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Manufacturing model airplanes is a BUSINESS, not a hobby

I continue to be amazed at the number of posts on various modeling forums devoted to discussions of what certain manufacturers should undertake for the their next model kit. The post typically takes the form of “Why doesn’t Tamiya/Eduard/Hobbyboss/Whoever produce a {fill in a subject} in 1/x scale?”

Responses then flow about how this person or that person would or would not buy them, and why this other model is certainly more critical to the needs of modelers, and how could anyone possibly think of doing either another kit of that model, or of something so esoteric?

One post I read even suggested that modelers should offer to crowdsource a project. Maybe it would work, maybe not. (Since originally writing this in Sept. 2013, Airfix has done just that, though it’s only on older kits. ~jb)

Now, discussion is exactly what forums are for. It’s the expected behaviour. It’s the digital equivalent of standing around the water cooler. But sometimes people lose sight of the reality.

Manufacturing models is a business. The kind that endeavors to make money. The kind that has some form of costs- payroll, materials, marketing, research, shipping, packaging.

And it’s an expensive business.

In an interview I did in 2007 with the owner of Accurate Miniatures, Linda Habovick, she mentioned that the molds alone for a new tool kit could cost $150,000-$200,000. That was in 2007, for just the molds.

Now add on top of that the actual production, printing decals, instructions & boxes, shipping it all (often overseas- which brings in costs of its own), then marketing & distributing the kit. All along the way there are people holding out their hands to be paid, whether it is a manufacturer under contract in China, or the person who answers the phones in your office.

In discussions I’ve had with other folks in the industry, it seems that a cost of $250,000-$500,000 is not unheard of to bring a kit to market.

In the Accurate Miniatures interview I referenced above, Linda said they typically produced about 5,000 kits in a run. That’s $150,000 at $30 a pop.

You do the math…. how much profit would a kit that costs $250,000 to produce earn on a single run that nets $150,000?

Yeah, it’s a negative number, ain’t it?

You don’t need to be a Harvard MBA to figure out that you either have to produce more runs (which adds cost), raise prices, or go out of business.

Then there is the problem of deciding what to produce

Model companies do keep their ear to the ground for trends, market desires, etc. They have to. But they also have to pay attention to previous trends and sales, available research for a particular subject, market competition, and just a general idea of whether the subject fits with a company’s goals for its own position within the industry.

Reading 50 posts on a popular model forum where people say “I’d definitely buy two or three!” does not constitute a reason to gear up the machinery. Because I can testify from my own (non-modeling) business experience that for every idea you float to customers about a possible product, only a handful of the ones who respond positively will actually put their name on the check. So the clamor of what modeler’s say they’ll shell out cash for is at best only part of the mix.

At the same time, I’d imagine there would be the need to ignore the “we don’t need another.. whatever” in such-and-such a scale. Yes, there are a lot of Mustangs, Spitfires, 109s, etc. on the market. But do you know why?

Because they sell. Pure and simple. Just because Theodore O. Curmudgeon uses ALL CAPS to bang out a message on a forum about how he can’t believe yet another of that kit has been released (and cross-posts it to twenty other sites) doesn’t negate the fact that a reasonably executed kit at a reasonable price- even if it’s been done before- will sell.

And that’s why they keep pumping them out. And not the kit that a relatively small sampling of the market feels should be produced. (Yes, I’d love to see a modern-tool, injection molded P-66. But would that really sell?)

Yes, there are anomalies I suppose. Revell’s PV-1 comes to mind. But in general, you’re more likely to see something you’ve already seen than that Farleigh Fruitbat Mk. XXIII prototype.

Of course, you have to calculate the biggest problem

Based on the numbers used above, it’s likely going to take a model company several runs of any particular kit to make a profit. That may take a few years. And I don’t know if you’ve noticed, but there is a common thread among the majority of the “traditional” model building market.

We’re old. And getting older.

Yes, there are young modelers. But you go to any show, any hobby shop, any online forum, and you’re likely to see as many discussions about diabetes and heart attacks and poor vision as you are Eduard and Tamiya and Alclad.

And the modeling business has to pay attention to that. Because at some point, you reach a point of critical mass (or lack of mass, really) where the demand for any kit on the market (in terms of people willing to buy it) is too low to justify the cost of producing it. And with the current mass of modelers heading towards the dusty end of the display shelf, at some point the business motivation for producing the types of models we expect will go away. The businesses will have to respond to the emerging markets, the ones they can reach. And most critically, the ones who are still alive, not to be too morbid.

Yes, we are a few years away from that point. But it’s there. It reminds me of a study I once saw when I was in the newspaper industry. It tracked newspaper penetration into  generational groups. The net result of the study was that by 2043, no one will be buying newspapers as we know them now. The audience will have died out.

Just today, Airfix announced a new range of “Quick Build” models, built of snap-together blocks, much like Legos. They are pre-painted, and just snap together. Does this mean Airfix will stop producing traditional kits? I doubt it. There is still a very, very viable market for kits. In fact, this has been called “Modeling’s Golden Age” by more than a few people. But the sky is always brightest and prettiest right before the sun sets. Right now we happen to be at a point in history when the largest generation of people who built scale plastic models as kids now have the leisure time and dollars and infrastructure (read internet) to buy anything from anywhere at anytime. So there is a lot of money to be made.

For a while.

Yet as Airfix’s move shows, reshaping the product line is essential to keep a viable business model that produces revenue. And this is not their first move towards a “new look” for modeling, and they are not alone, by any stretch. Ever notice how Hobbyboss’ EasyBuild 1/72 kits are exactly the same as the pre-built, pre-painted plastic you can buy already completed? The fact that Hobbyboss releases them as Easy Assembly kits almost seems to be a secondary market.

So what’s your point in all of this?

Thanks for reading this far. 🙂

The point is that while discussing what you’d like to see produced is a great and wonderful thing, it helps to have a realistic view of the reality of the business side of it. Your opinion is important to you, and maybe others will agree with it, others not. But a model company may see things differently.

Learn to live with it. It may not be that you are wrong, but simply that you don’t have all the information they do. And your motivation is fun.

Their motivation is simple: money. The same as it is for any business.

2 thoughts on “Manufacturing model airplanes is a BUSINESS, not a hobby”

  1. 20-odd years ago, Monogram (when they were still in business as Monogram) decided to make two kit decisions based on the fact that the two subjects in question had been respectively either #1 or #2 (and interchangeably) on every FineScale Modeler modeler’s survey for as long as FineScale had been doing the survey. Wow, with that kind of continuing popularity and desire, Monogram’s marketing department concluded these must be highly-desired subjects and we will make a bundle if we do them. And they did them.

    They were the PBY-5/5A, and the Ju-52-3m. Excellent kits (not quite totally accurate as to a specific type, and the extreme rear end of the PBY really is wrong), but certainly well within the Monogram tradition of big 1/48 multi-engine WW2 kits that became classics and have been in production off and on ever since first released.

    They were shelf-sitters. The PBYs and the Ju-52 are in fact the worst-selling Monogram kits ever, and they contributed greatly to the fact Monogram got folded in to Revell. So much for “listening to modelers.”

    One thing companies now know, whatever the project, they bring their “A Game”. When they don’t, they get what Eduard got a year ago with their Bf-109G-6. Out-of-the-ordinary stuff (as witness quite a few of Airfix’s recent announcements) will be done, but at a price point that does insure financial success.

    1. Interesting: I have a least 2 of each of these models. Apart from the Catalina tail they are great kits, both to build as when completed.

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