IBF Presentation Final

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INTERNATIONAL BUSINESS IN FOCUS PRESENTERS: 1) CHEONG CHUN WAI A2943 2) WONG KAH JUN A3636 3) TOMMY YAP A3386 4) LAI CHUNG HWA A3251 5) CLARA LIM A3613 FOREIGN DIRECT INVESTMENT

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International Business in Focus

Presenters:Cheong chun wai a2943wong kah jun A3636Tommy yap a3386Lai chung hwa a3251Clara lim a3613

FOREIGN DIRECT INVESTMENT

Trinity Entertainment Inc.

Type : Subsidiary

Industry : Entertainment

Founded : 9 September, 1985, 29 years ago

Founder : Thomas Lim Tai Aun

Headquarters : Mont Kiara, Kuala Lumpur, Malaysia

Products : Motion pictures, Television programs, Video games

Key People : Clara Lim Nee Ling (Chairman & CEO)

COMPANY PROFILE

*** Wishes ***OfTRINITY ENTERTAINMENT INC.

Looking for investment opportunities abroad!!!

Which of the countries is most attractive for foreign investment?

UNITED STATES or INDIA???

Political situation in the US market Oldest continuous democracy government in the world. US political situation very stable. Very suitable to invest in US

Subsidies given by the US Government U.S. government offer incentives to attract film production, including sales tax exemptions on hotel stays and streamlined permit procedures.

Film production tax incentives The industry offers attractive possibilities for foreign investors, both of large and small investor, and provides film production tax incentives.

(Overall Gross: US$10.927 billion)Type of market structure and in the US film industryIn the year 2013 there are 160 firms in the US film industry with total revenue of US$10.927 bil.

Over 160 firms in the industry, 7 firms holding about 84.7% of market share.

The top 3 firm hold 45.9% of the total market share.

From the above shows US film industry is oligopoly market structure.

i. Level of US unemployment - The level of unemployment rate is about 5.9%.

ii. Inflation rate in the US - The inflation rate in the US market is about 1.8%.

iii. Interest rate - Its about 0.25% from 2009 until today.

iv. US the largest Media & Entertainment (M&E) market worldwide - The U.S. M&E market represents one third of the global industry, and is the largest M&E market worldwide. - The U.S. film industry posted $10.927 billion in revenues in 2013.

v. The largest film exporting country - U.S. exports of film and entertainment media often attain shares, in international markets in excess of 90% of worldwide market.vi. Strong backup industry - This industry subsector is made up of companies that offer services that include editing; film/tape transfers; titling; closed captioning; and computer-produced graphics, animation and special effects, as well as developing and processing motion picture film.

Increasing influence of internet on social life - People of all ages now flock to social networks.

- Entertainment content providers starting to develop partnerships with the major social networking sites to offer their content online.

Language - The acceptance of English as an international language. - US film producers enjoy a domestic opportunity advantage . - English speaking market in the world are large and wealth. - demand are determined by both demographic and economic factor.

Large quantity of skilled workforce - The U.S. market has a large talent pool of writers, actors, producers, directors and technical experts. - A home to a variety of film crews, post-production firms, backdrops and infrastructure to support production. U.S.

Advances in animation and special effects equipment and software - USA is the first country to come out with 3D technology . In 2009 when the movie Avatar come out in 3D version it created box office success .

FilmDomesticForeign"The Avengers"$623.4 million$888.4 million"Ice Age: Continental Drift"$161.2 million$714 million"The Hobbit"$266.7 million$562.8 million"Madagascar 3"$216.4 million$525.7 million"The Amazing Spider-Man"$262 million$490.2 million"Men in Black 3"$179 million$445 million"Brave"$237.3 million$298.1 million"Prometheus"$126.5 million$276 million"The Lorax"$214 million$134.8 million

Advance in video equipment and storage devices - All this advances in technology will help US movie industry create movies and films with higher resolutions as well as cost reductions.

Technological breakthroughs in film production In US production houses are able to produce an episode more cost effectively through the use of advance animation and sound reproduction machines.

**United States do regulate artistic expressions in the movie industry.Has own legislations & regulations in relation to artistic expression. For example, they have The Child Protection and Obscenity Enforcement Act to regulate the sexually explicit films.

Sensitive to artistic expressions in relation to racial issues like slavery and miscegenation interpretation. The Motion Pictures Association has censorship guideline on this matter.

First Amendment in the USA which guarantees Freedom of Speech does not cover obscenity materials through films.

Government SupportDefine as One of the Important Sector for Indias Export Oriented Growth.Signed Co-operate Treat with Others Country. Dispersion of Technical Among All Partner Nations.

New Government InitiativesCreated a 15,000 sq. meters Animation Facility Tower Come Animation Houses to Create Their Bases.All TV Channels Must Ensure 10% Reservation for Local Animated Content.Provide Grants to Indian Animators for Participation in International Conference.Taking Up Training Programs Abroad.

Presence of an English-Speaking Workforce.High-Quality Software Engineers.A Large Pool of Creative Talent.Good Studios and Low Costs.Cost of Producing a Film : US$60,000 Compared to US$250,000-400.Average Monthly Salary of a Film Professional : US$600 Compared to US$1,000-US$1,200.

Animation Products for IlliteratesTelevision is a Highly Popular Medium as a Source of Information in the Indian Countryside.Combines Visual and Audio Effects and is Less Demanding of the Cognitive Skills of the User.

Great Tools for Education, Entertainment and Awareness among illiterates in India.

Two main broad categories :-Technical Skills (e.g Programming expertise, Analytical ability)Soft Skills (e.g Communication skills, Problem solving)

Trained Professionals for In-House Animation Development.

Use this Education Channel for Market Diversification and Penetration.

International Cooperation in the Animation Industry - Signing co-production treaties with other countries. - Professional organisations promote the Indian animation sector.

Employment Law - Facilitates productive individual and collective employment relationships. - Provide health care to workers.

Consumer Protection - Make sure the quality of movie and security are good.

Conclusion

Pros

Benefits from production incentives Government Sponsorship.

Stable economics - Cost control over distribution.

High opportunity for Independent films. (e.g Panaromal Activity)

Rapid Advance in Technology.

Cons

European countries implement screen quotas.

Advances appears to have an impact on health.

States often incorrectly use economic measurements.

Conclusion

Pros

Abundance of natural resources.

Well established legal system with independent judiciary.

Large and growing market.

Stable democratic environment.

Cons

Lack of Finance.

High Online Piracy.

Facing Manpower Challenges.

Low Media Penetration.

Apurv Gourav (2009)Foreign Direct Investment In India,Available at:http://www.slideshare.net/apurvgourav/foreign-direct-investment-in-india(Accessed: 5th November 2014).

Colin Brown (2012)The Benefits of Film Investing, Los Angeles, California: Slated Inc..

Hoskin C. and Mcfadyen S. (1991) 'The U.S. Competitive Advantage in the Global Television Market: Is it Sustainable in the New Broadcasting Environment?',Canadian Journal of Communication,16(2).

Indian Entertainment and Media (E&M) Industry Report (2005)The Indian Entertainment and Media Industry - Unravelling the potential, India: FCCI & Price Waterhouse Cooper.

KPMG LLP (2008)Investing in the U.S.A Guide for Foreign Companies. KPMG International[Online]. Available at:https://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Documents/Investing%20in%20the%20US%20-%20A%20Guide%20for%20Foreign%20Companies.pdf(Accessed: 5th November 2014).

Tao Hong (2013) 'India Film Industry: The Profits of Broadcast is Increased by Social Media',China Press ,24th October, p. 12.

Troy Buder (2010)How to Make it Big Investing in Independent Movies Read more: http://wallstcheatsheet.com/breaking-news/how-to-make-it-big-investing-in-independent-movies.html/#ixzz3IG5QONX6,Available at:http://wallstcheatsheet.com/breaking-news/how-to-make-it-big-investing-in-independent-movies.html/(Accessed: 2nd November 2014).References