Innovation: Working the American way...

Derek Forbes, president of Vista Entertainment Solutions (USA).

Derek Forbes - president of Vista Entertainment Solutions (USA) - believes Kiwi companies have to "Americanise" their businesses in order to compete in a local market saturated with brands.

The Vista Group currently has a portfolio of six businesses that provide software solutions to the global film industry.

Los Angeles seems like a natural fit for a company working in the film sector - when did Vista first enter the US market?

I moved here in late 2009 to set up the US office, but prior to that we had been working here through a reseller since 2002. In some countries we've gone into, working through re-sellers has been an effective strategy, but here we weren't really getting the results. The US was a big black hole in our market share worldwide, we had virtually nothing and so we made the decision to open a direct office on the ground.

What was it about the US market that made it difficult to gain any traction without that direct presence?

Trying to do business here without having a direct presence was never going to work - that's something we can see now. Because the US is such a large, self-sustaining economy with such a great technology sector, it has companies which do everything within its own borders and most American business people are not familiar with doing business with people outside of the country.

It was also quite different when we were starting in terms of our reputation in the market - we were not very well known. People who did know us generally knew us as a foreign company and our biggest competitors were using that against us. They knew we were quite big in other countries and our software was better, so they were doing whatever they could to keep us at bay.

Getting in to the US market can't be like anywhere else - what was the approach Vista took?

We took a pretty conservative approach to our expansion into the US which is a fairly New Zealand sort of mindset. We didn't want to spend too much money just in case it didn't work out!

We started with three people, bringing in a guy from the company that was reselling for us already; we seconded someone from New Zealand and they joined me to set up the office.

We had a handful of customers here so keeping those guys happy and making sure they had the support they needed was the first priority, so we could turn them into vocal supporters of the product and help us establish a platform to build from. After that it was a matter of me flying all over the country, knocking on doors trying to build up our profile.

Five years into the US experiment, how is Vista now placed in the market?

We've grown quite significantly and have gone from having three in the office to now having 50. Our market share in the US is sitting at about 37 per cent of US theatres with 20 or more screens, which is our traditional market. We're also generally now considered to be the leader in our market and having that reputation means that it's not the equivalent of cold-calling potential customers - they generally know about us and our presence here, and it gives them confidence in dealing with us.

How does Vista approach innovation and what processes are in place to ensure Vista remains at the cutting edge of industry development?

For us when we talk about innovation, what we're thinking about are greenfield ventures. It's about thinking where the industry is going next and what we can do to add value to it. We do consider ourselves to be innovators; we pride ourselves on being a company that doesn't just react. Our product team is based in Auckland, which is headed by our CEO Murray Holdway. That team is very well connected into the industry through our customers and they are dreaming up what's going to help move the cinema industry forward. Coming to the US certainly added some new perspective and thinking on what we could do.

We typically aim to do one major release each year and a series of minor releases every month or so. The major release tends to be where we're aiming our more significant innovation - the more visible and high profile changes - major new features or products.

Part of staying ahead is a conference we host in New Zealand very two years for our customers and we get people coming to that from all over the world. That is where we typically showcase all of our innovation from the past couple of years and get some direct input and feedback from our customers.

Has using customer input as part of the innovation process led to the development of any new products or technologies?

We received a lot of feedback from some smaller players who weren't particularly happy with the offerings at that end of the market. We had Vista which was really good for medium to large cinema chains and had a really good reputation - but it was expensive and overkill from what was required. Some of those who could afford it did install Vista, but they found it rather cumbersome and overwhelming in terms of all the stuff it could do - a lot of which really wasn't necessary for what were smaller and simpler operations. After struggling to gain much of a foothold in that end of the market, we made the decision to develop a solution for independent cinemas.

Our solution had to take out the heavy IT infrastructure requirements that came with Vista - so we built a cloud-based version of the software, which required a sizeable investment of money and resources. This was at a time when people weren't quite sure how cloud technology would play out, so it was a bit of a gamble.

With such a significant portion of the market now secured globally, could we see Vista look to implement their technologies and experience in other sectors?

A couple of years ago we went through some quite long range strategic planning. We had come to the conclusion that one day we were going to branch out and would we take our point of sale technology sideways to other markets like restaurants or stadiums - and that was the natural thought. But in the end we realised that we had such a great position within this industry - these relationships, our reputation and these connection points to other things in the industry that we were much better placed to expand vertically - moving up the supply chain and leverage what we already had.

Movio is one early example of this. They're one of our companies within the group and they do marketing campaigns for movie theatres, with one of those being a membership loyalty programme which makes use of the data collected to more effectively target and market to customers. They were a start-up we invested in with the aim of using our worldwide presence to very quickly take them to our customer base.