Asian Video Dealers: Real-Life Drama Unfolds
Wang An’s video store on the outskirts of Chinatown does brisk business after 6 each evening. Asian immigrants on their way home from work slap down $3 for the latest episodes of Chinese soap operas--Oriental equivalents of “Dallas” and “Dynasty"--televised only days before in the Far East.
But An said the busy scene is deceiving, that he is losing $1,000 a month and is considering closing the shop that he bought a year ago from a man who also could not make a go of it.
“I kept fooling myself that things would get better,” An said through a translator. “But now I’ve decided it’s hopeless.”
Dubbed into five languages and sold under such colorful titles as “The Legend of the Book and the Sword,” Chinese dramas are an elixir for new immigrants desperate for images from their native lands.
In nearly every Chinese, Vietnamese and Cambodian home--from the welfare household to the very wealthy--videocassette players play a prominent part in everyday life. Husbands and wives have been known to spend entire vacations catching up on the soaps, buying the 40 episodes that make up a complete series and spending 12 to 15 hours a day in front of the tube.
But despite the demand, Asian video dealers say that more than half of their shops never make it. Like An, they point to the distributor of the dramas--Hong Kong TV Video Program Inc.--as the culprit. The San Francisco-based company has an exclusive arrangement with a Hong Kong television network to market all of its soap operas. The network, HK-TVB International, is the largest Chinese soap opera producer in the world.
The San Francisco distributor packages the classier popular dramas such, as “The Crisis of Shanghai,” along with dozens of lowly ones, such as “Beastly Beings,” that never move off the shelves.
The dealers call these tapes “dogs” but are obligated by contract to rent them at steep prices from the Hong Kong TV Video. The dealers are never allowed to buy the tapes outright. The tapes, even if they stay on the shelves, must remain part of the inventory throughout the contract.
“This is a dog. . . . This is no good. . . . And this will never sell,” said An, removing 65 cassettes from a fresh shipment. After paying $1,600 in cash for the shipment, he estimated that 40% of the videos are worthless.
“He (Hong Kong TV Video) is the only one in the U.S.A., so he dictates all the terms. If we want the good tapes, we have to take the bad ones too. The bad ones are breaking us. But there is nowhere else to go.”
Last month, more than three dozen dealers from throughout California met in Monterey Park and formed an association--the Asian-American Video Dealers--in hopes of forcing Hong Kong TV Video to change some of its practices. Their complaints have caught the attention of state Sen. Joseph B. Montoya (D-Whittier), who chairs the Pacific Rim and Business and Professions committees. Montoya has assigned staff members to investigate the matter.
“The problems that we’re hearing, including strong-arm tactics by the distributor, appear real and serious,” said David Pacheco, senior consultant to the Pacific Rim Committee, who attended the video association meeting. “If there’s some restraint of trade, we’re going to have to come up with some standards and legislation to remedy it.”
Stephen Kow, vice president of Hong Kong TV Video, acknowledged his company’s position as the biggest distributor of Chinese dramas in the United States. He confirmed that dealers are not allowed to pick and choose among titles. This is done, he said, to ensure a balanced inventory. Chinese grandmothers might want something other than the Kung Fu movies popular with most others, he said.
Kow said many Asian video dealers are struggling because of widespread bootlegging and a saturation of the marketplace. And he denied that the company operates as a monopoly, arguing that two other U.S. companies distribute soap operas made by smaller production companies in the Far East. He estimated that these distributors control 35% of the Asian video market in this country--a percentage that the dealers challenge as too high.
“No one is forcing the dealers to do business with us. This is an open country. If you don’t like your Ford agency, change it to GM. If you don’t like GM, change it to Chrysler,” Kow said.
“If I’m a Mercedes-Benz and people want my product, that’s my good fortune and hard work. I can’t be penalized for that.”
At the center of the dispute is Allen Co, a Monterey Park real estate broker who in 1982 opened the first video store specializing in Chinese dramas in Los Angeles. Last year, Co, 34, said he was forced to close his stores in Chinatown and Monterey Park after filing a federal lawsuit against Hong Kong TV Video alleging violations of antitrust laws.
Inventory Worth $900,000
His two stores had more than 20,000 soap operas worth $900,000. He said the decision to shut his doors came after the distributor presented him with a new contract requiring him to rent 200 episodes a year on top of the 700 episodes he was already renting.
Co said he could not justify the extra episodes because the quality of programs had diminished over the years. But in rejecting the additional cassettes, Co was left without a contract. He could not rent out from his old inventory because he owned none of the soap operas. They had all been rented from Hong Kong TV Video.
“That’s the biggest difference between Chinese and American videos,” said Co, who estimates his business losses at about $1 million. “We never own the product. Our inventories are basically worthless.”
Co, who founded the Asian-American Video Dealers Assn., is negotiating with Hong Kong TV Video to settle the case out of court. He said his attorney has told him that litigating an antitrust lawsuit could take years and cost several hundred thousand dollars.
“I have mixed emotions. You must understand that the dealers are new immigrants who are trying to make a life for themselves,” said Co, who emigrated from Vietnam in 1976. “They don’t understand intricate contracts with lots of covenants. I brought this suit on behalf of them, too.”
More Than 50 Stores
Over the last six years, more than 50 video stores featuring Asian soap operas and Asian feature-length films have opened in Chinatown and the west San Gabriel Valley, the dealers estimated. In Monterey Park alone, where 51% of the city’s 61,000 residents are Asian, 12 Asian video stores have opened since 1983. Dealers said the turnover rate is close to 50%.
The dealers said that those who have survived for more than a year have done so because the video operation is piggybacked onto something more lucrative. Wang An has a beauty shop and beauty supply house in front of his video shop. Others are video stores/bookstores; video stores/magazine stands, video stores/one-hour photo shops.
At Tan Van Video and Gift Shop on Sunset Avenue between Chinatown and Dodger Stadium, Steven Nguyen has tried to keep his video operation afloat by selling ceramic gifts and clocks. Last week, he took down an entire shelf of Chinese soap operas and replaced them with American titles such as “Rambo: First Blood,” “The Killing Fields,” and “The Breakfast Club.”
“Most of the Chinese action dramas like the ‘Samurai Sword’ are desirable, but the love stories don’t do so well,” he said.
Other dealers complain that the number of episodes they must purchase from Hong Kong TV Video has jumped from 500 hours a few years ago to more than 1,000 hours today. The increased commitment means that few resources are left over to rent tapes from some of the distributor’s fledgling competitors. The fees that the dealers pay to Hong Kong TV Video range from $25,000 to $75,000. "(Most of the increased hours) are junk,” said Wang An. “I have just received six tapes of ‘Endless Nights, Episode 2.’ But what am I going to do with them? The first episode is still stuck on my shelves. . . . Not one person has rented them.”
At J & M Chevalier Inc., a small Alhambra firm that distributes Chinese films and soap operas, officials said they are unable to compete with Hong Kong TV Video even though many of its soap operas are considered inferior.