Catching up with Bill Stellman, SVP, CFO, Sony Pictures Home Entertainment World Wide
Stellman: The question of how do we, as executives, ensure that our subordinates as well as our superiors understand the critical levers that drive our business. At the same time, how do we ensure that they are not distracted by the headlines of the day, which can often misdirect the critical decision making processes.
How can manufacturers and retailers better collaborate?
Stellman: The answer is simple andcliche: We need to look for win/win scenarios. Too often we pride ourselves on the "killer deal" where we win and they lose. Unfortunately, these killer deals only lead to tension and, more often than not, renegotiations instead of creating an environment of trust and true partnership. It is the latter environment that spurs creative and innovative business models. These new business models create consumer demand and take us to the next level of our vender/customer relationship. These are the elements of a sustainable and repeatable business plan that drive long term value -- for both sides!!!
Can you explain why trade funds management is important to the retail side of your business?
Stellman: The entertainment industry is a unique industry. It's a bit of "trendy fashion" (what or who is hot right now) blended with technology (for example, special effects). We specialize in new product introductions with 25 to 30 new major theatrical films every year. We launch and re-launch new and classic television properties as well as create and sustain new franchises via direct-to-video products.
As we develop promotional plans for our products at differing stages of their lifecycles, we use benchmarking as a tool to determine the optimal trade fund investment. Unfortunately, this is the most difficult of all our challenges. There are similar films with common genres, comparable box offices, familiar franchises, etc., but nothing is truly comparable.
As we promote our product through its lifecycle, our need to better understand what we are promoting, how often we promote it, where we invest and how the investment impacts the long-term value of our products while remaining competitive has become extremely difficult.
What additional challenges do you face regarding trade fund management in a relatively "young" industry?
Stellman: The home entertainment industry is considered a "newly maturing industry" when compared to the classic consumer packaged goods companies and, as a result, we are not as developed in trade fund management as many of the companies that are more than 100 years old. We have experienced unprecedented growth over the past 25 years, and the focus on cost management (supply chain, trade spend, marketing, etc.) has become tantamount, similar to the way many classic consumer packaged goods companies have evolved over time.
Now, as the market and economy change, we are forced to adopt a more classic and disciplined approach to every part of our business and trade spend management is No. 1 on our list. It impacts our customer, our products, the consumers and our bottom line. The more we understand how our retail marketing efforts impact consumer demand, then the more competitive we will be in the marketplace, the more successful we will be with our retail partners and the more value we will create for our shareholders.
FIRST JOB:
Dishwasher/busboy
WHO INSPIRES YOU?
People who can develop strategies, gain consensus and understand the implications of executing a concept successfully
HOW DO YOU REWARD YOURSELF?
By exercising
FAVORITE MOVIE:
Transformers: Revenge of the Fallen
FAVORITE MUSICIAN:
Elton John
FAVORITE VACATION SPOT:
Lake Tahoe
FAVORITE SPORTS TEAMS:
Fullerton High School Varsity Water polo [his son's team] and Fullerton Rangers Silver Elite Club Soccer [his daughter's team]
PROUDEST MOMENT:
The day I got married
BIGGEST CHALLENGE:
Balancing work and my personal life
MOST RECENT TECH PURCHASE:
PLAYSTATION 3
Hobby:
Paintballing
Favorite Quote:
"The harder you work, the luckier you get."-- Gary Player