Archive for May, 2001

Movie Star With Flourishing Fan Club

Monday, May 21st, 2001

Blackstar.co.uk is a Belfast-based, online-only retailer of videos and DVDS. It celebrates its third birthday this month, confident that profits are just around the corner – which means by the end of this year.

Still in private hands, Blackstar competes against the likes of Amazon, DVD Street, BOL.com and the online operations of WH Smith and HMV.

When Blackstar launched in 1998, there were no Internet retailers dealing specifically in the home movie market, so the company was quickly able to fill a substantial gap. Those Internet retailers who did sell videos and DVDs were mostly US-based and so didn’t account for the incompatibility between US and UK video formats.

Blackstar found its niche, creating what it likens to a UK-based club for people who are passionate about film. In fact, it has also shifted a small but growing number of DVD-based games and a surprising amount of “classic” and “cult” TV material, such as the Dr Who series, Monty Python and Star Trek, to non-UK fans who are unable to source the products closer to home.

This means that although most of Blackstar’s 300,000 registered users are in the UK, it has still managed to notch up sales in a staggering 163 countries.

The term “registered users” should usually be taken with a pinch of salt, but Blackstar would appear to have the magic touch when converting them into paying customers. Of that 300,000, some 250,000 have made purchases. And Christmas 2000 saw a 250 per cent sales increase over Christmas 1999, with more than 2 million unique visitors.

“We believe our fulfilment and customer care is unmatched,” says managing director Ian Loughran, “but we are constantly looking to improve it.”

Blackstar claims to ship 95 per cent of all UK deliveries within 24 hours by first class Royal Mail. Customers receive handwritten notes with their orders, which they’ve been able to track online, from picking to packing and dispatch.

“You must always deliver what you’ve promised to deliver, and never take your eye off this side of the business,” says Loughran, “no matter how many financing issues are distracting you.”

As well as claiming a product range ten times larger than the average high street video retailers, Blackstar offers a “video hunt” service that has proved highly popular. Over 50,000 customers have used it to buy rare and deleted titles.

Blackstar has used a mix of traditional and new media to build its brand. Offline, it has focused on entertainment and style magazines, as well as posters, although it has avoided TV. Online, it’s a big fan of affiliate marketing, building strong links with what Loughran calls “passion pockets” around the Web – such as independently run fan sites.

In all, Blackstar has links to 2,500 sites, including high-profile names likes MSN, AOL, LineOne, Shopsmart, BT and BBC. Loughran believes part of the reason for Blackstar’s high conversion rate is that “people know about us before they arrive on the site.”

The company shuns outside agencies wherever possible, preferring to develop its knowledge in-house. Thus, its affiliate marketing, e-mail marketing, website design and stock system are all handled by Blackstar’s 100 employees.

“We have an excellent team of people here, I don’t think there are many people with more knowledge than ourselves,” Loughran declares.

Coiniciding with its third anniversary is what could be a significant shift in sales from video to DVD. While the former have traditionally constituted most of Blackstar’s sales, the balance was evenly split in April and May. Since storing and sending DVDs is easier and cheaper than videos, this should be another boost for Blackstar.

Loughran is now looking further afield – both geographically and in terms of new technology channels – although he’s not impressed with interactive TV so far. “It still has some way to go and needs common standards to be widely accepted.”

Likewise, downloading films directly from the website “won’t be practical until all the bandwidth problems have been ironed out.”

He hints at new products but then becomes tight-lipped. If you suggest that Blackstar might do an Amazon and boldly go into completely unrelated product areas, he implies this would be too drastic. “We will never go down the Amazon route of gardening tools for example. We won’t just ship anything that goes in a box.”