Rus News Journal

I like to begin something essentially for myself new

Conceiving this or that business, the founder of the network largest in Russia videoprokatov Video boom Michael Zalishchansky proceeds first of all from this, it is how much interesting to it to be engaged in this business, and already then - from perspectivity and possible profitableness of the project. And if business for any reasons does not go, it is necessary not to reanimate it, and to start the following. And it is desirable from area essentially new to.

we trade in air
the FIRM SECRET: Why you constantly throws in absolutely different spheres? Scientific activity, the edition of man`s magazine, videoprokaty in Australia... Speak, you even ostrich`s feathers were in time potorgovat. All is not got on something?
MICHAEL ZALISHCHANSKY: Why it is not got on? Very much the other way - all I biznesy are quite successful. And scientific activity too: I am the author of 12 scientific works, and also I have two copyright certificates. As to the Australian business I when has decided to return to Russia, have simply left two video hire to the partner - has sold to it the share. And about ostrich`s feathers are any paper hoax. I really had an idea to sell ostrich`s feathers to theatres. I know that demand for this production is, and now it is satisfied basically with foreigners. So why to theatres not to buy the same production from the Russian companies?

Council of Federation: And why the idea has not found applications?
MZ: And I have changed the mind. Has decided to be engaged in the business connected with video hire.

Council of Federation: Judging by that Video boom for today is the network largest in Russia videoprokatov, you have not lost. And as all would turn back with ostrich`s feathers, still it is not known...
MZ: Well, probably. But not all so raduzhno. Now video rolling business gradually goes on recession. We for the present have not counted up our turns for last year, but I am assured that they will be more low, than similar indicators for 2001 - j. If in a year before last the turn of one hire in a month averaged 150 thousand roubles, last year - where - that 130 - 140 thousand roubles.

Council of Federation: Perhaps, it is connected with problems in a company business management?
MZ: It is connected with the objective reasons. People began to work more, they still have not enough time for leisure, but has appeared more money. And two - three hours per day which are spent for rest, the majority prefers to spend those at cinemas, cafe, restaurants. Besides, many now began to look films on DVD - disks, and to compete to the markets on which piracy DVD are on sale for 100 - 150 roubles, it is simply impossible. Some videoprokaty in Moscow have in the assortment DVD, but such it is a little: what sense to the person to take in hire a disk for 100 roubles when for the same money he can be bought in the market.

In general the market of video hire not so such sweet . Rent rates and cost of rolling cartridges which for three years has increased with 150 to 300 roubles grow. As a result, if earlier opening of one point managed in $20 - 25 thousand and hire paid off approximately for half a year now initial investments make already about $40 thousand, and times of recovery of outlay - two - three years. Meanwhile it is impossible to raise service cost - more than 40 roubles the consumer both earlier, and now to pay for videocassette hire not begins. So prospects of video rolling business not so good. It is visible on market capacity decrease. Some continue to estimate it approximately in $40 million a year, but I think that now speech already goes no more than about $10 million And networks - Video boom and our two basic competitors, the Moscow video rolling networks Avalon and videolend - occupy a far not overwhelming share of the market. The most part belongs separate small prokatam.

Council of Federation: They are more mobile, than the large companies?
MZ: Networks are less competitive today, than private hire which has no big incomes, but also expenses at it are insignificant. And the network incurs very big costs on management and as a result becomes slower, than private hire. Understand, video hire is such business, which like very simple. That here especial - rented a premise, has put cartridges, the cash register... It would seem, more it is necessary nothing. However in rolling business there are very many any nuances which demand constant control. For example, very sharply there is a larceny problem. Well, here we take retail business. There always it is known, how many it has been delivered, say, kefir, milk, bread and at what price it should be on sale. Always it is possible to find out, whether there is a shortage and if is, why. We as a matter of fact trade in air. There are cartridges which surrender in hire. And if your personnel spends half of cartridges by the computer, you about it in any way do not learn. Certainly, it is possible to catch the person for a hand but how to watch it constantly?

In - the second, there are many nuances connected with support of cassette fund which in each hire consists on the average of 2 thousand names. However, some of the very first ours prokatov have fund in 5 - 6 thousand cartridges. And so, cartridges wear out, break, prokaty them return, and we should withdraw them from a turn. Besides, clients after all sometimes simply do not return the cartridge, that is steal. So it is necessary to be engaged periodically in restoration of cassette fund, and these are additional expenses. By the way, in the western countries video rolling networks incur smaller costs on purchase of cartridges as receive essential discounts at distributors - for example, in the USA to 40 %. We irrespective of order volume all the same receive no more than 10 % of a discount.

There is one more problem. Under the general mark Video boom different firms work. As a matter of fact practically each hire is a separate legal person that allows us to work on the simplified system of the taxation. Such system facilitates accounts department conducting, however complicates financial control over each concrete enterprise. Private prokaty too have all these problems, but it is simple in smaller scale. Therefore they are more competitive.

It is impossible to copy completely their standards
Council of Federation: Probably, there is any ideal scheme of management of video rolling business? Perhaps, it makes sense to add to the arsenal the western analogues?
MZ: I, unfortunately, do not have information on how the largest video rolling network in world Blockbuster copes, but, maybe, this experience and is not necessary. As far as I know, at them too problems - last year this network has shown for the first time losses. By the way, at them efficiency of business decreases too for the objective reasons, truth a bit different. The matter is that now in the western countries the increasing distribution receives a digital cable television. In the USA, for example, already it is a lot of people to it it was connected. The person receives the catalogue and can order a film, and also day and time when he wants it to see. To watch a film thus on cable TV there are $2 - 3, and the rolling price of the cartridge - $4. Clearly, what variant is more favourable. All it in the West puts now big enough pressure upon the rolling industry.

Council of Federation: But all - taki you used the technologies applied in the western video rolling networks when opened the first prokaty?
MZ: Used, certainly. In Australia I during some time worked in one network prokatov, where has peeped technologies also has partially applied them in Russia. For example, I the first have entered bezzalogovuju system of delivery of cartridges into hire. But we cannot copy the western standards completely. For them basically work big prokaty, the area of 200 sq. m and above. To our market such huge prokaty are not necessary, yes we and cannot occupy the similar areas - rent rates are too high. Here at us now the areas prokatov not only do not grow, but even are reduced. Earlier on the average one point settled down on 65 sq. m, now - where - that on 48 sq. m.

Council of Federation: How your business at this conjuncture will survive?
MZ: I consider, as to Russia, and in the West the market sooner or later will come to system family prokatov. Ideal management in the given segment of business - family hire when directly owner is every day in the point, supervises all processes, knows the clients, remembers, who that loves. Clients, in turn, know the owner, get used to it, to cosy atmosphere in hire and in due course get the big degree of loyalty to this point.

Council of Federation: So with your network will be further?
MZ: We have decided that we will close unprofitable points and to leave only what bring a net profit not less than 30 thousand roubles a month. Thus, a network Video boom which consists today from 70 prokatov, will be reduced.

Council of Federation: Probably, it makes sense to leave in regions?
MZ: At us is a little prokatov in other cities, but further to develop in this direction we do not gather. For that simple reason that a situation in regions absolutely another - there is on sale many piracy cartridges. For 40 - 50 roubles it is possible to buy in the market the cartridge without a cover where two films, and high quality are written down. Well who there will go to hire? In regions at me slightly other interests. Now we consider possibility of registration of cinemas in different cities in long-term rent. It is business close to us. Now we study the market, we learn, whether remained still where - nibud neutral cinemas, in their rent, reconstruction how many will manage and etc. There are investors, the interested this business and ready to put up in it money. A time of recovery of outlay of a modern cinema, of course, not such small - years five. But it is stable business - people always went to the cinema and will go. As they say, from all arts for us to the major is cinema.

Besides, I have decided that have already ripened for new business. Now here I consider variants of opening of a coffee house. I will be engaged Besides, in emigratory consultation. As the person, five years lived in Australia, I can do it.

Council of Federation: That is you consider, what when business ceases to satisfy the owner, the most optimum way - to be reorientated?
MZ: in general, yes. It is possible to go, of course, to adjacent business, but I like to begin something essentially for myself new more.

Once a week I in any of points work behind a counter
Council of Federation: When you think of the new project as solve in what exactly will be engaged?
MZ: that is interesting to me. Certainly, I count prospects and the future profitableness of the project, but first of all it should me be interesting.

Council of Federation: That is business of coffee houses is interesting to you?
MZ: Yes because I always liked to work in the spheres connected with service of people. I and my partners in business, probably, have a talent for creation of the special atmosphere, all that involves clients but that it is difficult to calculate a rational way. As to a coffee house it, it is possible to tell, my dream: I since student`s times wanted to have the cafe. Now, probably, this dream will be carried out. It will be not obligatory it is a coffee house. Perhaps, I will open a bistro. Precisely has not solved while.

Council of Federation: you plan to build a network?
MZ: At first we will open one point, we will look at results of its work and we will understand, whether has sense to create a network.

Council of Federation: New business is always new specificity, weight of nuances about which you yet have no representation. How will begin?
MZ: I will solve all questions by means of qualified personnel attraction. Now in this business already there were many professionals who is better me know that it is necessary to do. And I will be engaged in an operational administration, financial control.

Council of Federation: That is you are ready to entrust hired managers conducting the new business? But how, without being the expert in the field, you can estimate efficiency of their work?
MZ: For this purpose there are financial indicators of object. On them it will be possible to understand, all is true is organised or something needs to be changed. Eventually, and now my functions as owner and the head of a network Video boom are reduced basically to control. I, for example, am once a week obligatory in any of points of half-day personally I work behind a counter. And differently it is possible to lose understanding of processes which occur in this business.

Council of Federation: If new business goes successfully, whether you are ready to sell in this case Video boom ?
MZ: Yes, it is unequivocal - sooner or later we will make it. But we will be on sale, most likely, with a condition of preservation of our management. If, of course, as buyers competitors who have experience in the given sphere and the control system do not act.

in due time in a proper place
absolutely different things get To sphere of interests of Michael Zalishchansky. Having finished chemical faculty of the Moscow State University, he any time pursued science. Then published man`s magazine Andrey But from - for disagreements with editor-in-chief Alexey Vejtslerom it was necessary to leave magazine. Then the mister Zalishchansky has decided to go for a year to Australia to learn English and to find work on a speciality - and as a result has lived there five years. At once to be arranged on a profile it was not possible, therefore Zalishchansky about one year was the taxi driver. Then it nevertheless has been accepted in the company at Academy of Sciences of Australia, engaged in ceramic elements. Has worked there two years then together with the Russian partner has opened video hire with domestic films - specially for emigrants from Russia. Later businessmen have organised one more hire. In 1997 Zalishchansky has sold the share in the Australian business to the partner and has returned home. The same year, having sold for $8 thousand car bought in Australia, has opened the first video hire in Moscow. In total in this project it has been enclosed $20 thousand (Missing means were given by the acquaintance Zalishchansky, too become interested in new business, but subsequently stepped out).

Now in a network Video boom nearby 70 videoprokatov (from them 16 work on a franchise), basically in Moscow. The company turn in 2001, including sales volumes videoprokatov - franchajzi, has made about $4 million