Archive for May, 2000

BlackStar Has It Taped

Tuesday, May 16th, 2000

If all the world’s a stage then Jeremy Glover’s latest performance in 135 countries must be worthy of a rave review or two.

Bangor-born Glover, together with two leading co-stars, has been wooing audiences across the globe with a carefully crafted Internet production called Blackstar.

In just three years it has attracted a dedicated following of small screen fans who have been able to access a world of talent at the touch of a button.

Whether your passion is for action/adventure, horror, romance or comedy – if it exists on video or DVD, then Blackstar will find it for you.

Three years ago Jeremy Glover, Darryl Collins and another friend, Tony Bowden, decided to take the plunge and go into business selling videos and DVDs over the Internet.

Back in 1997 dot coms were the Cinderella of the financial markets. Today it is a different ballgame, but Jeremy Glover is convinced Blackstar got there well ahead of the party.

“I think the recent readjustments in the market were inevitable. There were lots of over-reached, non strategic Internet-based companies flooding the market, many of whom weren’t well thought out.

“What has been happening, doesn’t worry us. We have a strong business product which we are selling into 135 countries and we are expecting further growth this year .

“Our investors are looking at an actual business plan, not a hypothetical idea.

“There are perceptions about Internet companies that are not always right – people often do not understand what goes on behind the scenes. This isn’t a make believe business – it’s a real-life solid business.” Glover said.

The company may be based in Belfast but it is an international online retailer of videos and DVDs.

Barely three years old, Blackstar is expected to float on the London Stock Exchange within the next six months and its founders are hoping the company could be valued at up to £300m.

But even Glover would admit Blackstar has ambitious targets for what is a relatively young company, even by dot com standards.

He and his friends started off packing videos from one of their houses. Today they have a network of suppliers and warehouses and have moved into upmarket and decidedly fashionable offices in the centre of Belfast.

But, according to Jeremy Glover, the principle behind the company remains the same …”When we started out there was just the three of us and a ‘girl-Friday’ called Anni. We packed our first orders off on a table-tennis table.

“In the first month we had 55 customers – 40 are still with us today.

“We try hard to ensure our customers trust us, from day one we have had secure credit card facilities in place so that people could order with confidence.”

“We are an open and friendly company, and I feel we have succeeded in promoting a friendly, helpful attitude,”

“It has always been our philosophy that people buy from people – they do not buy from computers. We passionately believe in customer care because without it you don’t have customer loyalty.

“We have customers shopping with us from every corner of the globe. We like to think we are up there with the very best online retailers in the United States, which tends to be somewhat ahead of the UK Internet scene.

“Some companies profess to have a customer care policy but when you dig down you discover they don’t really care, and the ‘have a nice day’ attitude is quite shallow.

“We are different because we do care 100% about our customers. We mean what we say, “Glover added.

He and his partners are naturally passionate about the Internet, although he came somewhat later to the medium than Collins and Bowden.

Before getting involved in Blackstar, Jeremy Glover spent 15 years in advertising, during which he was creative director of McCann Erickson in Belfast.

Northern Ireland television viewers who remember the ‘Fred there’s no bread’ ad campaign may be interested to know this was one of Mr Glover’s creations.

“My introduction to the Internet really came about when I worked for McCann Erickson during a visit to Edinburgh.

“I had called in to see my brother who was a student in the city and he happened to be on the Internet at the time. He was really clued up on it and really showed me around the net.

“It just blew my mind The Internet is so powerful; it really has and will continue to change the way we communicate with each other and the way we shop.

“Long-term the possibilities are endless.”

“The great thing about the Net is that you can really get a feel for your market from wherever you are in the world. You can get to know your customer without having to hop on a plane and send a whole team of people out to the US.

“You just have to be live in your market to understand how it operates, to experience what your customers are looking for,” he added.

Glover believes the Internet provides a more open approach to doing business.”

“You can actually go on line to see what your competitors are doing – read their job advertisements, see where they want to take their company and, of course, vice versa.

“The industry is changing rapidly so we have to stay on top of those developments.

“Tony, Darryl and myself all read a lot of books and are really tuned into customer care developments – our company has adopted a customer care approach from the bottom up,” he said.

This approach, according to Glover, is fundamental to the company.

“Blackstar could be based anywhere but the fact that it is in Belfast is great. In the cold light of day what we need to make this business a success is people – and we have great people in Belfast.

“There really are very talented people on our doorstep.

“I think people in Northern Ireland understand customer care and how to deliver it – that’s why we are becoming the call centre capital of the UK .

“There is a good attitude in Northern Ireland where people genuinely want to be able to help,” he said.

Blackstar’s whole approach to doing business does not just stop at the customer care door.

The profile of the company is very young, although this is not, Blackstar stresses a deliberate policy.

Visitors to the Blackstar office immediately notice the suit-free environment. People appear to dress for comfort rather than impact and the mood, while busy, is genuinely congenial.

Glover said: “The sort of people who apply for the jobs in Blackstar tend to be in a certain age bracket, but there is no strategy of only recruiting young people. We recruit the best person for the job.

“It may be an Internet-based company but we are also a retailer, so we need a huge range of skills – from people who understand the whole retail scene to web designers to programmers, to the people who understand the whole dynamics of the film industry.

“This is a team business. Our staff have share options – real options not a £500 bonus scheme but the opportunity to enjoy what the future may hold for Blackstar”.

BlackStar

Friday, May 12th, 2000

This time next year Jeremy Glover will be one of the richest men in Northern Ireland. By then, the internet entrepreneur and his two partners, Darryl Collins and Tony Bowden, will have floated their online video retailing company.

Taking BlackStar public will raise more than £250 million and net each of them a large fortune.

These are uncharted waters not just for BlackStar – Europe’s leading online video retailer – but for Northern Ireland business generally. Their story shows that we can produce industry-leading companies; that Northern Ireland businesses can survive and thrive in the new e-economy.

It could, however, have been very different had the trio allowed themselves to be beaten by the “negative and sceptical” attitude their plans initially received.

Jeremy explains: “In everything we have done, we’ve adopted a pretty ballsy approach. It’s been that kind of attitude that has kept us going, because there were a few times here when people didn’t believe in us, when we encountered total sceptisism. “They were asking us questions like what are you going to do if the internet collapses? Why would anyone want to be involved with three guys from Belfast?”

Jeremy, a former creative director with McCann-Erickson in Belfast and now marketing director of BlackStar, admits he found the experience very frustrating but says they never contemplated giving up. “At one point I returned from London having had two really good meetings with EMAP and the Times. They were really excited about what we were doing. “I came back really buzzing and I walked into this office in Belfast and these guys behind the desk were saying we were a load of rubbish, we were from Northern Ireland, how could we possibly take on the rest of the UK? “We had to overcome that kind of inward-looking negativity but when people did eventually get it, the support was there.”

As it turns out, the business has proved even more successful than they anticipated. Most readers probably won’t have heard of BlackStar. There are, though, people in more than 134 countries around the world who have. They are among the tens of thousands of customers who regularly buy online from the company. The reason they do, is because they can choose from more than 50,000 titles, have them delivered direct to their door and, more often than not, pay less for them than they would in the High Street.

It’s not exactly rocket science but where Jeremy and his two business partners succeeded, is seeing and acting on that opportunity quicker than anyone else. “We knew the internet was a way of making money, we just weren’t sure how,” says Jeremy. They plumped for video sales after initially toying with other ideas such as a loyalty site based on Green Shield stamps and a wedding site. “We were watching what was happening in the United States and noticed that videos weren’t being shipped outside because our PAL format differed from theirs. With books and CDs there was a standard, but with video there was zero penetration over here.” There was as Jeremy says a “window of opportunity” which they exploited very quickly. Selling videos online was also a way for all three to indulge in their passion for movies. “We knew instinctively that we were onto something, that we were ahead of the game,” says Jeremy.

BlackStar began trading in March 1998. In that first month it turned over just £2,000, packing videos from the top of a table tennis table. This year revenues will top £15 million. That is expected to quadruple next year and double the year after that. The company expects to make its first profit in 2002. It employs around a hundred people in Belfast – two-thirds at its Alfred Street HQ with the rest at a distribution warehouse on the Ravenhill Road.

Jeremy says: “We are growing, the internet is growing, and the market is growing. “Penetration in Europe for VCR households is only 70 per cent compared to 95 per cent in the States. All the indicators are that we are in a very healthy, growing market and we are riding that wave. The trick is stay ahead of the wave and not fall into the water.” Jeremy admits they got off to a headstart but that larger rivals like Amazon are beginning to catch up. But, he’s convinced BlackStar can survive and compete when the others get their act together. “We will be one of the survivors in this game,” he says bullishly.

Jeremy and his partners had planned to go to the market later this year, possibly in September, but the recent rollercoaster ride in technology stocks, especially dotcoms, has forced them to reconsider the timing. “We were looking to float at about £250 million to £300 million prior to the whole market going crazy. I would say that we still have a chance to get away with that valuation, if not in September then very early in 2001.” In the meantime work is continuing on expanding the business. Jeremy explains: “We set out a whole string of things we wanted to do this year with the money that we would raise from the flotation. It looks like we are actually going to achieve 60-70 per cent of those on a fraction of the cost.” This includes rolling the business out into Germany, Italy, France and Spain as well as acquiring several companies that will support its business in the UK. “When we go back to the investment bankers in two months time they are looking at a much stronger proposition,” says Jeremy.

When the company does float, Jeremy (38) and his partners will become multi-millionaires overnight. The £250 million to £300 million flotation price being bandied around is based on BlackStar remaining a major player in online video and DVD sales which, in two to three years time, is expected to account for 30 per cent of all such sales. Globally, the market is currently worth around £30 billion. Jeremy says: “There was a time when Darryl, Tony and I did think about that. But I can tell you we went through a reality check when the markets collapsed and our paper wealth, which was potentially £45 million, went down to £10 million. Then, you thought, oh my God I’ve lost 30 million! “I liken it to a conversation I had with a friend who was offered a significant amount of money for a pub he ran. He said ‘Jeremy, why would I do it? I am having a ball’. “It’s hard work but it’s a new industry. We are leading our field; we can rewrite some of the rules. Why would we want to walk away from that?”

It’s their passion for the business and the product they are selling that marks them out. Jeremy and his fellow directors are as determined now as they were two years ago when they took on the sceptics. Only fools would bet against them twice.

Cyber Shopper

Monday, May 8th, 2000

The on-line video and DVD retailer BLACKSTAR was recently named “Cream of the cyber crop” in a customer service survey carried out by a Californian research company. So I thought I’d better take a closer look at the services offered by the site. The latest DVDs start at around £15.99, while chart videos start at around a tenner. If you pre-order the latest release you get 20 per cent off the price and there’s a 20 per cent off special offer at the moment on a range of cult film and television titles including Star Trek, Buffy the Vampire Slayer, The Avengers and Father Ted. The video hunt service is interesting; Blackstar will try and track down any rare videotape for you at a cost of £ 16.99 per tape. Delivery is free on all items.

Mystery Shopper

Sunday, May 7th, 2000

Video and DVD retailer BlackStar consistently gets good feedback from .net readers, who rave about the extensive catalogue, free worldwide delivery and excellent, prompt service among other things. The Mystery Shopper took this as a bit of a challenge – surely there must be something to pick holes in?

Well, maybe there is, but we didn’t find it. The site is a model of easy navigation, with a straightforward search facility. All video and DVD listings include a brief synopsis and most have an illustration of the cover plus enough technical information for you to be sure you’re buying the right thing. Best of all, prices are really competitive, which, coupled with the free delivery, means you really can save money. There’s a huge list of all kinds of videos, from Absolutely Fabulous to Zulu, which are offered at significantly reduced prices. You can also save up to 20 per cent on new releases if you pre-order them prior to release. Deleted vids are listed on the site and BlackStar does its best to get them for you.

You can track your orders on-line, and if something is pre-ordered or is taking a while to track down, you get a weekly automated message updating you on the order status. Any order can be cancelled prior to shipping. Delivery is extremely prompt: pre-ordered items are shipped a day or so in advance to arrive on the day of release.

What’s OK! on the web

Friday, May 5th, 2000

www.Blackstar.co.uk

The UK’s biggest online video store seems to have thought of everything. There’s 20 per cent off selected titles, free delivery and most orders are processed within 24 hours.

The browsing facility is extremely comprehensive and there’s even a free gift-wrapping service. No wonder they were voted the most efficient UK shopping site in a recent study.

Internet Monthly Top Site Award

Monday, May 1st, 2000

BlackStar Videos

Obscure Italian art films, 50’s screwball comedies, 70’s blaxploitation and terrifying B movies are celebrated, rated and sold at BlackStar. The people behind this online shopping service clearly love their films, with a vast array of hard-to-find and out of date movies available at very reasonable prices. They don’t charge for postage, they send you free videos at Christmas and they let you know the latest deals without clogging up your email.

Movie heaven!

A Corner Shop on the Web

Monday, May 1st, 2000

When Jeremy Glover and his colleagues set about dreaming up online blockbusters, they thought Green Shield Stamps and a one-stop wedding site. Then they thought DVD.

In 1997, a little advertising agency with a large amount of cheek threw down the gauntlet before Jeremy Glover, who was then creative director in Northern Ireland for the international agency McCann-Erickson. Glover had been visiting his brother, a research scientist in Edinburgh, and on surfing the net for the first time was curious to find out which agencies had web presence.

“I searched for our company and instead found this small US agency which listed all the big agencies saying:’None of these companies have a website.’ That was smart”.

Glover left the agency the same year and stepped into internet territory himself, becoming one of the creative brains behind BlackStar (www.blackstar.co.uk), which now leads the market in online DVD and video retail. Growing from a tiny database of customers two years ago, the company is now forecasting a £20 million turnover, and its founders are looking for it to be valued at up to £300m when it floats this year.

The seeds of this online video empire were sown in an early meeting between Glover, his agency colleague Darryl Collins and their friend Tony Bowden, a theology student who had also founded one of the first web design companies in the early 1990s. The three sat down before a big whiteboard and listed as many internet ideas as they could come up with. A loyalty site based on Green Shield Stamps? A one-stop wedding shop? A site selling clerical shirts?

Glover himself had once signed up to study computer science at Brighton Polytechnic but dropped it in favour of a job in print shop. Back in Northern Ireland, he attempted to set up a private members’ club in Belfast.

“I wasn’t afraid to try things out. I learnt how to identify good partners, how to handle banks and that if you don’t have a skill in-house, you’re better off learning it yourself than calling in consultants.

“I had a plan to teach the staff to ride mopeds so that they could take clients home after a few drinks. But after I had done a considerable amount of work with architects and designers, the bank pulled out and it all collapsed”.

At 35, Glover decided the time had come to take a deeper plunge. In September 1997, he left his agency job, sold his house and racked his brains for a way to take advantage of the internet boom.

“With the Green Shield Stamps idea we would have had to create crtical mass, and we just didn’t have the budget. Video was on our list and the main reason we went for it was our passions: Darryl’s background in film, and mine as a frustrated actor in amateur dramatics.

“We were watching what was happening in the United States and noticed that videos weren’t being shipped outside because our PAL format differed from theirs. With books and CD’s there was a standard, but with video there was zero penetration over here.”

By December, the team of three had got no further than the whiteboard stage.

“If we weren’t careful, the money was going to run out. We thought, let’s just get something up there. Tony said: ‘We’re going to build a video shop in seven days’ – him being theological, it had to have a religious connotation. Unfortunately, I had kidney-stone problems, so it took nine days.”

The three wrote up reviews of their favourite films and television shows, and kicked off with 55 customers (Glover claims 45 are still regulars), packing videos from the top of a table-tennis table. The next month, they had more than 200 customers. Then a couple of business angels gave them £100,000 to employ professional designers and programmers, and things began to take off.

Glover sees his job as creative rather than technical. “Leonardo Da Vinci ran around and had lots of projects on the go, Michelangelo said he was going to paint the Sistine Chapel and picked the ceiling. To me, BlackStar is very much a Sistine Chapel. Or to take a film analogy, Robert Altman’s The Player has a long panning shot and if I was at an advertising agency I would cut between close and wide shots. Here at BlackStar, it’s like one continuous shot.”

What has he learnt about the Web in two years there? “I’ve realised the site needs to be constantly improved. While Americans have been good at using technology to personalise their websites, I think it is more important to personalise the service, that corner shop mentality.

“We have created a powerful retail experience because customers can check the actors, look at everything for £5.99, order by catalogue number. We threw it open to customers to say what they’d like to see there.

“You can strip away a lot of prejudices. In the real world, a customer would sense if the person selling the video has had a bad day. That doesn’t come across on a computer. I’ve heard it said that customers need to contact the vendor for one in every six purchases made online. That’s an opportunity to talk, but it needs to be proactive and positive.”

BlackStar raised a few hackles when it advertised Titanic in Empire magazine for just £9.99, prompting phone calls from offline retailers. Glover, who with his partners has since raised another £4m in venture capital, just shrugs.

“The reason we advertised offline was that we needed to create presence to make ourselves look big, not by taking quarter page boxes but by taking full-colour, full page adverts”.

His approach to empire building is very similar to the way he learnt to type e-mails: slowly, with one finger at a time.

“Our strategy has been about slow-build, about managing customer expectation. The good thing for us now is that the doors have closed and everyone who’s not in the club now won’t get in, because the barriers to entry are too high.

“We’re the only specialists in this space and we see ourselves as selling passion – not a product but a service.”