Case Studies

Morningstar Entertainment

The Background

Morningstar Entertainment distributes retail and consumer products in the highly competitive home entertainment industry. In addition to distributing and marketing an expansive and eclectic library of titles, Morningstar Entertainment also develops unique DVD products, working with production partners and cutting-edge technology. In business since 1992, it has successfully promoted television, film, and niche market properties, and is also recognized as an important source for Canadian programming.

The company represents more than 30 producers, including the Canadian Broadcasting Corporation, BBC, Mackinac Media, Facets Multi Media, The World Poker Tour, The Players Network, FilmsWeLike, Cin Tl Action, Cit Amerique and Big Motion Pictures.

Some of the most recent DVD titles launched by Morningstar Entertainment include: Torino 2006: Canada’s Quest for Success; Prairie Giant: The Tommy Douglas Story; China Rises; The Chronicles of Narnia; The Trudeau Collection; The Newsroom Season 3.

In May 2007, Morningstar was acquired by Queen Street Entertainment Capitol Inc. (QE) a publicly traded entertainment company. Morningstar – together with Knightscove Films, QEs creative subsidiary – is now a fully integrated Canadian entertainment company.

Morningstar distributes to all mass merchant and specialty retail outlets in Canada through direct relationships and distribution.

The Challenge

After 15 years in business, Morningstar was under increasing pressure from its major distributors to integrate Electronic Data Interchange (EDI) into its computer system. The industry was putting pressure on them and a decision to comply was a natural extension of their need to grow.

During the first 15 years of its existence, Morningstar had been a ‘major/minor company’ in Toronto. That meant that while the company worked in the massive entertainment history, it competed on the fringe – as D’Jesse Larsen, Vice President Operations & Finance describes it: “We’re not a Sony or a Paramount, or a Warner Bros – what we are is a small independent releaser.”

Added Larsen, “If no-one else picked up a title, we’d release it for them – in the hopes that, eventually, it would make a profit. Often the titles would be quirky – such as ‘Canada – A People’s History’ – but they also brought success.”

In 2005, company growth led to work with larger distributors, such as Amazon, HMV, and Chapters/Indigo. And in 2006, Morningstar won a contract with Wal-Mart. These larger clients were demanding that the company transferred all information via Electronic Data Interchange (EDI). “It was part of the contract – we had no choice,” says Larsen.

EDI allows for the electronic transfer of business documents between computers. The transfer of files requires that the sender and receiver agree upon a standard document format for the document that is to be transmitted. It is a fast, inexpensive, and safe method of electronically sending purchase orders, invoices, shipping notices, receiving advices, and other business documents. Increasingly, large companies use EDI to communicate between locations, track inventory, and transmit financial information and payment in electronic form. The latter use is often called Financial EDI or Electronic Funds Transfer (EFT).

Since Larsen is responsible for all aspects of Morningstar’s Accounts Receivable/Payable, Credit, Orders and Inventory, and also assists the President, he was the one who had to find the solution – and quickly.

The contract with Wal-Mart depended on the successful integration of EDI into Morningstar’s current software system.

The Next Step

Larsen had about 12 months to implement EDI, and integrate it smoothly into the current Morningstar system.

Morningstar had two software systems: Blue Link Elite accounting, and QLogiTek. Working with QLogiTek’s software system meant they didn’t immediately need a link to the accounting system.

“We could go online and ‘fake’ EDI so to speak – but there was no link between our two systems.”

Invoices would be received through Blue Link, and then would have to be manually entered into QLogitek’s system. That had worked for a while, but then as distributors, including HMV, doubled their business with Morningstar, it became increasingly cumbersome. In addition, the extra work from the Wal-Mart contract would only add to the manual labour costs – and the time delays.

Larsen went to Blue Link with an urgent request to get the EDI implementation done – and get it done now!

The Solution

The cost of the EDI system was not the overriding factor for Larsen. For him, factors such as dealing with a local company, and having accessible customer service were more important.

When Larsen initially approached Blue Link for an accounting system it was because of certain important factors: they were a local company in Ontario; and had good customer service – “everyone I called had nothing but good things to say about them.”

When he considered dealing with other companies, Larsen says he found he was always dealing with resellers – “if there was a problem, I had to call the company – and that could be anywhere, the mid-West, India…I didn’t feel comfortable. I want to know that when I have a problem I can get in touch with someone fairly quickly.” Larsen had considered one other company, from California. But he found that although the representative was in New York and flew into Toronto every couple of weeks –”… if I had an emergency which couldn’t be fixed remotely, then I had to pay to fly the guy from California.”

So, having used Blue Link for Morningstar’s initial accounting needs – and been satisfied with the product and the customer service – Larsen decided to call Blue Link for their solution to his EDI problem.

He found that they were working with Virtual Logistics to develop an Integration Manager (IM) module. In Morningstar’s case, IM meant that information could be transferred from Blue Link into a string that Virtual Logistics could use to transfer into HMV’s, or Costco’s, accounting system.

With EDI, the company could electronically and automatically generate orders, make order modifications, generate confirmations, and produce invoices.

It took about six months for the EDI system to be implemented to where it was running properly without any major problems. Because of the need for customization, there was a lot of back and forth conversations with the integration manager.

One element that Larsen would like to have with the EDI module is reports. He would appreciate being able to get daily reports by date and order number, and then follow up manually if necessary: “What went through the system, what did we send. Everything is about reports. Just for my comfort level, I’d be really happy.”

Larsen however acknowledges that the EDI system from Blue Link can include modules for reporting, at additional cost. He decided not to order that module – but now says, “I wish I had included it.”


Overall, Larsen is happy with the Blue Link EDI.

Since the system was installed, business has more than doubled, and the EDI system is working very well. Larsen acknowledges that there were some initial small data transfer issues, “but now it works very, very smoothly. Everything goes through and its been working wonderfully.”

He adds, “One great thing about the EDI system is that it [information] goes right into their accounting system, and then 60 days later I get a cheque!”


For Morningstar, installing EDI is allowing the company to expand and deal with large distributors.

Other benefits include:

  • Greater flexibility – in working with electronic customer data, such as vendor tracking, purchases and returns, shipping, and inventory count.
  • Reduced labour costs – Morningstar has seen an immediate cost saving benefit with the reduction of manual processing.
  • Increased production and performance – as errors through manual data entry have been eliminated, information is stored electronically and can be accessed easily, and invoicing can be done 24/7. In the longer term, staff performance can be tracked and improved.
  • Morningstar can move product faster – as Larsen says, “Now, with the EDI system, we can get product to stores within 3 days. We used to get email orders (say 100 a day from HMV alone) that had to be processed manually – it could take from a week to two weeks.”
  • Electronic tracking is improving revenue – Morningstar needs to know how much it owes in royalties, which necessitates tracking sales. EDI enables the company to do this electronically.

Looking to the future, Larsen sees EDI as an expandable module, which allows the company to plan for new distributor demands, and for its own internal product management strategies.

Already, an evolving plan to minimize returns includes using the new EDI system. In order to keep product cycling in stores, distributors allow only limited space on shelves. At Morningstar, the returns process is currently a manual one – but Larsen is working with Blue Link to develop an EDI process for the returns with HMV.


The company can still keep to its original mission, created over 15 years ago, to provide ‘family friendly’ quality programming in a variety of home entertainment products, while continuing to grow its business into the larger entertainment market. Morningstar can accept most EDI transmissions from its trading partners, which allows it to work with larger distributors, and attract new customers and additional orders.

And, with the EDI system, and website direct order access, the company’s clients can easily obtain title information and conveniently order their requirements.

He emphasizes, “One thing I really do like about Blue Link is the personal relationship, so when a process happens I can call Mark, or call Mike, and can say this is what’s happening with our company right now. Blue Link can plan with us, and make plans for the future and grow with us.”