When Heidi McLean was working as a freelance video producer in the 1980s, she saw an unfilled need to connect clients and production crews. The result was Crew Connection, Inc., which McLean founded in 1989, and PayReel, Inc., which she founded in 1995. Below, McLean explains how her businesses meet the demands of the evolving video-production industry.
What would you consider your industry?
Our world is video production, but it’s also become delivery as well, so webcasting. Most of our clients are corporations.
What was going on in the industry that led you to found Crew Connection?
I saw a need to connect clients with freelance production crews. We act as a broker of sorts. If you need a crew in Tokyo or Chicago, we can get it for you and tell you what kind of equipment they have and how much they charge.
How did PayReel evolve from there?
A lot of clients came to us and said, “We want to hire a crew, but they have to have workers’ comp.” Of course, independent contractors don’t carry workers’ comp on themselves; they don’t have to. And we couldn’t provide workers’ comp to independent contractors. So, we made them our employees for the day, month, year, whatever, via PayReel.
Has PayReel grown as the IRS has cracked down on independent contractors?
It has. In the past couple of years, more than ever, state and federal agencies have been trying to increase tax revenues by limiting who can be considered an independent contractor. So, if we can’t classify people as legitimate independent contractors, we make them PayReel employees. Some are daily hires, but we also have a lot of people who work full-time. We provide them with everything from performance reviews to benefits.
What other changes have you seen in the media world?
The equipment has changed. We’ve gone from tape to digital, from standard definition to high definition. It’s also gotten less expensive, with the exception of high-end, high-definition equipment.
Has your client base changed as prices have fallen?
On the PayReel side, no. Our PayReel client base is very solid; I use the word “sticky.” On the Crew Connection side, where we’re sending out production crews, yes. Clients tend to ask more for bits and pieces. Instead of saying, “I’m flying from Chicago to San Diego and need a crew there,” they’ll ask for part of a crew. The equipment has become small enough and inexpensive enough that the client is more apt to just bring a cameraman. Or, they’ll bring a camera and just hire a body.
Has that made the booking process more challenging?
Yes. It’s tough for us, because our crews come with their own equipment. Five or 10 years ago, everything was shot in Beta SP, and those cameras were $30,000 and up. Today’s cameras are $1,000, so anyone can have one.
How are you adapting?
We need to figure out what’s next, and maybe get more involved on the people end of things with payroll work. Persistence and patience have helped us. Some people who start their own businesses are serial entrepreneurs; they want to start a company, grow it, and hand it over to someone else. I stuck with my businesses and will continue to stick with them.
Do you have a lot of competition?
Our key driver isn’t competition because we’re in a specialized industry; it’s finding a way to appeal to a small customer base. That’s not to say we don’t move along with the pace; we’re always looking over our shoulders.
What do you think has led to your success in an evolving industry?
I don’t bite off more than I can chew. True entrepreneurs aren’t risk-takers, even though some people have that perception. Starting these companies wasn’t a big risk, at least financially. I’ve taken small, thoughtful steps.