Tom Lee Music Company Profile
One of Hong Kong’s pioneering audio companies, Tom Lee has successfully married different aspects of pro audio and MI business to build a powerful and pioneering brand that has extended its reach overseas
‘I really enjoy challenging myself,’ confesses Tom Lee Music heir and chief executive, John Lee, when talking about his love for riding motorbikes. His travels have taken him through the Australian Outback, the foothills of the Himalayas, the remote plains of Mongolia and on a trek to Shanghai from Hong Kong that demanded his full attention. This and his other pastimes – which include underwater photography and windsurfing – have placed him in good stead as a businessman, and he readily admits that such high-octane pastimes help him relax such that, on his return to the Tom Lee empire, he is totally focused on his work. For a man who recently became a father to twins (Justin and Jody) and celebrated his 60th birthday, he shows no signs of slowing down. In his presence, it is difficult not to be affected by his energy, enthusiasm and thirst for further technological knowledge – as the 1,500 personnel around him are all well aware.
John Lee’s father, Tom, opened a small shop in WanChai selling musical instruments in 1953 and, although Hong Kong was relatively poor and sparsely populated place at that time, the fledgling business survived the hardships of its early years. Today, Tom Lee Music is an empire, and as the eldest of three sons, John has taken the company to new heights as a result of his hard work and vision. Music oozes through his veins and, like the roads he has ridden, his journeys that veer away from the Tom Lee Music portfolio always seem to come full circle.
‘I like working in pro audio, because it’s a solutions-based industry, whereas MI is more lifestyle orientated,’ he explains. This isn’t to say he dislikes working in MI, however, as this side of the industry has allowed Tom Lee Music to establish more than 50 retail outlets that spilled over the Hong Kong border into Mainland China some years ago. And it was John, then 18 years old, who took the bold step of establishing the brand in Vancouver, Canada. He relocated to North America for 12 years, during the instability in Asia caused by the neighbouring Vietnamese conflict and the Counter Revolution in China. ‘The business in Canada was intended as a safety net in case the business in Hong Kong suffered,’ he says. Luckily it didn’t, and as further testimony to his business acumen, the Canadian business remains today.
On the return to his homeland in 1980, he relocated to Shanghai and it wasn’t long before he made his presence felt. ‘I met some very interesting people, such as Dave Martin and Tony Andrews, who both had products that you couldn’t get in Hong Kong at the time,’ he recalls. ‘JBL and Altec Lansing were the main brands of loudspeaker then, but I was looking for products that were new and would fill a niche rather than be seen as mainstream. Back then, all the venues held less than 1,000 people and the concert set-ups were simple, with a few par cans and a couple of column speakers. In fact, the musical instruments were more important than the PA systems in the mid 1980s. It was only when the Japanese operators such as Soundcraft started to bring productions here, with their own Hibino speaker cabinets, that the level of expectation started to rise. These sound systems were amazing at the time – it was like listening to a big hi-fi system.’
It certainly inspired the young entrepreneur to move into pro audio, and he agreed distribution terms with Turbosound. Soon after, AKG approached him and Alesis followed. ‘Alesis was one of the first manufacturers to come out with a digital product in the Adat, and with it we could penetrate the broadcasting market.’ Despite the fact that the new distribution division was stigmatised as a piano company selling audio toys, it made its mark with Hong Kong’s consultants. ‘The brand is most important and must not be damaged,’ he says. ‘We promote the brand through the products we sell. This doesn’t necessarily mean selling to make money all the time. Sometimes, we have supplied equipment to high-profile events and lost money, but when you succeed at these with your reputation at stake, you win in the end. This is why we were handed the job to supply the Vietnamese National Stadium in Hanoi for the Southeast Asian Games as the Chinese construction company contracted for this, had heard of Tom Lee Music and recommended us to the government. We haven’t bought that recommendation – rather we have earned it.’ The largest events Tom Lee Music has catered for to date are the official ceremonies for the Hong Kong and Macau handovers.
Mr Lee established the service department, which currently numbers around 200 technicians, and also gained ISO 9001 certification for the company.
Critics may regard Tom Lee Music as box shifters, but John Lee rightly points to every single brand in the pro audio portfolio explaining why each of them was brought in to fill a long-term niche in the market rather than to fulfil quarterly projections for thirsty shareholders – which the company doesn’t have. ‘The philosophy here is different. We’re not a company selling hardware backed up with service as may be perceived – we are really selling solutions. We try to offer the best and most current solution that is currently on the market to our clients, who may not even be aware of their own problems. My perspective is different from others; I’m looking at this from the end-user’s point-of-view rather than a technical one. The best business is repeat business and referrals – customers come to you.’
In 1977, John’s father set up the non-profit Tom Lee Music Foundation to organise music courses and sponsor music activities, which today supports some 10,000 students through courses developed in conjunction with musical instrument makers. There is also a rental division offering sound and lighting products and services. On one hand, the company has large marketing, retailing and distribution overheads to cover, but on the other it has its own premises, service department and retail outlets that incur relatively low costs. ‘It’s a specialised business to the point where it’s not just having a product and selling it – it’s a combination of everything, and you need partners and suppliers to think the same way. I’ve taught some manufacturers what they should charge for export, signed the agreement and become their distributor, and I’ll stay their distributor until they tell me I’m not, as I fully believe in them when I sign the contract. We took on Apogee Sound 20 years ago and still distribute for them. During one year, all the Yamaha distributors met in Hong Kong and we used an Apogee system. They were greatly impressed with this PA system and most of them became Apogee distributors on the back of that.’
Having established Tom Lee Engineering as a systems integrator within the group around eight years ago, a further ambition was fulfilled. Mr Lee feels that the inception of this division was more appropriate than the birth of the pro audio distribution wing, as it clearly caters for different customers and is more focused in its ways of doing business. ‘Our relationships with our customers are very strong as they all generally love music – it’s a common denominator. Under the British, music wasn’t an important part of the educational curriculum. The Council for Performing Arts catered for the upper classes rather than the masses. If you were drama or music educated, you appreciated the arts, but otherwise you didn’t. Therefore, we decided to start from the classroom in order to stimulate musical appreciation, enjoyment and creativity. Music has to come from the heart and it cannot be forced, but it can be assisted with help from teachers, parents and from the students themselves. If you give them the opportunity to enjoy and appreciate music, however, it snowballs through the generations. Children today seem to prefer computers, downloading and video games, but they still enjoy music.’ Traditionally a Canto-pop culture, Hong Kong’s musical tastes have broadened in the last few decades, due to the combined efforts of the government and the private sector. ‘Music also plays an important role in enhancing personal development of both children and adults.’
Mr Lee is a perfectionist and feels that if a job is worth doing, it’s worth doing well: ‘We never sub-contract – it’s important not to take on too many jobs. If we can deliver – OK. If we cannot, we won’t take it on. We need to correctly market our products, our company credibility and in-house expertise as we use the products every day and know their benefits in addition to their weaknesses better than anyone else.’ If nothing else, his willingness to shop around for innovative products has placed the company in a very good light. Aviom, Duran Audio and Technomad being good examples – brands that are highly valued in niche markets, but are hardly in the same league as Yamaha in terms of sales potential. ‘It’s vital to appreciate what products are complimentary, and which have some direction for the future in order to sustain long-term business. Sometimes, you can be too ahead of the game and sometimes you can be perceived to be following others.’ With Mr Lee, it’s safe to assume, that the latter has never been the case.
Hindsight has taught John Lee that the best way to set up a new division is to offer it a new identity: ‘Having been perceived as an MI company selling audio products by many overseas companies, it was vital that we gave the new division a completely separate identity,’ he reveals. Mr Lee and his wife of seven years, Eve Lam, have been looking closely at new IT products that will take A/V conferencing and communications to a new level. His youthful enthusiasm blended with his experience of more than 40 years will see the business reach new levels. The new distribution wing has taken on Veos Pro, V2 Communications and Coneq, all of which are unique up-and-coming brands that need a distinct identity outside the Tom Lee Music umbrella.
‘The technologies we’re now promoting for the A/V market are destructive and these will see many switcher and control manufacturers going out of business. Unfortunately, it’s evolution. When I saw the Coneq graph demonstrated to me, it was like a doctor’s chart analysing poor health, only this was of an audio system to someone who didn’t realise he was sick. The international marketing manager, Alex Schlosser, travelled from Germany and demonstrated it to me here in Hong Kong and I was completely won over. Any end-user can use this software and benefit from it – its appeal is totally universal. It is software-based and all you need is a reference microphone, as you set it up and put the data on, and A-B the original sound against the new sound. Once you’ve performed this test, you don’t need to re-calibrate it unless you change the speaker set-up. It will make good engineers even better.’
It would appear that Mr Lee’s years in Canada have also served him well: ‘I learnt what a dealer does and when I became a distributor, I acted like a manufacturer. As a distributor, I recognised the importance in building a brand.’ Timing is – of course – vital. ‘CY Communications will make a huge impact as it offers the right products at the right time and has the right approach in offering end-users and partners the opportunities to make a difference. Other products may come along and fit within this new division, but I am not actively looking for more lines. I am a believer in fate, and with the brands we have acquired, this equates to fate.’ This would be true with his wife Eva who has Hong Kong parents but retains Canadian citizenship. As a news and TV spokeswoman, she has honed her presenting skills on the video presentations that promote the CY Communications product portfolio. Once again education is the key, and the videos are extremely powerful promotional tools. Ease of set-up and use, affordability and portability are not only are promoted, they’re calmly demonstrated.
With the birth of CY Communications, Mr Lee is looking to expansion and therefore seeks new partners in Mainland China and further afield to assist him. ‘The video conferencing market is huge and it’s growing. Not only is it becoming more affordable, but it offers great cost savings such as
venue hire, flights and hotel costs and it’s green. With V2, it’s easy to install and easy to use without any costly hardware. This isn’t Skype – this is the real deal. I took on Tandberg years ago and it was a great brand, but it’s now a sunset industry as the hardware is expensive and limited in its application. Software solutions are the future.’
The husband-and-wife team is also the real deal, and with these brands they will undoubtedly unlock more doors than those knocked down by Tom Lee Music and its distribution and engineering divisions. ‘I used to play golf, but if I was stressed out with work I would play a bad round and this would add to my stress.’ Perhaps, with the emergence of CY Communications, it would be a good time after all to shake the dust down the golf bag and improve the handicap. Should that not stir his passion, the road to Shanghai has improved and Justin for one would enjoy the experience charting the road ahead.
Tom Lee, Hong Kong: +85 2 2530 0488
Published in PAA January-February 2010