Glass Houses: Independent Media Manufacturers Need Camaraderie
Posted Nov 29, 2005

Independent media manufacturers unite! In an environment of intense competition, if you don't know about The American Independent Media Manufacturers Association (AIMMA), and the Colonial Purchasing Co-op, you should. While the members of these organizations are your competitors, members have found there is enough work for everyone and networking with people in the same situation as you is helpful to the overall business climate.

"At most of our meetings, we have a lawyer present to make sure we don't get into trade problems. We really help each other out. It has been wonderful," says newly elected AIMMA president Jad Porter, who is also president of DVC Dubs in Indianapolis.

The Colonial Purchasing Co-op was formed about two years ago by 13 small- to medium-sized independent replicators. Hence, the Colonial name. By joining this purchasing co-op, the companies gain greater buying power for the materials they need. The members of Colonial Purchasing are able to level the playing field with larger replicators that buy the same amount of material on their own. The co-op now has 21 members. "We've had great partnerships and successes with companies like GE Plastics and Sericol who guarantee us that we will get our supplies during the crunches and for the best price," explains Doug Franzen, president of the Co-op as well as executive vice president of Eva-Tone in Clearwater, FL.

The Co-op sends out queries to companies that sell the goods members need. Once the Co-op reviews the replies and settles on a vendor, then makes contact with that vendor and establishes credits. The purchasing goes much the same way as it does now, but member companies have to abide by the rules, for example, buying a certain quantity of product. In return, rebates typically come back to the Co-op which ultimately distributes the rebates to members based on their buying power. "This year we will be distributing more than $2 million in rebates," says Franzen.

While these associations are completely separate, membership certainly overlaps. AIMMA was founded in 1987 as the American Video Duplicators Association (AVDA) to accommodate video duplicators. The main reason it was founded was because JVC was charging royalties all across the board for the VHS logos, Porter says. Since most video shells have the logo on it, JVC was charging "some of our members as much as 12 cents a shell, while bigger theatrical replicators were paying as little as 2 cents/shell." AVDA hired lawyers, took JVC to court, and got the price standardized to 3 cents for everybody.

Three years ago, the AVDA opened their membership to replicators and mastering companies, and the organization's name was changed to AIMMA. Membership now stands at about 40. About 90 percent of the organization consists of principal company officers. While it is not required, AIMMA recommends that members be either the president or the CEO of the company they represent in the association. "We have people pounding on our doors to be members that are vendors. We don't allow vendors to be members. You have to be a manufacturer. It keeps the membership pure. That way we are all focused on the same thing," says Porter.

AIMMA is involved in best-practices issues and legal issues, and is interested in exploring new technologies, as well as providing a forum for members to learn about the latest advances in media manufacturing. And reportedly of equal interest to the association are issues which surround the manufacturing process such as packaging, postal distribution, international trade practices, and manufacturing standards.

"We have a change to our by-laws in motion right now that will require all members be licensed. I think this will be a big plus," says Porter. At the last meeting in November, an update was given on CD royalties. Royalties are usually valid for 25 years, and most have expired. There are only two left, and they are very limited. DVD royalties are currently being investigated. "We think there are about three legitimate royalty companies to pay—6C, 3C, MPEG LA, and that adds up to 11.5 cents," he says.

AIMMA meets twice a year, once in conjunction with a leading trade show and then again at an alternate geographic location. The next meeting will be held May 5-6 in Nashville. The Colonial Purchasing Co-op and AIMMA often have meetings at the same time so that they may share meeting space.