Cornering the disc market
MUSIC’S ABRUPT FORMAT CHANGES during the last 30 years have claimed many industry victims, but St. Laurent CD and DVD manufacturer RSB imedia is thriving amid the upheaval
Don’t tell Richard Bélanger the CD is dead. His company, RSB imedia, pressed and packaged more than 9 million of them last year, the most since 2008.
If you own a copy of Adele’s megahit 21, it likely came from his plant in a St. Laurent strip mall. RSB got the contract from her Canadian distributor to manufacture the CD for the Canadian market.
“We’ve done more than one million copies so far,” Bélanger, 53, said during a tour of the premises.
At a time when large CD plants have virtually disappeared in Canada, Bélanger’s business is holding strong. RSB manufactures about 80 per cent of the music CDS in Quebec, has 60 fulltime employees and projected revenue of $11 million this year, he said.
In an evolving, competitive industry that has changed formats abruptly and repeatedly in the last 30 years, claiming many victims, Bélanger has shown remarkable resilience.
The key to his longevity, he said, was tailoring his business to the Quebec market, whose smaller volumes didn’t interest the large manufacturers.
By taking orders the majors would not, Bélanger built a loyal client base. By growing at a measured pace rather than expanding too quickly, and investing in equipment rather than real estate, he avoided the financial crunch that took down many larger players.
And by adding new divisions to his company, including DVD production, a website showcasing new music called postedecoute.ca and a service providing digital music to radio stations, he’s diversified his revenue stream.
In April, RSB added to its client pool by acquiring a small competitor, Magra Multi Media, a manufacturer’s agent specializing in the duplication, assembly and packaging of CDS and DVDS.
“My goal is to be the last one standing in the business,” Bélanger said.
He does have a partner now, however, chartered accountant Daniel Foisy, who’s helping execute his strategic plan for the company.
Bélanger initially hired him as a consultant in 2010 and the more Foisy learned about the business, the better he liked it.
Bélanger has been smitten a lot longer. The Laval native was a teenager when he got a summer job in the Côte de Liesse warehouse of London Records, a now-defunct Montreal-based record producer and distributor that employed his mother, Huguette, as a clerk.
His enthusiasm and attention to clients led to a full-time job in the sales department at London. “Producers would call us and we’d manufacture the quantity (of vinyl albums and/or cassettes) they need- ed,” he said. “We were the only plant in Quebec.”
In 1980, however, London shut down.
Bélanger’s entertainment-industry clients “didn’t know what to do. They were calling me, asking if I could help them out.”
He didn’t have the money to start a manufacturing operation of his own, so he became their link and broker with vinyl, cassette and eighttrack producers in Ontario. And thus began Disques RSB.
Orders of fewer than 1,000 cassettes didn’t really interest his Ontario suppliers, so Bélanger decided to fill that niche himself for his Quebec clients.
“I bought 50 Akai cassette machines, we connected them and I started a small tape plant here in the building, recording in real time,” he said.
As demand grew for cassettes, RSB added equipment, increased its own production volumes and outsourced fewer orders.
“From 1,200-1,500 (cassettes) a day, we increased capacity to 75,000 a day,” he said. “We got pretty big and pretty busy.”
By the early 1990s, however, it was clear the cassette era was coming to an end, and Bélanger wasn’t equipped to make vinyl records or CDs.
So he became a broker again, this time linking customers with Americ Disc, a large CD production-plant in Drummondville.
“That went well until the plant got extremely busy, and started to concentrate on big orders,” he said. “My customers would wonder why they couldn’t get their 1,000 or 2,000 CDs in seven to 10 days.”
That led Bélanger to invest in his first CD machine in 1996. “If I wanted to stay in business,” he said, “I pretty much had to get into CDs. I still gave the big orders to Americ Disc but kept the small ones.”
In 1997, he added a second machine, and in 1998, a third.
“One machine can do about 15,000 CDs a day,” he said.
His volumes grew, and Americ Disc noticed. The company approached him and became a partner in his operation in 2000.
Bélanger took the offer because he could see DVDs as a growing force in the entertainment space, and the cost of machines was prohibitive for a small player like RSB.
Americ Disc “was buying DVD machines, which cost a fortune. My thinking was, if I do a partnership with them, my customers will be well served. I’ll be able to supply them with DVDs and package them here.”
The partnership worked well, Bélanger said, “until last year. They called me Feb. 17, 2011, and said ‘we’re closing down the plant. We can’t afford to run it anymore.’”
Bélanger ended up buying two of Americ Disc’s DVD presses.
Eventually, DVDs and CDs also will run their course, but Bélanger isn’t worried.
“That’s why we’re doing all kinds of other stuff. When that physical product is gone, I’ll still be in music,” he said, “just in a different way.”