Good luck: design firm Big Machine scored a major coup in its industry by revamping the graphics of the newsmagazine show '20/20'.

WHEN all it takes to start a graphics design house is a home computer, some software and a little moxie, how do you fend off competitors?

Buy them a drink.

Ken Carlson and Steve Peterson, founders of Big Machine Design LLC, themselves upstarts in the business of designing television graphics for shows ranging from ABC's "20/20" to Fox's "Joe Millionaire," have built their business by bringing competitors close rather than trying to outrun or underbid them.

"The competition is crazy, but it's friendly competition," Peterson said. "We'll be having beers together with guys from another company, and we'll start talking about work, but you'll notice we always leave the names of the clients out."

For companies as small as Big Machine, which has five employees and did around $500,000 in revenues last year, there are more than enough projects to go around. As a result, the partners are often on the phone with people they're friendly with at other designers or special effects houses, helping each other work through software problems.

Fueling this cooperative competition is what Carlson called an unending need for new looks on TV shows.

"Networks farm out work because they are seeking a different creative direction than the one that their staff designers have produced," he said. "Also, it's less risky for a network to outsource overflow work to a third party than it is to hire someone temporarily who may be untested."

In a corner of Hollywood crowded with post-production companies, Big Machine subleases a 1,000-square-foot office from Sonic Pool, a post-production firm specializing in audio that shares its digital editing studios and specialized sound software with a handful of smaller firms in the same building.

There, Big Machine designs and renders the text and loges that make up introductory segments, end credits and promotional spots.

Small but crucial

Carlson and Peterson met in Los Angeles in 2001 when they both were bidding for a freelance graphics job on a pilot for the USA Network. (Carlson was a producer, but wanted to do the graphics work, too).

As it turned out, he and Peterson, both Florida natives, had started their TV careers in the late 1990s at a Hollywood, Fla. station. After finding more common ground, they decided to go into business.

Big Machine's first significant job, designing a demo that John Malone's Liberty Media Corp. presented as part of a pitch for a proposed cable channel, helped leverage more business. The channel never launched, but such pilot projects have become regular jobs for Big Machine.

"We pretty much started with that job," said Carlson, 30. "We got it as soon as our door opened. We don't have any outside investors or seed money, and we've never had any debt, or taken any loans, so that job was vital."

These days, the competition is keener than Carlson lets on. "It's incredibly hard for small companies like them," said David Berrent, a producer who consulted on the redesign of the newsmagazine "20/20." "The equipment they have isn't incredibly expensive. It's a question of what you do with it. There's tons of people around doing graphic design, and someone can always do it cheaper."

Berrent hired Big Machine to create the show's opening graphics and teasers and had it design a template that would allow editors to plug in video and text, as needed. The show rolled out its new look in October.

One key, Berrent said, is avoiding any particular style. "When you put out thousands of channels of television, people have to remember it," he said. "It has to be an instantly recognizable brand of what that show is."

Peterson said the landscape of the industry changed in 2001 when Pittard Sullivan, the Culver City-based entertainment marketing and communications company that dominated the market for TV design, went out of business.

"They were a monster company," Peterson said. "They paved the way for companies like ours. After they closed, people just weren't putting out the big budgets for graphics like that anymore. The first budget line that gets cut into is graphics."

In fact, small shops like Big Machine contributed to the demise of Pittard Sullivan.

"There have been a variety of market factors," Alan Schulman, who headed Pittard Sullivan's New York office, told Advertising Age's Creativity magazine in 2001, "from a lot of creatives moving in-house ... to desktop platforms ... that can put two people in business in a garage."

Like most contracts, Carlson and Peterson got the "20/20" project through referrals. Other jobs come through responses to projects put out to bid by networks or production companies.

Adding their high-profile contracts to the demo reel is a factor in securing a steady stream of projects.

Within a couple months of starting the business in 2003, Peterson, Carlson and the other designers spent several hours watching zoo animals mating so they could design a logo for a nature video, "Sex in the Zoo."

It might've been an educational experience, but it was one that didn't make it onto their reel.

PROFILE

Big Machine Design

Year Founded: 2003

Core Business: Computer-generated graphic design for TV production

Revenues in 2003: $209,000

Revenues in 20011: $525,000 (projected)

Employees in 2003: 2 full time, plus contractors

Employees in 2004: 5 full time, plus contractors

Goal: To expand market reach to include more profitable and higher profile projects, without altering the organizational structure 

Driving Force: The ability to express visually the concepts that producers want and continuously come up with unique visuals