Embracing Change Let us entertain you By Charles Mak Keeping the public entertained is a demanding business The first arrest in January this year for sharing copyrighted movie files over the Internet drew the attention and general approval of both the local and international entertainment industries. They took it as more than just an encouraging move in the battle against piracy and hope it will lead to further determined measures to tackle the problem. "Pirated goods are a headache," says Perry Yung, director, business development, Intercontinental Group Holdings Limited. "It is, though, a factor we have to deal with in the Asian market and we expect it to be a long-term struggle." It is just another of the challenges the entertainment group has learned to face in its 35 years of operations. "We have come through a lot and, especially in the last 10 years, our business has become far more diversified," says Mr Yung. "We used to focus on the distribution of foreign films and the development of chains of cinemas, but have now expanded to cover many forms of entertainment." Having started in the late 1960s by producing kung fu movies and distributing local films overseas, the group is now concentrating on multi-channel and multi-platform delivery systems. Mr Yung points out this makes full use of the latest technology and is what the market requires. In fact, understanding consumer trends has always been one of the group's strengths and previously led them to set up Multiplex Cinema Limited in 1982, at a time when more films were being released, and to establish Intercontinental Video Ltd to offer a home entertainment alternative. More recently, distribution via the Internet has been introduced. We will experience totally new forms of entertainment Unique needs "The market is segmented, so we need to address the unique entertainment needs of specific segments," explains Mr Yung. This has meant not just extending into cyberspace, but also founding subsidiaries to handle consumer products and interactive multi-media entertainment. The group already had a leading position in the animation market as an exclusive distributor for Walt Disney Studios, releasing blockbusters such as Toy Story 2, Finding Nemo, and the latest hit The Incredibles. This connection has helped in entering new markets and made it possible to take a long-term view. "We have, for example, high hopes of the China market and are progressively building a foundation," says Mr Yung. "A whole year was spent on product and market research and we have already released Shaw's film archive on VCD and DVD. The next stage will be to promote multi-channel entertainment and expand film distribution on the mainland." At the same time, quality independent productions from around Asia are being brought to international markets, which contributed to the group's 2004 turnover of more than HK$300 million. As business has diversified, a stronger team has been assembled to take care of sales, marketing and operational support. "We are constantly upgrading ourselves and pushing for better performance," Mr Yung says. "For instance, the release of an animated film requires a year's preparation. Voiceovers and subtitles are done six months prior to release and marketing activities must be planned long in advance. It is a complicated process and production costs must be tightly monitored." New style To cope with expansion, the workforce has grown from 80 to 200 in the last five years and extra resources have been put into recruitment, training and staff assessments. "We aim to ensure sufficient resources for the future development of each and every subsidiary and department," Mr Yung stresses. In parallel with this, there have been changes in the style of management. "That was a real challenge because everything used to be done by just a small group of people. As business has developed, we needed to transform from a traditional family style approach to a more structured and systematic method of management," he adds. The new business model adopted led to clearer policies, speedier decisions and better delegation. The need for decentralisation was acknowledged and key individuals were given greater authority in day-to-day matters. In a wider context, the group's efforts and position within the entertainment industry were recognised with the Distributor of the Year award at the CineAsia Convention in 2000. "Over the years, we have released a lot of big budget films, maintained close contact with film companies in Hollywood, Europe and Asia, and done what we can to promote the industry," Mr Yung explains. He believes that working in the world of cinema allows people to use both their imagination and practical experience, and he is optimistic about the future. "Life without films would be unimaginably dull," he says. "In the next five years, though, we will experience totally new forms of entertainment that go beyond the traditional movie experience. The entertainment industry will provide more than we can currently imagine." Then and now Before Business focus on film production and distribution, and developing chains of cinemas Smaller scale company with family style management Internal practices not guided by any particular business model Little attention to HR issues with fewer than 80 staff After Diversified group of businesses, now including home videos, online movies, related merchandise and multimedia entertainment, advertising and marketing Structured and systematic approach to management Decentralisation of decision making Emphasis on improving sales, marketing and operations Over 200 staff and efforts made to upgrade HR processes Taken from Career Times 4 March 2005 Your comments are welcome at [email protected]