| Entertainment Distribution Company: Entertaining Ideas |
| Distribution | |||
| Written by Eric Slack | |||
| Saturday, 01 March 2008 | |||
 Industry changes are a major concern for this entertainment industry supplier.
 “There is a commitment to grow the business through supply contracts, and we do look at merger and acquisition opportunities that would add to our market share,” said Tom Costabile, president and COO. “But more importantly, we are looking for market share in the third-party production and distribution arena.”EDC was founded in 2003, and became its own entity once again in May of last year. In 2005, Glenayre Technologies, a company specializing in messaging software, acquired EDC. At the same time, Glenayre purchased Universal Music Group’s (UMG) manufacturing and distribution facilities in North America and Europe. EDC and UMG entered into a long-term manufacturing and distribution agreement. The transition was seamless because EDC took over UMG’s manufacturing and distribution network, using the same facilities and staff. According to Costabile, relaunching the EDC name was always part of the plan to separate the company’s messaging operations from its entertainment services. With the messaging business out of the picture, EDC was ready to go ahead with its long-term strategy to create a consistent image for its entertainment operations. The company provides full CD and DVD manufacturing services, everything from mastering and graphic design to printing, packaging, and assembly. EDC is also an instrumental piece of its clients supply chain management operations. With a large footprint in the United States and Europe, EDC clients rely on the company for everything involved in the order-to-cash cycle. While the company has taken a wait-and-see approach on R&D for development of new products, it is tackling challenges surrounding process efficiency improvements and the development of ecologically friendly packaging head-on. “Research and development in a mature industry is a delicate balance that you have to maintain. On the new product side, we’re watching what the industry does through several large industry organizations we belong to,” said Costabile. “So first and foremost, we’re looking for operating efficiencies on the shop floor, and figuring out how to run recycled materials, with their inherent imperfections, through automated machinery.” Stormy weather ahead With the stability of a major client like UMG, EDC has established itself as a partner of choice for some of the leading companies in music, movies, and gaming. While keeping up with production levels has been a challenge, the greater challenge lies in planning for the future. As the industry continues to see a rise in consumer usage of movies and music on demand, Internet downloading, and file sharing, physical mediums like CDs and DVDs are rapidly going the way of the dodo bird. The battle between Blu-ray and HD DVDs, which Blu-ray appears to have won, is also something EDC has been watching. With so much up in the air surrounding the future of its core business, Costabile knows EDC has to be thinking ahead or it will get left behind. That is why its supply chain management services are crucial to success. “One unique thing EDC does is provide a total supply chain solution for somebody with intellectual property. Artists and labels can take care of their sales and marketing efforts, and we take care of the rest,” Costabile said. Despite the technological changes that will eventually consign CDs and DVDs to the same fate that befell vinyl records and cassette tapes, EDC’s industry knowledge and proactive decisionmaking should allow the company to forge ahead. For instance, expansion beyond North America and Europe into Asian and Latin American markets is a possibility. The experienced team of entertainment industry professionals comprising EDC’s senior management, with a combined history of several hundred years in the industry, also gives EDC the needed leverage to maintain and establish new relationships with third-party clients around the globe. An expanding global footprint and knowledgeable industry insiders gives EDC the opportunity to establish enough business to survive in the short term while the company devises long-term solutions to an industry in a state of flux. The company is also buoyed by its attention to customer service details. Each of EDC’s seven locations is electronically linked so things like artwork files, master recordings, and inter-office communications can be handled over secured channels. The company meets once a month with its largest customers and quarterly with all customers. With retail distribution issues, EDC gives its staff the autonomy to make decisions regarding day-to-day operations, only bringing major concerns to the executive level. EDC is also well aware of the concerns artists and production companies have regarding issues such as consumer piracy. But the main concern remains the evaporation of the CD market. Although EDC is approaching these market changes with a progressive eye on the future, Costabile knows no magic potion or silver bullet has yet been discovered by anyone in the industry. Although EDC’s solid foundation puts it in a good place to combat the coming changes, internal discussions about long-term strategy continue for now. “We are continuing to research alternatives and don’t have one specific answer,” Costabile said. “But more competitive pricing, absorbing third-party customers who need full supply chain solutions, and going after more of the independent music and film markets can help replace some of the erosion of the existing market share.” |
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© 2008 American Executive - RedCoat Publishing. All rights reserved.
American Executive is a RedCoat Publishing publication.
American Executive is a RedCoat Publishing publication.
