month, then it's paid for itself. But a lot of people do not understand the technology itself, or its prospects for long-term viability. And really, most do not understand that they might not actually need it based on the level that their voiceover business is currently at.

There's nothing worse than investing thousands of dollars into something which you'll barely use. And that's the trap which a lot of VO talent find themselves in (though it's not just limited to ISDN).

Take care, and happy voiceing!

-Greg

April 19, 2009 at 12:33 PM  

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