Dennis Abboud took a risk and created one of the largest music and video distribution companies in the US.

When American Executive spoke to Dennis Abboud, CEO of Infinity Resources, for its January 2006 issue, the Itasca, Ill.-based movie and music distribution company was exploding. Although on paper, the company looks slightly different than it did more than a year ago, that trend continues today.

In 2000, Abboud was the COO of a book and magazine distribution company that wanted to participate in the emerging Internet marketplace as a fulfillment company. Playboy Enterprises, which at the time owned Critics’ Choice Video, Collectors’ Choice Music, and several other businesses, wanted to divest its non-core assets and offered up its video catalog business, complete with a brand new distribution and fulfillment center in Itasca.

“We didn’t know much about the Internet, but we knew how to put a product in a box and ship it out efficiently and cost effectively,” Abboud said. But when the Internet bubble started to burst, the company backed out. Abboud, however, still saw an opportunity. He worked out an amicable exit strategy with his employer and closed on the acquisition of Critics’ Choice Video in October 2000.

Dennis Abboud, CEO

After the bomb
Initially, Abboud’s strategy was to leverage Critics’ Choice Video, the largest movie catalog company in the US, to provide cash flow. Once Infinity Resources’ fulfillment business was up and running, it would phase out Critics’ Choice and concentrate on third-party fulfillment, but the dot bomb put that plan on hold.

“Internet companies were flaming out left and right, and those that survived didn’t have desirable credit ratings, so we decided to focus on selling products directly to consumers rather than selling services to other businesses,” said Abboud. “With Critics’ Choice Video, we already had the infrastructure in place, so it wasn’t too big of a leap.”

So as to not interfere with Critics’ Choice Video, Infinity Resources launched DeepDiscountDVD.com in 2001, which offered contemporary movies on DVD format at low prices and free shipping to a younger audience. The site was launched on a Tuesday in February, and by that Friday, the site crashed after receiving 450,000 hits. The company rebuilt the site to accommodate more volume and has never looked back.

According to Abboud, Infinity Resources buys DVDs directly from movie studios, enabling it to sell for less, and its efficient distribution system allows for free shipping. “Because of Critics’ Choice Video, we had a warehouse, a large inventory, a call center, good rates with our carriers, and relationships with the movie studios. If we tried to launch DeepDiscountDVD.com as a standalone business, it would have been very difficult.”

By the end of 2001, Infinity Resources had acquired Collectors’ Choice Music, the largest music catalog company in the US, and opened DeepDiscountCD.com soon thereafter. From there, the company began acquiring other video and music companies, including DVD Planet from Image Entertainment, including its retail store in Southern California; Heartland Music and Serenade Music from Time-Life Music; Digital Eyes, a company selling Japanese anime and esoteric sci-fi and horror movies; and Hep Cat Records, a music distributor out of Orange County.

But many of these product lines overlapped, so Infinity Resources has spent the last few years consolidating where it makes sense. For instance, it rolled DeepDiscountDVD.com and DeepDiscountCD.com into one Web site, DeepDiscount.com, which sells DVDs and CDs, as well as accessories, video games, and more than 700,000 book titles. It also consolidated DVD Planet and Digital Eyes. “However, Serenade Music is targeted toward African American consumers, so it made sense to keep that a standalone,” Abboud explained, adding that the company plans to launch an entertainment catalog targeting Hispanic consumers later this year, which will also stand by itself.

Acquiring companies and absorbing or consolidating their operations is not difficult with Infinity Resources’ shared back-end infrastructure. The CEO explained that the company’s HR, accounting, and administrative departments serve all companies under the Infinity umbrella, but each brand maintains its own identity, especially in the eyes of the customer.

Catering to customers
Today, Infinity Resources is made up of three key divisions. Its consumer division consists of DeepDiscount.com, one of the most trafficked sites on the Internet, and a Deep Discount store that will open in Naperville, Ill. this year. It still owns and operates two DVD Planet retail stores in Southern California, as well as DVDPlanet.com. Abboud chose to keep Heartland Music, Serenade Music, Collectors’ Choice Music, Critics’ Choice Video, and The Video Collection (originally started by PBS) as separate divisions as they cater to niche markets.

Infinity Resources’ distribution group, otherwise known as Infinity Entertainment Group, distributes movies and music to retail stores. According to the CEO, much of the product offered by this division, including 600 small record labels and several movie studio lines, are exclusive to Infinity Resources. “We license and own the rights to distribute all of Dean Martin’s and Sammy Davis, Jr.’s albums on certain labels. We are also the exclusive distributor of In Demand and Retromedia DVD titles for North America,” he said.

The third segment of Infinity Resources is its direct commerce services division, which provides fulfillment services to other companies that sell products online. Customers include GE, Playboy Enterprises, and Affinian Group. “Essentially, we are answering telephone calls, picking, packing, and shipping orders, and, in some cases, performing more in-depth business processes,” said Abboud, adding that Infinity Resources offers print marketing and creative design services, operations consulting, and e-commerce assistance.

Six Sigma to the rescue
To keep operations running smoothly in the midst of explosive growth, Infinity Resources adopted the Six Sigma methodology about three years ago. “Minor annoyances at lower volumes turned into big, fat, hairy problems at higher volumes,” Abboud said. Each member of upper management is required to at least achieve Six Sigma green belt certification, but some team members have gone above and beyond. Today, Infinity Resources has one master black belt, three black belts, and 15 green belts on staff.

The company recently finished a Six Sigma project focused on call center productivity. Abboud explained that customer service representatives used to navigate through 13 screens to place a single customer order, but with the help of a graphical user interface, that process has been reduced to three screens.

The phone system has also been upgraded to make serving customers easier. Infinity Resources’ phone system recognizes customers’ phone numbers and brings up their information before the agent even picks up the receiver. Customers can then be greeted by name. The company has also installed a voice-activated self-help line with which customers can track their orders without having to speak to a representative.

“It starts with looking at an overall business process and breaking it down into pieces. We eliminate processes where applicable and drive out inefficiencies so we can continue to delight our customers,” Abboud concluded.