How a property-project Aussie became a hardware-making billionaire for Spielberg’s next generation
Blackmagic Design’s Grant Petty has transformed Hollywood’s tech elite into one of the most innovative makers of inexpensive filming equipment. Thanks to the pandemic, disregard for outsourcing and an army of YouTubers, his business is booming.
All of 2020 and half of 2021I was working until 2 a.m. every day because I was writing the code that runs the business,” says Grant Petty, CEO and Founder of Blackmagic Design.
The 53-year-old billionaire is not joking. He despises outsourcing, which is why he literally writes every SQL program that runs the internal processes of his Melbourne, Australia-based company, which has 1,500 employees and $576 million (turnover). He is also known for starring in hour-long instructional videos for Blackmagic products like the Ursa Mini Pro 12K Digital Cinema Camera. When the pandemic hit, Blackmagic (which makes its own 209 products, unheard of in the hardware business unless your name is Samsung or Sony) had to share parts between its three factories in Australia, Singapore and Indonesia. Rather than hiring someone, or even delegating the task internally, Petty rewrote the workflow software linking the inventory databases.
“People see it as a weakness that I write the code myself,” he says, arguing that on the contrary, Blackmagic has avoided the blockage that many companies have encountered trying to reconfigure their supply chains during Covid. because they depended on external consultants and software vendors. . “I think we have a huge problem with outsourcing in the western world.”
If clubbiness, opaque accounting and exorbitant costs epitomize businesses in the Hollywood ecosystem, then Petty and his provocative, do-it-yourself approach make Blackmagic Design a wall-breaking revolutionary. His 21-year-old company is best known for making low-cost professional motion picture cameras, electronic switchers and other specialty equipment used in television and film production. It also makes a free software known as DaVinci Resolve which is used for color grading, special effects and for editing video and audio.
Blackmagic products are behind big-budget Oscar-nominated movies like Don’t look up and Spider-Man: No Coming Home, but its main customers are budget-conscious YouTubers and independent filmmakers. Over the past two years, this market has exploded as shutdowns have caused a surge in demand for professional-grade home equipment.
“I must have recommended their systems to hundreds of drum teachers during the pandemic,” says Jim Toscano, a New York drum instructor who uses Blackmagic’s $1,300 ATEM Mini Extreme switcher, hooked up to seven video cameras trained on his drum kit, to teach students in real time. “Musicians were floundering and looking to do online teaching.”
In 2020, 31-year-old film school dropout Julian Terry used his Blackmagic camera to shoot Do not look, a six-minute horror film set in his room in Los Angeles. Some 4.5 million YouTube views later, he was hired to direct a $10 million feature film based on his short film. “The Blackmagic Pocket 4k that I shot Do not look was cheaper than my iPhone,” he says.
Other big buyers during the pandemic, according to Petty, were television networks looking to outfit their employees working from home.
For the year ending June 30, 2021, Blackmagic’s revenue nearly doubled from 2019, to $576 million, and its profit increased tenfold, to $113 million. Given its rapid growth and today’s heady tech valuations, debt-free Blackmagic could fetch $3 billion as a public company, making Petty and co-founder Doug Clarke, who each own 36%, billionaires on paper.
“The valuations are crazy. We haven’t made any acquisitions for a few years because everyone’s gone crazy,” sniffs Petty in a thick Aussie accent. “We all know that the tech industry is primarily a scam game. You live a nice lifestyle as a tech tycoon as you round funding until it all goes public and you can sell. Then you walk around with a business card that says “serial entrepreneur.” ”
Petty developed his oversized shoulder chip growing up poor in rural Australia after his father, an engineer, split from his mother, an artist and nurse, and the family moved to public accommodation.
“I remember being told to go back to the housing commission where you belong,” Petty says of his college days, when he learned to code on an Apple II. “But I was obsessed with electronics, so I was sitting at the bottom of the pecking order thinking, hey, nobody knows that stuff.”
“Cloud licensors are like slumber merchants. You must continue to buy from me and the more loyal you are, the more you will be penalized. It’s as if your dog did something nice and you beat him with a stick. ”
After earning a certificate in electronics from a technical college in 1991, he ended up working in Singapore at a TV post-production house where he maintained expensive AV equipment that his employer had to rent for $1,000 an hour.
“I realized that the class system I saw in my country town applied to the television industry as well. It wasn’t really a creative industry,” Petty says, noting how point the venture was prohibitively expensive and exclusive.Determined to build affordable equipment, he initially focused on capture cards that would allow television creators and filmmakers to transfer video to personal computers for editing, rather than using custom machines costing hundreds of thousands of dollars.
In 2001, Petty and software engineer Clarke founded Blackmagic. Less than two years later, they introduced DeckLink, a $995 Mac-compatible card that could handle uncompressed high definition video. Their closest competitor was charging around $10,000.
Petty didn’t stop at video capture cards. In 2009, Blackmagic purchased the assets of da Vinci Systems, a struggling developer of color grading hardware and software which it sold to Hollywood post-production houses at prices ranging from $350,000 to $850,000 per unity. “We thought we could potentially turn it into a software product and bring it to the Mac platform where creatives could use it,” says Petty. “When you go after hungry people and make them more powerful, you realize that the fundamental thing you’re offering is freedom.”
A year later, he kept his promise. It released a software-only product (now called DaVinci Resolve) priced at just $995. After another year, he made it a free download.
“Cloud licensors are like slumber merchants,” he says indignantly, referring to rivals Adobe and Avid. “You must continue to buy from me and the more loyal you are, the more you will be penalized. It’s as if your dog did something nice and you beat him with a stick.
Despite the fact that Blackmagic’s software is now free, converting professional video editors accustomed to other legacy programs is a slow process. While DaVinci Resolve dominates in color correction, it lags far behind Adobe’s Premiere Pro and Avid in video editing. Its digital cinema cameras, whose prices start at $1,000 and go up to $6,000, may have a better chance of gaining market share from industry leaders such as Arri, Sony and Red, whose equipment can cost up to $95,000.
“Arri’s Alexa is kind of the gold standard, and there’s a general snobbery about them,” says cinematographer John Brawley of Miami’s set of bad monkey, an Apple TV+ series with Vince Vaughn. Brawley shoots on an Arri Alexa Mini LF, which costs $60,000, as well as Blackmagic’s most expensive 12K camera, which sells for $6,000. “I would bring [Blackmagic cameras] outside, and often there would be grunts and rolled eyes from the crew. But by the end of the show, half of them buy their own cameras. Blackmagic gives me 90% of an Alexa for 10% of the price.
The cost savings are a big plus as filmmakers increasingly use visual effects in their films. Hear from Sam Nicholson, an Emmy-winning visual effects supervisor known for his work on The Walking Dead, Emergencies and StarTrek. His company, Stargate Studios, uses Blackmagic cameras to film ocean sets for HBO Max’s pirate comedy Our flag means death, with Rhys Darby and Taika Waititi.
“If you’re going to install nine cameras on a rig, you need to have at least 10 cameras on site. If those cameras are Alexas, you’re talking about $500,000. The studio won’t pay,” Nicholson says, noting that Our flag’The turquoise ocean scenes were shot in Puerto Rico, color corrected on set using DaVinci Resolve software, and played at 20k resolution on a 160ft wide LED screen surrounding the cast during filming on a sound stage in Burbank, California.
“How do you effectively virtualize reality? ” he asks. “You need a lot of cameras and a lot of data. Blackmagic and its entire ecosystem solve many of these problems.