In the audio/video entertainment industry, sex and violence have proved to be the surest path to sales success.
Knowing that, it takes courage and no small conviction for an audio/video duplication company to trod the high road of G-rated family entertainment and self-improvement tapes and CDs.But that's what the Salt Lake-based media replication firm Cassette Productions has done - and turned a profit to boot.
From its launch as a start-up venture in 1981, Cassette Productions expects to log $20 million in sales this year on duplication of video tapes (including G-rated movies), music and instructional audio tapes and computer floppy diskettes. Its newest venture, manufacturing and mass replication of compact discs of all types, has quickly boosted the bottom line.
"Our goal is not just to satisfy our customers but to delight them," said Mark D. Hanks, president.
Cassette Productions operates out of three buildings totaling 100,000 square feet at the Salt Lake International Center where some CP employees work in three shifts around the clock every day except Sunday.
The company was founded 13 years ago in a small Bountiful warehouse by Hanks and two partners. The initial business consisted of duplicating audio cassette tapes for companies creating products for members of the LDS Church.
From that base, the CP founders developed a clientele of young artists and small companies poised for growth. As the clients grew and prospered, so did Cassette Productions. Growth was always funded out of profits, stressed Hanks, never on credit.
In 1988, one of Cassette Productions' major customers took on some new business that would strain CP's duplication abilities. Could they handle the increased business? As it stood then, they decided they could not.
Thus, in 1989, the founders realized that they would either need to go into debt to raise fresh capital or accept a buyout offer, which included employment agreements for themselves, from businessmen Stewart Grow and Richard Keysor. They opted for the latter.
Under the new ownership, the company was recapitalized and reorganized into what Gregory B. Anderson, director of marketing, described as an efficient management structure that helped CP make the transition from an entreprenurial company to a mature business with proper controls and supports.
The restructuring also included expansion of the video division into high speed laser duplication equipment. Later, the audio duplication department was upgraded and the move to new facilities at the International Center was made.
Last March, Cassette Productions made another leap forward in technology with the installation of $2 million in CD premastering and replication equipment. Already the largest videotape duplicator in the state, Cassette Productions now operates the first CD replication machine in the Mountain West.
During the past nine years, said Anderson, the company has logged an average growth in sales revenue of 20 percent annually and has been profitable every year.
Today, Cassette Productions is privately owned by Hanks, Grow, Keysor, Robert Keysor (Stewart's brother) and Stan Ricks. Except for Hanks, the original founding partners have all left the company.
Operational on April 1, the CD replication facility already accounts for 30 percent of Cassette Productions' revenues. Starting with bags full of polycarbonate pellets, blank 43/8-inch CDs are produced that are then coated with an aluminum alloy.
They are then stamped - much like the old 331/3 rpm vinyl records they have all but replaced - by a master that contains the digitalized music or computer information.
The disc is then coated with plastic to protect the underlying data, which is pressed into the disc in a spiral pattern nearly three miles long that moves from the outside of the disc to the inner label.
The data is read by a laser off the aluminum film. A receiver or light receptor notes where light is strongly reflected (blank areas called "lands") and where the light is diffused or absent (called "pits").
Microprocessors then translate the varying light patterns into sound for music CDs or data for computer ROM discs - the process for both is identical.
It is also, says Hanks, where home entertainment and computer information services is headed.
The future of such technology, he says, will be a single machine that will run all of the various CD formats, including CD audio, CD-ROM, CD interactive and CD video. But what about video and audio tape? "No tape," says Hanks. The future, he assures, belongs to the compact disc, not magnetic tape.
But that doesn't mean video and audio tapes will become obsolete tomorrow, he concedes. With 450 million VCRs in American homes and some equally huge numbers of audio cassette decks in homes and cars, the commitment to tape is too large to disappear overnight. The phaseout will take well into the next century.
What about pay-per-view? One scenario in the brave new world of the information superhighway would eliminate all tangible products, such as video tapes, CDs, video games and computer software, in favor of an on-line service that would supply those products, for a fee, through telephone lines, cable television or satellite receivers.
But Hanks is not worried about those services putting him out of business. Yes, pay-per-view is already here and will continue to grow, but he believes consumers also will continue to buy "the real thing" - music, movies, computer programs and games that can be put on the shelf.
"People want to be able to touch and feel, to read the package," he said. "They want to control what their children see and the easiest way to do that is to buy a product at a store."
Time will tell which way it all shakes out, but Hanks is determined to keep Cassette Productions on the cutting edge of technology, such as the recent move into CD manufacturing.
"Technology changes quickly and we are committed to being a pioneer in those changes in the Intermountain Area," he said.
Cassette Productions' customers include Lexicon, a company that creates tapes to teach English to Spanish speakers; Bridgestone Group, a company that produces film videos that are in the public domain; Deseret Book Co., Iomega, Access Software, Covey Leadership Center and Franklin Quest.