Andrew M. McIntyre is the first to agree that in business, bigger doesn't necessarily mean better. But he is yet to be convinced that his AME Inc. can't be both.
Since opening seven years ago, his Burbank company has become one of the biggest post-production service firms for movie and television studios, enabling McIntyre, 42, to turn his $90,000 investment into stock worth $25 million.
AME's annual revenue has shot up from zero when it was founded in 1980 to $26 million for the fiscal year ended Sept. 30, 1986. The growth hasn't stopped. This year, revenue for the nine months ended June 30 was $27 million, up 54% contrasted with the same period a year ago, whereas profit nearly doubled, to $2.8 million.
McIntyre isn't stopping there. In the past year, AME (short for Andrew McIntyre Enterprises) bought two other post-production companies, TAV and Bluth Video, for $5 million. McIntyre also took AME public last April, selling 33% of its shares, which raised $16 million to help pay for more acquisitions.
'We Have the Customers'
McIntyre said the acquisitions give AME a broader range of services and more capacity to meet the studios' increasing demands. "We're not buying size-38 pants when we have a size-32 waist and trying to fit into them," he said in a recent interview. "We have the customers."
"One premise he recognized was that there is an economy of scale in this business," said Richard O'Hare, a vice president of 20th Century Fox. "The more you have, the more efficient you can be" in terms of equipment, he said. "It is a one-stop-shopping concept."
AME's principal business is taking movies and TV shows, which are usually shot on film, and transferring them to a master videotape so the studios that own the films can distribute them for syndication to broadcast or cable TV, or sell to the lucrative videocassette industry in the United States and abroad.
Recent movies such as "Beverly Hills Cop II" and "Dragnet" were transferred to videotape by AME. So are such hit TV shows as "Cheers" and "Miami Vice."
The film-to-tape transfer can take 100 hours for a full-length movie and cost more than $50,000 for one videotape "master." From that master, AME might then make 200 to 300 "submasters" for TV stations, and another submaster that would be used to print thousands of videocassette tapes for home viewing.
Converting film to tape requires a lot of attention to detail. A movie like "Dragnet," intended for theatrical release, is shot on film with the understanding that a powerful light will project the image 70 feet to a big screen. If that picture were transferred to tape without any adjustment, the different light intensity of a TV set would not be able to reproduce the same colors, or at least the same richness of color. So AME adjusts the color frame by frame as it transfers the film to videotape.
AME might also narrow or slightly shrink the picture frame of a wide-screen movie to make it fit on a TV screen.
But any major adjustment is done only with approval from the studio. "We're careful not to alter the artistic value of a film," McIntyre said.
Besides the film-to-tape work, AME also provides computer animation, graphics and conversion of videotapes to the electronic standards used in foreign countries.
At first, however, AME primarily made videotape "dubs," or copies. Its timing was fortuitous. The company opened for business in 1980 just as cable TV and videocassettes were soaring in popularity. Other post-production houses enjoyed the same boom, but AME still grew like a weed.
McIntyre said the difference was AME's service, backed by its low prices and investment in new equipment.
"In 1979 it took three or four days to get commercial duplicates," McIntyre said of his rivals. "When we opened you could have them in four hours.
"We're a 24-hour, seven-day-a-week operation," he said. "We never say 'no' to a client. Never, under any conditions."
Not surprisingly, executives of AME's rivals--which include local competitors Compact Video, Post Group and Pacific Video--emphasized that AME does not have a monopoly on service. And Fred Rheinstein, chairman of Post Group, said McIntyre got rolling mainly by undercutting everyone else's prices.
"In the beginning if somebody charged $775 for a dub, Andy would do it for $750," Rheinstein said. "You keep doing it for $750 and you're going to get work. But don't forget, when he got the dub for $750 he had to do it right. It's one thing to get it (the business) and another thing to keep it."
The studios, although careful not to offend the other post-production houses, agreed that while AME's prices might have snared their attention, its service keeps them coming back.
Michael Spiegler, director of operations for Paramount's TV group, applauds AME's "very quick turnaround, very attention-oriented" operation. "He's the consummate service man," said O'Hare of 20th Century Fox. "You ask for it, he gives it to you."