INTERNATIONAL BUSINESS IN FOCUS

FOREIGN
DIRECT
INVESTMENT
PRESENTERS:
1) CHEONG CHUN WAI
2) WONG KAH JUN
3) TOMMY YAP
4) LAI CHUNG HWA
5) CLARA LIM

A2943
A3636
A3386
A3251
A3613

COMPANY PROFILE

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)

*** Wishes ***

Of
TRINITY ENTERTAINMENT INC.
Looking
Looking for
for investment
investment opportunities
opportunities
abroad!!!
abroad!!!
Which
Which of
of the
the countries
countries is
is most
most
attractive
attractive for
for foreign
foreign investment?
investment?

UNITED
UNITED STATES
STATES
or
or
INDIA
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.

Type of market structure and

in the US film industry
In 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.
(Overall Gross: US$10.927 billion)

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

 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 .
Film

Domestic

Foreign

"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

 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 Support
1. Define as One of the Important Sector for Indias Export Oriented Growth.
2. Signed Co-operate Treat with Others Country.
3. Dispersion of Technical Among All Partner Nations.

. New Government Initiatives

1. Created a 15,000 sq. meters Animation Facility Tower Come Animation
Houses to Create Their Bases.
2. All TV Channels Must Ensure 10% Reservation for Local Animated Content.
3. Provide Grants to Indian Animators for Participation in International
Conference.
4. 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$250,000400.
Average Monthly Salary of a Film Professional : US$600 Compared
to US$1,000-US$1,200.

 Animation Products for Illiterates

1.Television is a Highly Popular Medium as a Source of Information in the
Indian Countryside.
2.Combines Visual and Audio Effects and is Less Demanding of the Cognitive
Skills of the User.

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

India.

 Two main broad categories :i.

Technical Skills (e.g Programming expertise, Analytical ability)

ii.

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

Cons

Abundance of natural
resources.
Well established legal
system with independent
judiciary.
Large and growing
market.
Stable democratic
environment.

Lack of Finance.
High Online Piracy.
Facing Manpower
Challenges.
Low Media Penetration.

References
1.

Apurv Gourav (2009) Foreign Direct Investment In India,Available at: http://www.slideshare.net/apurvgourav/foreign2. direct-investment-in-india (Accessed: 5th November 2014).
3. 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
4. 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 5. 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
6. %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
7. 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-independentmovies.html/#ixzz3IG5QONX6, Available at:http://wallstcheatsheet.com/breaking-news/how-to-make-it-big-investingin-independent-movies.html/ (Accessed: 2nd November 2014).