Taking Stock Of Stocks

Vividthree riding Train to content production

In this series, The Sunday Times and the Singapore Exchange (SGX) research team interview company bosses to help investors get a better look at a firm's operations, one that goes beyond the financials. Vividthree Productions founder and managing director Charles Yeo discusses its operations and upcoming projects.

Vividthree Productions, set up in 2006, is an immersive digital content production company specialising in virtual reality, visual effects and computer-generated imagery.

It listed on SGX's Catalist board last month. The firm has grown to become one of the leading content production houses here, developing or acquiring digital intellectual property assets, like Train To Busan, to create virtual reality products such as thematic tour shows.

In 2015, Vividthree was acquired by mm2 Asia, a Singapore-based SGX mainboard-listed producer of films, TV and online content.

Q What is the story behind Vividthree and how did it start operations?

A Vividthree first began as a partnership between two friends and me after our national service. Initially, we dabbled in simple graphic design work like banners, before moving into visual effects, 3D animation and computer-generated imagery (CGI). Our previous projects included providing visual effects for Jack Neo's Ah Boys To Men movie and its sequels, as well as producing the projection video that was screened at the Home Team Show and Festival last year.

Q How has Vividthree evolved since?

A We now have two main business segments - post-production and content production. Post-production is our bread-and-butter business, where we specialise in services such as editing, CGI and visual effects used in movies, TV programmes, as well as advertisements. You can see some of our work in hit movies such as Ah Boys To Men and Long Long Time Ago.

Recently, we made a conscious and strategic decision to move towards content production, where we create and/or acquire content and intellectual property (IP) to license and/or sell. Our vision is to become Asia's best immersive digital content producer, creating immersive and interactive experiences for consumers.

With the increasing popularity of social media like Facebook and Instagram - which are designed to focus more on what people are doing instead of what they are wearing - there is now a change in consumer spending from "stuff" to "experiences". We want to be a part of the process of generating experiences.

Q Why focus on content production?

A Our parent mm2 Asia's motto is "Content is King". As Vividthree matures in terms of technical capabilities, our next growth stage would be in the content production business.

We are developing digital content in the form of thematic tour shows with the use of virtual reality (VR) and/or augmented reality (AR) technologies, and distributing it through a network of local promoters across various cities. This significantly increases our revenue and profit potential on a per-project basis due to the scalability of the business, and helps diversify our income streams from post-production.

Our latest project is the Train To Busan VR thematic tour, which we expect to launch later in the year. Content production to create immersive experiences for consumers - that holds enormous potential. According to Goldman Sachs, the AR/VR industry is estimated to surge to US$107 billion (S$148 billion) in 2025 from US$8 billion last year.

Q Can you tell us more about the Train To Busan VR project?

A We got to know Content Panda - the IP rights owner of the South Korean zombie hit movie Train To Busan - through mm2's cinema network, which offers strategic access to global film studios. Through this collaboration, Vividthree will have the rights to develop, market and sell the Train To Busan VR thematic tour worldwide, apart from South Korea.

This immersive VR tour set is a 25-to 30-minute integrated thematic experience that transports the audience into scenes of the film, ranging from the outbreak, to the station and on the train. With the help of VR technology, consumers are given a simulative and immersive experience.

This film was one of South Korea's biggest box-office earners in 2016, attracting over 11 million moviegoers. Globally, it was distributed in 160 countries and collected US$140 million in ticket sales.

Q What advantages do you have over other content creation companies?

A Our advantage comes in the form of mm2. We can leverage our parent company's established network, not only in the industry here, but worldwide as well. This opens the door to many opportunities for future collaborations.

In addition, most content production houses do not have their own multimedia team. We are unique because we can be both a content creator and a multimedia provider. It is easier for us to sell our story to investors, reduce production costs and eliminate unnecessary logistical issues.

Q Why invest in Vividthree?

A Our transformation from a traditional post-production company into a digital content producer will be the key growth driver.

Our traditional post-production business will continue to provide the base profit for the group. As for our content production business, our first VR thematic tour Train To Busan will play an important role. This business model is asset-light and highly scalable, as we partner local promoters to ride on the huge success of the movie franchise and the increasing demand for immersive experiences.

We will also benefit from mm2's established regional network along the way, in terms of the search for local promoters, sponsorships or more content IPs. Our aim is to grow profit contribution from content production to 90 per cent over the next two years.

Q Looking ahead, what can we expect from Vividthree?

A We are always looking out for potential opportunities and partnerships, especially in the areas of content creation and production, which are potentially limitless.

We believe gaming companies and theme parks may be natural extended target markets for Vividthree. In particular, we are exploring the digital gaming market, and are in the process of securing some fantastic IPs to create immersive experiences for our consumers.