Training Films Leave Giants’ Hands

Want to bolster the marketing staff’s productivity or boost the sales staff’s morale?

Show a motivational video starring “Monty Python” funny man John Cleese. Or screen a video “hosted” by Ed Asner, Christopher Reeve or Bill Cosby.

If that fails, try a film “classic” featuring legendary football coach Vince Lombardi.

U.S. companies spent an estimated $1.5 billion in 1986 on industrial and corporate training films and videos, according to the Fredericks, Md.-based Training Media Distributors Organization.

Some of those films are considered classics in the industry. Others are what one film producer described as “fad videos,” ones tied to the latest best-selling management book.

Despite the evolution of newer technologies, industrial and corporate training films--which increasingly are in the form of easily handled videotape--”are still being used an awful lot in (corporate) training programs,” according to Tom Wotruba, a marketing professor at San Diego State University.

Computer-driven training programs and interactive videodiscs are making inroads, but “people will tolerate the old technology if it’s something that, as a manager, they can feel comfortable with,” Wotruba said. “And a well-produced audio-visual presentation (remains) a lot better than listening to someone talk.”

Host of Media Giants

That realization drew a host of media giants into the industrial-film arena during the 1970s. By the early 1980s, McGraw Hill, CBS-Fox, Xerox, Gulf & Western, Time Inc. and a handful of other large companies had their own training and motivational film production and distribution operations. They also built management training divisions that incorporated the films into seminars and training programs.

But during the past three years, McGraw Hill, CBS-Fox, Time, Gulf & Western and others have retreated from the industry. Most of them sold their operations to investment groups led by employees, and most training and motivational films now are produced and distributed by small, entrepreneurial companies that are clustered in Southern California, Chicago and New York.

Large corporations had been drawn into the industrial film business because they “saw a $30-million education business and wanted part of the pie,” according to Bill Ambrose, who led a management buyout of Time-Life Video in July last year.

But increasingly, the companies “realized that film makers are entrepreneurial by nature,” according to Peter Jordan, who, with co-worker Stephanie Glidden, acquired McGraw Hill’s educational and industrial film production and distribution business.

“This kind of business doesn’t work well in a large company,” Glidden said. “That’s particularly true for large companies like Time-Life and McGraw Hill. It’s just too much of an oddball operation for them.”

Carlsbad-based CRM Films, which Jordan and Glidden purchased, is a case in point.

Surfaced in 1970s

The company surfaced during the early 1970s as the publishing and film-production arm of the company that published Psychology Today magazine. During the 1970s, however, it was owned by Boise Cascade, Ziff-Davis Publishing and McGraw Hill.

In 1987, McGraw Hill decided to sell the operation to a competitor. When that deal fell through, Jordan, a former truck driver who now produces CRM’s films, and Glidden, who began as an office employee, put together an investor group that includes Bechtel Investments Inc., a venture capital arm of San Francisco-based Bechtel Group Inc.

Ambrose, who served 13 years as president of Time-Life’s industrial and corporate film division, “saw the handwriting on the wall” in 1986. On July 22, 1987, he and a group of private investors took over Time-Life’s production and distribution operation, renaming it Ambrose Video Publishing.

“What we and CRM prove is that you don’t need the private dining rooms and big company perks in order to survive,” Ambrose said.

Ambrose Video is best known for instructional and motivational films that feature well-known actors, including Ed Asner, Meryl Streep, Christopher Reeve and Cicely Tyson. Its best-selling video is “Stress Management: A Positive Strategy,” which is used by about 200 Fortune 500 companies, Ambrose said.

Management-Training Films

Chicago-based Video Publishing House Inc., formerly a unit of CBS-Fox Video, became a free-standing film production and distribution company in 1986, when the business was acquired by a group that includes now-chairman Von Polk and Kenneth and Marjorie Blanchard. The Blanchards also own Escondido-based Blanchard Training & Development, a management training company.

VPHI produces and distributes management training films that include films prompted by authors such as Tom Peters, Mark McCormick and John Nesbitt.

Larger corporations may have lost interest in industrial film production and distribution, but Bechtel Investments views the industry as a healthy investment.

“Our investment strategy is to look for companies that have value that has been overlooked by past owners,” according to John M. Duff Jr., a principal with Bechtel Investments. “But we’re also a patient investor.”

Patience is a necessity in a business where success is measured by how many thousands of copies are sold. Even “Second Effort,” a classic motivational film that features legendary football coach Vince Lombardi, has sold only about 50,000 copies, according to industry estimates.

Ambrose pegs the industry break-even point at about 1,000 copies. Production companies will spend as much as $750,000 to create an industrial film. Production costs are high because “we’re dealing with people who are raised on television, who have high standards,” one industry executive said.

Videotape Use on Rise

Production companies typically produce on film and transfer to videotape. During the past decade, film has fallen in popularity, and videotape now accounts for about 95% of the business, according to Bob Gehrke, executive director of the Training Media Distributors Organization.

Industrial film companies often utilize free-lance camera, sound and production help, especially in Southern California. The actors they use sometimes become household names for their work in commercial films and television. A close look at CRM’s films will uncover TV stars such as Michael J. Fox of “Family Ties” and Eric Estrada of “CHIPs.”

“There are people who make a living doing industrials while they wait for their chance in television,” Glidden said.

Films that are connected to recent best-selling books have an extremely short shelf life, she said. Other films, dubbed classics by those in the trade, can last for a decade or longer without appearing dated.

Ambrose described the film featuring Lombardi, the fabled Green Bay Packers coach, as “an amazing film. I don’t own it and I don’t distribute it. But there’s something about the man. . . . There’s something so very compelling about that man.”

Management buzzwords may change, but certain films remain relevant, according to Glidden. CRM, for example, in 1987 updated “The Pygmalion Effect,” a classic that was filmed during the early 1970s. But “we know that customers like it, so we were careful not to change it too much,” she said.

CRM updates its films in part to make sure the actors aren’t dated by their clothing. But “we also want to get the latest in (management) thinking in,” Glidden said.

British Enter Field

U.S. film production and distribution companies are facing an increased threat from foreign companies.

During recent years, two major British companies have begun to nibble at the U.S. market, the world’s largest for training films.

Rank Ltd., one of Britain’s leading film companies, recently acquired a Los Angeles-based film production and distribution company.

And, late in 1985, Video Arts Ltd., Britain’s largest industrial film producer, founded a U.S. subsidiary in Chicago. Video Arts offers movies that feature writing and acting by a distinguished group of owners, including Cleese and a handful of England’s leading comedy film writers.

The British arrival coincides with an industry push to cut down on illegal copying of industrial and corporate training films.

More than a third of the companies that rent, lease or buy training films are illegally copying them, Gehrke said.

One distributor recently won a settlement in a case that involved a bank holding company in Tennessee that had made “hundreds of copies of a film” for personnel at branches around the state, Gehrke said.

Another company recently directed a copyright infringement lawsuit against a division of Time Inc., he said.

According to Ambrose: “The problem is that we’ve got to charge $400 to $500 for one of our films, but we’re dealing with people who see ‘The Wizard of Oz’ available for $29.95.”