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Just after
11.45pm on Aug. 8, the Sony DADC warehouse in Enfield went up in flames,
following an alleged arson attack by a small group of teenagers. The ensuing
conflagration destroyed the 24,000 square metre distribution centre and
consumed the entire inventory of packaged media held at the site, including
PlayStation games and limited edition archive material on vinyl and CD. It also
deprived more than 300 people of their jobs.
Sony’s
response has been prompt and efficient. The company’s replication plants in
Southwater in the UK and Salzburg in Austria have ramped up disc production of
all formats to satisfy the immediate commitment to keep product on the shelves.
Sony will remanufacture some 1.5 million discs over the next few days to ensure
that top-selling titles will continue to reach the shelves. The wrecked
facility was able to ship more than 10 million units a month and it will be a
long time, if ever, before the company can replace all the stock that it once
contained.
In nearby
Waltham Abbey an unwanted side effect of the blaze came from the “thermal
decomposition” of the plastics used in packaged media. The polycarbonate used
to make CDs and DVD is a remarkably stable plastic. Above 380°C, however, it
produces fumes that may be injurious to health. A supplier’s data sheet warns,
“Smouldering and incomplete combustion may produce carbon monoxide and
potentially dangerous hydrocarbons.”
The
polystyrene used to make CD cases is more dangerous when incinerated in large
quantities, releasing large quantities of black smoke and carbon monoxide,
along with traces of other additives used for colouring and visual effect. In
the limited numbers found in the average home, these plastics are extremely
safe and pose little significant danger in a house fire.
At the
DADC warehouse, the abundant cardboard packaging aided the initial spread of
the fire and once the discs and cases started to burn there was little that the
London Fire Brigade could do but dampen down the periphery. Eleven fire engines
and more than 50 fire crew attended the blaze at its peak.
“Because
of the nature of the collapse of the building there are deep seated pockets of
fire remaining,” said a spokesman for the London Fire Brigade, “We are likely
to be at the scene for some time to come. Our advice to residents in Waltham
Abbey who are affected by the smoke is to stay inside and keep all doors and
windows shut.”
For the
local people who staffed the facility, the lingering smell of burning plastic
will be a reminder of what has been lost for weeks to come.
In the
industry, the hardest hit will be the specialist video publishers and music
labels. Sony DADC at Enfield held almost the entire stock of CD, DVD and
Blu-ray discs for many smaller companies, including Artificial Eye and the BFI,
and some independents have little more than the promotional copies in their
office. Others hold stock in other countries, which may find its way back to
the UK in time. Replenishing the long tail of catalogue titles presents a
greater challenge than finding somewhere to secure the fulfilment of new
release orders and the situation will remain unchanged for some time to come.
The
independent services company Play It Again Sam (PIAS) Entertainment Group
distributes product for 208 indie labels in the UK, according to its recently
updated website. Although some product remains elsewhere in the supply chain,
the bulk of the company’s replicated stock sat on the shelves in Enfield, with
Beggars Group alone losing 750,000 CDs in the fire.
Announcing
a fund to support the most badly affected labels until remanufactured stock
becomes available, PIAS Co-founder and CEO Kenny Gates said that the response
so far demonstrates the strength and solidarity of the independent music
community. “PIAS will carry on engaging, helping and supporting its labels and
artists in every way possible. I am very confident that our combined efforts
will result in the smallest interruption to our collective business. Again the
compassion of our recording artists, our labels and the industry wide support
is amazing.”
For the
moment, the Cinram distribution centre 45 miles away in mid-Buckinghamshire
provides temporary accommodation and ensures business continuity for the Sony
DADC operation, another example of the way the industry has rallied round with
condolences and offers of help.
“The
images from the Enfield distribution centre have shocked us all, and our
thoughts are with staff at Sony DADC as well as the labels affected by the
fire,” said arvato Managing Director Supply Chain Solutions Markus Schmücker in
a statement, “I'm confident the industry will pull together to limit the impact
of the fire as we build towards Q4. Indeed, we have already offered our support
to help get the supply chains back up and running.”
EDC Sales
& Marketing Director Europe Paul Murphy said that practical support is
available from all sides of the industry. “After our initial shock at the
event, the only questions we need to ask are ‘How can we help, what do you want
and when do you need it?’ We can work out the details later, the most important
thing for the industry is keeping the shelves filled with product,” he said.
The
impending prosecution of three teenagers may reveal exactly how the arsonists
evaded the tight FACT-approved security at the Sony DADC site but, with
hindsight, it may be time to reassess the wisdom of keeping so many eggs in one
basket.
Disaster
recovery (DR) and Business Continuity Planning (BCP) is never an exact science.
At the time of the “Millennium bug” scare in 1999, the management team at a
London authoring house had its initial DR plan rejected by their American
bosses because it was “too cautious”. The board accepted the revised proposal,
which predicted, “Riots in central London following a total power outage caused
by multiple computer failures”. It was an idea that seemed so improbable that
it was submitted more in jest than in the belief it could happen.
Sony has
had more than its fair share of disruption so far this year. After surviving
the onslaughts of earthquake, tsunami, hacking and riot, the company is in a
better position than most to consider the improbable and unlikely threats to
business continuity. As the investigators sift through the rubble of the
Enfield facility, the company should consider the case for rehousing low-volume
and back catalogue away from the main warehouse.
Planning
for disaster is counterintuitive for many companies, not because of a belief
that it may never happen but because management thinks only of the “known
unknowns”. The degree of resilience required to ensure minimal interruption to
a normal business can be disproportionately expensive, so executives focus on
supply chain diversity, offsite data backup and continuity of essential
operations. The threat of an almost total loss of stock in trade and access to
premises is rarely on the agenda.
There has
been a groundswell of public support for the affected labels too. Perversely,
the destruction of a large part of the independent catalogue has led to an
increased awareness of what might be lost if physical media were to disappear.
PIAS and its labels have received offers of financial help from the some of the
largest names in the business and from individuals wishing to support the
“continued vibrancy and creativity associated with independent music”.
In a joint
statement with the Association of Independent Music, PIAS said, “Labels and
artists affected by the destruction of the Sony DADC warehouse are faced with
incredible pressures on their businesses… Whilst it is expected that insurance
will cover the lost stock, the reality for many labels is that they will not be
compensated or insured for an interruption of trade or the additional capital
to reproduce the stock that they have lost and the promotion in which they have
invested.”
As the
smoke and flames die down, the packaged media has an opportunity to reassess
the security of the supply chain and the way in which physical media is stored
and distributed. The value of a single disc is inconsequential; the cost of
replacing an entire archive may be too much to pay.
If that
proves to be the case, the entertainment industry will have lost a significant
part of its heritage in the Enfield fire.
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