Should Rattling Stick set up business operations in Asia? Three experts advise

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Johnnie Frankel, president of Rattling Stick, asks three business experts for advice setting up business operations in Asia

Rattling Stick – the British production company behind the title sequences for Casino Royale, Skyfall and now Spectre – is a £16.5m turnover business with a growing global reputation. But should the firm take the leap and set up business operations in Asia? Its president Johnnie Frankel asks our experienced panel of IoD members…

It’s an important day at Rattling Stick, the company which has produced those slinky, sexy title sequences of James Bond blockbusters including Casino Royale and Skyfall. Sequence director Daniel Kleinman is putting the finishing post-production touches to titles for the latest film – Spectre.

The £16.5m-turnover company with 21 staff has come a long way since film directors Kleinman and Ringan Ledwidge joined producer Johnnie Frankel to set up Rattling Stick in 2006. All three had been ploughing their own furrows in the film and television industry for years, but thought they’d make an unbeatable team.

They were right: from day one, the phones started ringing with commissions – mostly to make TV and cinema commercials, the company’s core business.

Unlike many start-ups which struggle to find resources and funding, Rattling Stick had a painless birth. Kleinman and Frankel had been running their own two-man production business successfully for 18 months. When Ledwidge came on board it was just a matter of changing the name and shifting over a healthy bank balance from the previous operation to fund the new firm.

The unusual name is a reference to George Orwell’s derogatory take on the industry: “Advertising is the rattling of a stick inside a swill-bucket.” But company president Frankel believes it adds a self-deprecating touch to the outfit. “We take our business and work seriously but we come at work with a wry smile,” he says.

The company has grown in parallel with the explosion in new media; the biggest challenge the business has had to face, says Frankel. Initially, it established a subsidiary called Rattling Stuff to manage new media business. “Now we’ve decided that’s not the smartest way to do it because it dilutes our brand,” he says. “We’re in the process of merging Rattling Stuff into the main company so it will be one powerful brand that handles any content.

“But we want to remain a boutique production company and not become a giant.” That means being selective about recruiting staff. “It’s not about being arrogant, more about maintaining quality,” says Frankel.

The contract to produce the Bond title sequences demonstrates the effectiveness of the boutique approach. The company won the business on the back of Kleinman’s track record as a director of Bond music videos. The title sequences of Bond films have developed an iconic status ever since Maurice Binder set the style with the first film in the series, Dr No, in 1962.

Developing the sequences is a job which takes around nine months of the year. In January or February Kleinman receives the script and music track, still at demo stage. He starts to work out a title sequence using storyboards that include traditional tropes like naked dancing women and weapons, like guns and knives.

Then he shows the storyboards to the film’s producers and director. With the concept approved, Kleinman finalises the creatives while Frankel works out a budget. There’s usually a little to-ing and fro-ing over budgets with Eon Productions, which owns the Bond film franchise, and then shooting takes place over the summer followed by post-production in the autumn.

“Danny tries to put a narrative into the title sequence,” says Frankel. “If you watch the titles of Spectre closely, you will see subtle reference points to elements of the film plot hidden in the titles.”

Eon Productions is a dream client, says Frankel. “They’re incredibly hands-off from a creative perspective. They’re happy to leave Danny to cut loose his own creative genius. And, financially, they’re very straightforward. They tell us what budget they’ve got and I make that budget fit the creative work.”

He has no doubt that the Bond business has given Rattling Stick a worldwide profile: “Our association with it polishes our own global image,” he says. Yet despite the kind of profile that other production companies can only dream of – with overseas sales hitting £7.3m in 2014 and a string of industry awards – Rattling Stick finds that selling outside Britain is still tough.

“The biggest challenge was trying to transpose our brand in the American market,” explains Frankel. The problem was that potential clients tended to equate size with quality. They thought that a company with only four US employees couldn’t have much to offer.

But Frankel is convinced that Rattling Stick is now making firm progress on the other side of the pond. A key move has been a partnership with US production company Traktor. “It’s encouraged potential clients to take us seriously,” says Frankel.

He wants Rattling Stick to win more business overseas – including the US, Europe and Asia. But Asia, in particular, will be a tough market to crack. “It’s a minefield of complicated navigation. There aren’t many UK production companies which have successfully negotiated the Asian market and come out of it with a lot of business.”

So what’s the best approach? Over to you, panel…

What could breaking into Asia do for Rattling Stick and how could the company go about cracking the tricky market? Three business leaders offer Johnnie Frankel advice on how to set up business operations in Asia

Nick Giles offers business advice for setting up business operations in AsiaNick Giles
Co-founder of campaigns firm Seven Hills and StartmeupHK ambassador for Invest Hong Kong

Asia is clearly a huge opportunity for your business. China and Japan are respectively the world’s second- and third-largest film markets, with the former expected to surpass North America by 2020.

As a 21-person firm, this is a challenge that has to be tackled in stages. Before you can take on the whole market, the business needs to establish a beachhead; for a British company, the natural entry point is Hong Kong. There you are ideally situated for the entire Asian market, and indeed beyond, with half of the world’s population within a five-hour flight.

As well as a business-friendly tax system, there are numerous factors – from language to the legal system – which make Hong Kong well suited for UK entrepreneurs. If the Chinese market is your ultimate aim, then Hong Kong is the ideal gateway. As a first step, speak to the team at Invest Hong Kong, which is there to support entrepreneurs looking to relocate to the territory. Visit the area to get a feel for it: you’ll find a thriving expat community of British entrepreneurs, and a soft landing for your business into Asia, which is rich in opportunity but can be fraught with difficulty.

investhk.gov.hk

wearesevenhills.com

Nick Giles is a member of IoD London

Pam Wilde SSP advises Provenance founder Jessi BakerPam Wilde
Global marketing director, SSP

Diversifying in terms of winning new types of customers and entering new regions is sensible to reduce risk and support expansion plans, but Rattling Stick should undertake a comprehensive review and assess their strengths against success criteria to help them decide which is the best expansion option. They could find they expend a lot of energy and lose focus on their core operations trying to enter a new market without a fully defined plan.

They also need to decide the best entry options. Partnering or sponsoring can be a more successful entry model in Asia. From experience I know it takes a long time to build the required relationships to secure those elusive first deals so patience is required. In Asia you need people in situ, so Rattling Stick must work out how to resource this with an existing slim team.

It may also be useful to talk to trade bodies and overseas production companies to see the challenges they envisage or faced in entering Asia. Asian countries like events and conferences, so attending or participating in some of those cost effectively could prove valuable. As a new, unknown quantity, testimonials and references are key. They also need to be clear which market segment they are targeting and build credibility and awareness of their capabilities.

ssp-worldwide.com

@SSP_Worldwide

Pam Wilde is a fellow of IoD West Midlands

Derek Barker offers business advice for setting up business operations in AsiaDerek Barker
Managing director, Haskoll

A wider portfolio of work will enhance Rattling Stick’s image and make it a more interesting company to work with back in the UK. But the added kudos of being ‘international’ won’t automatically bring more value. It will be more complicated and take up time from key team members. How to do it is the key question – a local office or the suitcase technique? In Europe, the latter works well but in Asia you will need expertise on the ground as well as a local partner to get enough traction.

A major challenge in Asia is earning enough fees. Locals will compare their normal rates and it’s inevitable that Rattling Stick will come with a premium cost and overheads, such as travel and UK-based staff who are more expensive. A realistic plan is required early on with all your UK local costs added to it. It’s best to decide if the plan is to work with western businesses that operate in the region, or local firms. The former will be easier to target and they will understand your cost base better. Either way, local advice or a partner is essential as it’s difficult to manage a boutique company from a distance. Then there are local partners’ expectations of rewards so be ready for equity requests.

haskoll.co.uk

@haskollUK

@Derekbarker1

Frankel’s response to the experts’ advice on how to set up business operations in Asia

November-2015-Virtual-Board-Interview-Johnny-FrancoNick’s point about Hong Kong and the fact that it is geographically only five hours’ flight from half the world’s population really resonates. And Pam’s suggestion about partnering or sponsoring locally makes sense. It feels like trying to break into Asia without this approach is a daunting task. However, as Derek points out, being ready for equity requests is also an important factor to consider. The first thing we need to decide is whether we want to work with western businesses operating in the region (probably) or local firms (eventually). Then we can think about who we partner with, and on what terms. The big question is knowing whether, being a premium company, we will be able to bill enough fees to make the venture worth our while.

What advice would you give Johnnie Frankel? Email us

To join our virtual board or to seek its advice, email our reader panel

Johnnie Frankel CV

Age: 51

Education: City of London School. “I wasn’t a huge success!”

Career: Tennis coach, film projectionist, sound mixer assistant editor and many other film and TV industry roles

Hobbies: Music, from classical to house; pop art; Chelsea FC

Watch the title sequences to Casino Royale and Skyfall at rattlingstuff.com

rattlingstick.com

@RattlingStick

 

About author

Peter Bartram

Peter Bartram

Peter Bartram is probably the longest serving contributor to Director, having first written for the magazine in 1977. He is a prolific freelance journalist with more than 4,000 feature articles published in dozens of newspapers and magazines. He has written 21 books, including biography, current affairs and how-to titles, and has recently launched a crime mystery website.

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