As everyone gets more time to think about Nikon’s announced acquisition of RED, it’s been interesting to see how many more questions keep getting asked, as opposed to being answered.
If you think about it, Nikon acquired RED to answer a question: when is Nikon going to get serious about video? Buying RED answers the broad question: Nikon’s now going to have a dedicated video lineup, centered around a well-established top performer.
What I and others are wondering, though, is about the smaller details.
RED is an innovator and very leaky. It meets regularly with and embraces customers. RED is also an intellectual property (IP) bully.
Nikon is mostly an iterator and basically leak free. Customers are kept at arms length. Nikon is also an IP trader.
While all of us can envision how some small changes could make RED’s product offerings fit into Nikon’s, it’s those corporate culture differences that are difficult to imagine how they will work themselves out. In other words, the actual integration of the two companies seems to be rife with potential culture problems.
On the product side, for example, RED not only gives Nikon a video division, but the RED products will integrate nicely with the Mark Roberts Motion Control automation that Nikon acquired several years ago. RED cameras already can be remotely controlled, but putting them in MRMC arms then gives you full remote control of everything. RED these days has moved to CFexpress from CFast, another Nikon-friendly product point. Yes, there’s the issue of lens mount (currently Canon RF on RED cameras), but that’s not a physically difficult thing to change, it just has some logical tendrils that will need dealing with.
However, on the cultural side? Big questions loom. But I have no way to guess how they’ll work out.
What I can do is use my imagination as to what would be the best thing to happen on the product side.
What Nikon can bring to RED is lenses and focus technologies, perhaps AI abilities, and access to IP that Nikon trades for. RED’s volume might not justify using Nikon manufacturing, but there are material and process advantages available if it does. Moreover, RED started as a fast-moving rebel, but more recently has had to cement it’s way in a more structured, mature market. Nikon has deep resources, including access to more money at lower terms than RED is likely to have, and that can be used to re-invigorate RED’s innovation.
What RED can bring to Nikon is a new set of customers with a potential for growth, in a market that Nikon had slowly moved away from. RED brings Nikon instant credibility in the serious video and cinema market, something that would have cost many many millions and years to try to do from the mirrorless hybrid platform. RED has a set of established video cameras and accessories that can continue to be sold and improved, as they’re highly competitive. Though as far as I can tell, the revenue from those products is probably less than US$200m a year, so it’s not going to be a huge impact on Nikon’s bottom line initially. Whether or not the engineers and patents RED brings to the acquisition are meaningful to Nikon is unclear. Finally, RED has two global shutter image sensors that could be used in other products (though they draw more power than the sensors Nikon is currently using). One thing that isn’t part of the deal are the RED Studios, which are owned by a separate company.
Okay, so how do we square those last two paragraphs together?
From my background and experience, I believe Nikon should keep RED basically intact and keep them pushing upwards towards Arri level. RED has lost a bit of its innovation and rawness—pardon the pun—in recent years, so it would be nice to see those resurrected to target every level of Holly Wood and the Streamers (sounds like a band name). Add in some of Nikon’s lens, focus, and bandwidth tech and there’s plenty of room for growth from the Komodo to beyond the Raptor. In other words, treat RED at the product level much like Nikon has treated Mark Roberts Motion Control. (Ironically, Nikon has had to add gears to existing F-mount lenses for MRMC.)
On the Nikon side, there’s clear need to bridge to the RED products from the Z8/Z9 hybrid capabilities. Perhaps take the RED Komodo image sensor and build the Sony FX type of body (dedicated video, not hybrid stills). Or take the Z8/Z9 image sensor and build a RED-type box to slot under the Komodo. There’s also clear need for Nikkor video lenses. Those things alone would keep a lot of folk in Tokyo very busy for the time being, letting other integrations take their time to flesh out.
Done right, lenses and a tweener camera would mean a clear growth path for Nikon Imaging/RED revenues.
The tricky part is actually on the customer side. Reduser.net, the primary RED support forum (75k members), seems to be not so keen on the acquisition, fearing that the RED they bought into and know will go away. Likewise, Nikon Z System (and DSLR) users aren’t keen on buying a bare bones 8K video body that starts at US$18,000, either (think more like US$25,000 for a usable system, sans lens). These are two very different customer bases that want and need two different types of product.
There’s a big gap between those customers. Moreover, those that are buying existing things in that gap tend to be younger, demanding as close to the top end performance with as close to the bottom end pricing as possible.
Bottom line: I don’t think the acquisition changes much of anything for Nikon’s current camera customer. Certainly not in the short term. Meanwhile, I don’t think it changes much of anything for RED’s current cinema/production camera customer. Certainly not in the short term. What I do think changed is that Nikon has found a natural addition to help grow the overall company, while RED has found deep pockets that will help them continue their dreaming.
Nikon has gotten smart about acquisitions and new business after decades of Precision versus Imaging managerial in-fighting. Good on you.
Now, where’s that Z50 II, Z6 III, and more lenses?
