IT’S A SONY!
Why the technology giant still leads the way
Back in 2009, when the global financial crisis was at its zenith, Sony Disc and Digital Solutions president Dieter Daum, commented, “When market conditions are difficult it is entirely understandable when companies become more conservative in their outlook and more averse to risk. However, we live in an evolving technological landscape and people’s media consumption patterns are changing quite rapidly.
We see it as a priority to keep abreast of these new developments. In particular, consumers are looking for increased mobility. Digital Copy is one example of how new technology can enhance our ability to watch our favourite movies and TV programmes on the move. At Sony DADC, we continue to invest in the future of the home entertainment industry. Investing to make sure that we continue to provide best in class service and support to our customers.”
Daum is known to have his finger on the pulse. So is Darren Houghton. Darren came to Sony with a vast background beginning his career in finance, he moved into logistics, (working for a company that supplied parts for Jaguar cars, Land Rover and BMW among others). He credits this company’s training programme with his early development. He then held positions in client services, marketing and operations.
“We were running global distribution & manufacturing sites and delivered significant improvements in efficiencies using lean principles and Kaizen philosophies, the target was to move away from whole batch process and move to a just in time service”
In 1999 Darren was offered a contract with Jaguar’s North America division. While his previous role with the company taught him operations management, this was a more logistical experience.
“I spent a few years running the North American market which is a challenge because if you plan to bring parts over to the US, you had to try to find a port that wouldn’t go on strike. You had to find a way through Canada and the Panama Canal.”
He learnt a lot in the US, but due to family commitments he decided to move back to the UK. Back in the UK Darren picked up a job with Deluxe Media as a project director. He immediately
saw a necessity for change.
They had made a lot of transition in the business, but I knew there was an issue when I first went in. I kept seeing all the signs in the warehouse. Staff was talking about RDL. I asked them what that was and they told me it was ‘recently departed label’. That didn’t sound too good.
“What Deluxe Media had done was taken over another company, then poured in a lot of smaller ones. However they didn’t realise that every company needs a significant amount of focus on managing their business, because every business is different. They were used to managing very well organised big film studios, but all these little independents needed a completely different mindset.
“They didn’t put enough focus, enough resource, supply and service into the operations.”
Darren turned the operations around and looked at different opportunities to integrate some of the business models into Europe. He spent time in France and Sweden, but the landscape changed when Sony bought Deluxe Media in 2006.
Fortunately for Darren they kept him on, but he was challenged to prove himself by the Sony executives and was determined to demonstrate his ability. He says the good thing about Sony is that they are focused on people, processes, performance and relationships.
“Sony gave me the opportunity and the first year we were running the business in the UK we were doing about 27 million units in film and music. The following year we grew that to 50 million units but didn’t make a profit. The reason for this was that we were taking on a lot of new clients, which proved cost prohibitive. We were also building a business at a fast rate, so it was a challenging time.”
Darren’s goal was to streamline the UK division and define it. He put structures into place and the following year the UK arm turned a profit, after two more successful and profitable years he was offered a job in Australia. The plan was to head to Australia in November 2011, but fate had other ideas and delayed the move.
In August 2011 the London riots occurred. London burned for 12 days. Sony DADC’s clients lost 28 million units. According to Darren it was the complete disaster scenario that you never expect.
Nothing can really prepare you for this level of disaster. Images around the world showed a country gone mad, but as the entertainment clients Sony deal with would say, the show had to go on.
“We were fortunate. We had a business continuity plan in place. The fire broke out at 10.30pm, by one o’clock in the morning my senior management team assembled in a hotel with the plans for what to do. By 8am the following morning they already had all the fastest moving titles ready to be replicated. Within 24-48 hours, we were distributing out of a temporary site next to the manufacturing site.”
There’s a lot more to this story as you can imagine, but a crisis of this nature gives you a great idea of how a successful company operates in times of turmoil. The clean up was efficient, no nonsense and everybody knew what role they had to play and the new facility was ready by June 2012 – built on the same site ensuring the future for the remarkable team.
Darren describes the event as character building, but would hate to see anything like that happen again.
In the UK Darren was the general manager running distribution. In Australia, the country he has resided in since March 2012, he has the responsibility for the distribution, manufacturing, printing, graphic services and digital business and the New Zealand distribution site as well.
“It’s a pretty broad role and really challenging, but enjoyable because you’re involved in so many different things. Every day is dynamic and every day is very different. The entertainment industry is challenging, it’s fast paced and we’ve got to adapt and change the way we do things to actually stay ahead of the competition but also support our existing clients and potential future clients. We’re offering something different. Retail is becoming tough, but we’ve got to focus on working with the retailers, to make it easier to for the stores to support the category. We need to streamline our processes to delivery cost effective solutions for our clients.”
The challenge in Australia, as it is around the world, is that in an age of digital download, the physical package is declining.
“It’s going to happen, there’s nothing that’s going to change that; look around, you’ve got tablets, you’ve got live streaming, you’ve got downloads and you can do all of that through your TV. I remember as a kid I had three channels. A child today with only three channels, how would they survive? No matter where you go you can get product, whether you download it to a tablet, to your phone, or on your TV. It’s a challenging market, but there is still a market for physical package media.”
In fact the numbers are still quite healthy. Darren says they will manufacture 60 million units in 2013 including CDs, DVDs, Blu-ray and games.
This year the Australian arm of Sony DADC has undergone a significant transition to meet those challenges.
“We started the year off with some very clear strategic initiatives. We outlined where we want to be in 12 months, three years and five years. When I first came over last year we had a 12-month strategy that we reviewed 12 months later.”
The refocus is clearly working. Under Darren’s guidance Sony DADC has won new clients for including Beyond Home Entertainment, Disney, Twentieth Century Fox as well as winning back old business.
“The strategy for winning it back was proving to be the best at what we do at an affordable price. It also meant having the team all on the
same page, where everyone is treated equally while being really focused on delivering results.”
Darren has form in facilitating mergers having overseen the 2013 acquisition of Entertainment Distribution Company, which was previously owned as a joint venture between Sony Music, EMI and Warner Music.
Decisions also had to be made in the shrinking New Zealand market. There were three different distributors, in a small market including Village Roadshow and MDG.
“We already distribute for Sony Music, Universal Music and Universal Pictures (including FOX and Paramount). There was no way three companies were going to survive, so we made a decision to take over Village Roadshow’s distribution center and also take over MDG. We have moved Sony Music, Universal Music, Fox and Paramount into the one site and will be moving Sony Pictures, Disney and Warner into the new site in QTR1 2014. It means we’ll be working very closely with the clients and retailers to deliver a simplified supply chain model.”
Finally, Darren is overseeing the print side of the business, which he says is an exciting, dynamic part of the business. Sony had invested heavily in this area and they are now designing, printing and assembling point of sale displays that are being used in most retail outlets including the grocers. They design a lot of product for launch including PlayStation and Sony Music.
“We really do everything from start to finish with regard to the entertainment product. We can say to a client: ‘give us your content to manage, we’ll produce, manufacture, distribute and deliver it into retail. We’ll collect the cash, we’ll pay you the money, then you can just focus on what you need to do, which is focus on getting some good content because that’s what consumers are crying out for’. We are seeing growth in TV content and have just finished the manufacturing and distribution of the hit TV series Breaking Bad which has had a phenomenal success.”
Darren has a great deal on his plate, but there is so much more to achieve. The future growth will come from the Digital space where DADC is a key player in content management and aggregation, TV Commercial and Music Video clip distribution. Sony DADC has recently added new major clients providing asset management and global digital distribution
Digital is an area where we really need to grow, but we’re still focused on growing all areas of the business including graphic design, physical distribution, manufacturing and print. Whilst continuing to grow our traditional business we are investing in new technologies and broadening our service offering to other business sectors.
“It’s not only about growing the business but how do we continue to be profitable because ultimately we’ve got to deliver a profit. We do this through investing in future development to leave another legacy to go forward with.”
Which brings us back to fast moving technology. Sony is at the forefront leading the way in phone support technology, media and the balance between how people want their content delivered. And Darren is clearly aware of what needs to be done to stay ahead of the game.
Darren believes there needs to be greater activity in the digital space.’
Managing Director Darren Houghton