TAN Poh Lam took a leaf out of Golden Village's book some eight years ago and, today, his Alliance Entertainment (Asia) Pte Ltd has become a major home video distributor in Singapore.
Mr Tan: As long as Singapore allows parallel imports, there will always be the probability of dubious retailers or distributors trying to pass off pirated products as parallel imports
He believed that people were willing to pay for more than just the home video, just as he noted that cinema-goers were willing to pay for more than just the movie.
So it isn't surprising that Mr Tan sees his Alliance as the 'Golden Village of the video business'. Golden Village was the first to introduce the concept of multiplexes. And although it charged a higher ticket price than the cineplexes, people were nevertheless attracted by the more pleasant cinema-going experience, given the wider screens and plush seats.
Mr Tan brought in Video Ezy after securing the master franchise rights of Australian retail chain Videoezy for Singapore in 2001. Video Ezy's rack rate is $5-6 and the average rate is around $3.50-$4.50. In contrast, customers at the typical neighbourhood video store fork out only $2 on average. Mr Tan banks on providing good customer service and product quality to woo customers. 'I'm here to provide a service, at a reasonable price,' the Alliance chief executive officer explains.
Mr Tan, who has more than 18 years of experience in the industry, first saw the promise of Singapore's small home video market when he was vice-president, Asia for Warner Home Video International. 'I've always felt that no matter how small (the market) is, there is potential. And you will never realise its potential unless you give it enough attention, and you allocate sufficient resources.'
However, being part of the Time Warner Group meant that the Asian home video division was restricted in terms of its freedom to devote more resources to the Singapore market. So, after being with Warner Brothers for 13 years, Mr Tan struck out on his own with Alliance in 1999.
The company is now the exclusive licensed distributor in Singapore for labels like Warner Home Video and Village Roadshow Pictures, as well as a majority of independent labels. It is not, however, related to Alliance Entertainment Corporation in the United States, which incidentally also distributes home entertainment products.
Alliance is the holding company, with two divisions. Alliance Entertainment (Singapore) takes care of product distribution while Hollywood Video does the retail side, mainly through Video Ezy. Current distribution channels include Carrefour, HMV, Mustafa, Borders, Poh Kim and Music Junction. Although its core business is in the Singapore market, the company has interests elsewhere in Asia, such as Thailand and Malaysia.
When Alliance's first stand-alone Video Ezy outlet was set up in Siglap in 2001, Mr Tan recalls, many friends doubted that the venture would succeed. They predicted that there would be no demand for VCDs and DVDs at the prices Video Ezy was charging, which were a rich premium to those of both the typical neighbourhood store and pirated products. But Mr Tan felt that despite the higher price, consumers would still be willing to part with their money if Video Ezy's products provided value for money.
Of course, long before the entry of Video Ezy into the Singapore market, there were already many neighbourhood video rental stores. But they did not offer much in the way of customer service and the breadth and depth with regard to the video titles, Mr Tan points out. How a business merchandises its products helps in drawing customers, he stresses. He thus envisioned giving consumers 'a better alternative'.
And the Video Ezy outlets across the island have done just this: both DVDs and VCDs are clearly displayed on racks and are categorised systematically according to new releases and alphabetical order, reflecting the company's belief of allowing consumers to 'touch, read, feel'. There is also both good copy depth and breadth.
Video Ezy has now grown to almost 30 stores in Singapore and is increasing in strength year-on-year. Mr Tan has proved his friends wrong. Alliance employs around 40 staff, who handle functions like finance, marketing, product management and design. On the retail side, the company has some 120 to 150 employees to run its Video Ezy stores.
Today, the biggest bugbear for Mr Tan are devious pirates and unscrupulous retailers who are passing off pirated products as parallel imports. 'As long as Singapore allows parallel imports, there will always be the probability of dubious retailers or distributors who will try to pass off their pirated products as parallel imports,.' he says.
While Mr Tan holds nothing against parallel imports, he feels that the Media Development Authority (MDA) can do more to send a more conscious message to deter pirates from passing off pirated products as parallel imports.
This problem is worsened, says Mr Tan, by the long time MDA takes to approve entire seasons of popular TV dramas. This creates a bottleneck of 2-6 months, thus contributing to a time lag between the acquisition of such titles and their actual release to consumers. This is partly why some consumers still form a willing market for video pirates. 'There has to be a process which allows legitimate copyright items to reach consumers expediently,' says Mr Tan.
In fact, the company's distribution business has been affected by this increase in parallel imports. However, this has been more than compensated for by the increase in Video Ezy's stature, says Mr Tan, who adds that Video Ezy's strength lies in the high quality of its products and customer service. Currently, the company is working with MDA to find a solution to allow it to clear more titles so that consumers have more choices, he says.
