BlackStar

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.

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