BlackStar Press

Author: tony

  • Ulster firm set to Net a million

    Three Ulster entrepreneurs are poised to take their first steps to becoming millionaires. Jeremy Glover, Darryl Collins and Tony Bowden are looking for investors to back the flotation of their Belfast-based on-line video store.

    The three men behind the dynamic young Internet retailer, BlackStar, currently the UK’s fastest growing on-line video retailer, are in talks with leading investment banks with a view to taking the company public.

    Set up just 2 years ago BlackStar now boasts over 50,000 video and DVD titles – the average high street store stocks around 2,500 – and customers in 95 countries across the globe.

    Darryl Collins, the company’s chief executive officer and one of the founding partners said a potential flotation was just one of the options being explored.

    Speaking from London today Mr.Collins said: “One of the opportunities we are looking at is taking the company public, we want to continue our expansion into Europe.”

    “We are planning for the long term but in terms of Internet timescales one year is a long way away to plan – there is no way of saying how big or how far this can go. Although it would be nice I don’t think we are going to be Internet millionaires just yet”

  • Belfast E-tailer Plans £300m Float This Year

    BLACKSTAR, the Belfast internet video retailer, plans a stock market flotation before the end of the year in a move market sources said could see it valued at more than £300m.

    One of the main shareholders in the company is Ryanair chairman David Bonderman, and it is chaired by former A&L Goodbody boss James Osborne, who is also a director of various Dublin companies.

    BlackStar is about to send out its business expansion plan to investment banks this week as part of the flotation process. The response from investment banks would give an indication of likely valuations for the Belfast company.

    It is planning to carry out the initial public offering (IPO) on the London and Nasdaq stock markets, but may also consider a listing on Dublin.

    The company sells videos and DVDs (digital video discs) and has more than 50,000 titles in stock in its Belfast facility. It models itself on the hugely successful book and CD e-tailer (electronic retailer) Amazon.com.

    BlackStar (www.blackstar.co.uk) is the market leader in the online British video sales market. Sales of videos in Britain are running at close to stg£1bn a year, with the market growing at a rate of around 10pc annually.

    It is estimated that between 30pc and 40pc of video and DVD sales will be online in the next three to four years, with BlackStar aiming to capture between stg£120m and £200m of this.

    Sales and marketing director Jeremy Glover was reluctant to reveal current sales levels at BlackStar, but did say that revenues had doubled every month for the last three months. The new year had not heralded a fall-off in sales, while the company sells in 118 countries.

    The company had been profitable up until recently, when it began to pump profits into a much expanded marketing budget.

    Last August, BlackStar received funding of $6m from Mr Bonderman’s Texas Pacific Group and UK venture capital outfit Atlas to give the two groups roughly one-third of the equity.

    Along with founders Mr Glover, Tony Bowden and Darryl and Brian Collins, the company is also part-owned by its staff, who hold 15pc of the equity.

    It has a workforce of 75 but is currently recruiting another 25 to 30 people and moving to a new 14,000 sq ft premises in Belfast’s city centre in February.

    Asked about the demise of publicly quoted firms in the North, Mr Glover said BlackStar provided a good opportunity for the North to show it was shifting from an emphasis on traditional industries to the new e-economy.

  • Virtual Empires

    It took three minutes from beginning to end. Found the web site, then the video, registered credit card and address details and pressed the “buy” button. Having traipsed fruitlessly from one Dublin retailer to the next before Christmas, in search of Un Coeur en Hiver, I’ve now tracked it down with a few clicks of my mouse.

    In doing so I have made three Belfast web entrepreneurs infinitesimally richer and, by adding to their customer database, marginally enhanced their attractiveness as a takeover proposition.

    Less than two years ago, Jeremy Glover, Tony Bowden and Darryl Collins launched the internet video store Blackstar with minimal capital. Last August, American venture capitalists undertook to invest £3.5m in the company, which now employs 75 people. Next month it moves into new 14,000 square feet Belfast premises, and later this year it plans a stock market flotation. Market analysts put its value at about £300m.

    The three founders, who previously worked in advertising and film making, have done what almost every journalist I know has spent the last year dreaming of doing. There are few things more certain to aggravate one than the knowledge that soon, all too soon, some collegues in this scurvy trade are likely to be walking around, a carefree spring in their step, as freshly minted millionaires. It is known as John Connolly Syndrome, and the only difference between the new variant and the old is that web ventures, not novels, are now the favoured route to riches.

    Thus, when two or more gather the talk turns to the virtual, to the purity of selling nothing but an idea and the promise of profits, and even to the erotic heights of the initial public offering, or IPO, the event that turns people with a convincing line of patter into dot com millionaires. Unlike Blackstar, even whoppers such as the bookseller Amazon, have yet to turn a profit. Their marketability is based almost entirely on confidence and, despite a few recent blips, confidence has seldom been higher, with the rsult that entrepreneurial Dublin media types have seldom been more agitated at the prospect of missing the gold rush.

    Having in the past invested with spectacularly mixed results – one company’s shares doubling in value in a matter of months, another suffering the ultimate ignominy of being de-listed from the Dublin stock exchange, the joke bourse of the universe – I find that the best thing to do in such circumstances is to dunk one’s head in cold water and sit in a darkened room pondering the fate of previous bubble markets, such as the Dutch tulip crash of 1634, until the fever abates.

    It never fully recedes, however, because depite recent market shudders there is the nagging knowledge that the biggest land grab the modern world has seen is taking place in the virtual domain, where the traditional rules of business do not apply.

    It’s a world in which a once small player such as Gerry McGovern can grow a small Irish company, Nua, into a top contender; it’s also one into which a media force such as The Irish Times can swagger and launch a portal site, as it did last year, only to wath it falter.

    Those of us who haven’t ever reached the starting blocks can take heart from such inversion of the traditional order. There are market niches to be filled, and even such a formidable outfit as Blackstar has room for improvement. Though not short of moody French films starring Emmanuelle Beart, it stocks nothing by the brilliant American documentary maker Ross McElwee, who made Sherman’s March and Time Indefinite. Empires have been built from less promising opportunities.

  • Cyber-buyers Find Websites Fail To Deliver

    Cyber-shoppers buying Christmas presents via the Internet could be in for a big shock at the poor standard of customer service offered by some companies, a new survey reveals today.

    Many of the big-name websites selling books, music CDs, toys, videos and fashion clothing – the Internet’s hottest products – failed a simple e-mail test which formed part of the research carried out by Eric White on behalf of Dial Internet, an Internet marketing consultancy.

    One item was ordered from each of the websites surveyed and each was sent an e-mail inquiring about their exchange and refund policies. Apart from their e-mail response, sites were awarded points for payment security, ease of use, competitive pricing, variety of products and delivery speed.

    The five websites which came out best for overall performance were eToys.co.uk, debenhams.com, blackstar.co.uk, whsmith.co.uk and yalplay.com.

    The five which came out worst were net-megastore.co.uk, tops.co.uk, virgin-mega.com, toysrus.co.uk and waterstones.co.uk.

    ‘We were surprised that Waterstone’s, a respected High Street brand, came bottom of our table,’ said Mr White today. ‘But they didn’t answer a simple query sent three times by e-mail and they delivered outside the stated delivery time.

    ‘Virgin’s site was another disappointment,’ he added. ‘Its website is totally designed for the US market and the products are sent from the States. I understand they have plans to launch a UK version but this isn’t available yet. They were slow to answer e-mail and although they delivered relatively quickly from the US in 11 days, this wouldn’t help any last-minute Christmas shoppers.’

    Four of the 20 websites surveyed failed to reply at all to an e-mail inquiry sent three times to the relevant customer service address. These were Toys R Us, Toycity.com, online music retailer CDzone (www.cdzone.co.uk) and Waterstone’s. The research also revealed some surprises about pricing.

    ‘We found a big price discrepancy between sites selling the same product,’ said Mr White. ‘We ordered John Major’s autobiography, which has a recommended price of £25. It cost £12.50 at Waterstone’s site and Bol.com’s site, £15.99 at WH Smith’s site and £20 at amazon’s site even though amazon is renowned for its discounts.’

    Traditional high-street retailers like WH Smith and Debenhams came out well in the research. ‘Debenhams has successfully translated its retail service into an online operation,’ said Mr White.

    ‘The WH Smith site is very informative and simple to use with no fancy graphics that take ages to download,’ he added.

    Mike Hawkey, marketing director of Dial Internet, said: ‘A striking feature of the survey was the revelation that companies such as Debenhams and WH Smith – both traditional retailers with huge High Street pedigrees – are giving the ‘pure’ Internet-only companies a run for their money in the e-commerce stakes.

    ‘The companies who failed a simple e-mail test really need to re-think their customer service as this will only put consumers off,’ he added. ‘As an Internet business, one of the biggest crimes is to fail to respond to a simple e-mail.’

  • Shoppers Set To Buy Gifts Online

    1999 is set to be the UK’s first real ‘cyber Christmas’.

    Santa’s sleigh will be heavily laden with seasonal gifts purchased online via home PCs, a MORI poll has found.

    There are an estimated 50,000 people in the province already connected to the internet – so thousands of pounds of Christmas business will be generated locally.

    MORI surveyed 500 Internet users across the UK on behalf of BlackStar, the UK’s biggest provider of online video and DVD products.

    According to the people surveyed, online Christmas shopping has its advantages. 20% of respondents expect to save money while 35% believe it will save time.

    Men are more likely to see the benefits of online shopping than women and are twice as likely to see potential costs savings as a benefit.

    Gone is the nightmare of the Christmas rush in shopping centres.

    Jeremy Glover, co- founder and director of Blackstar, said: ‘This doesn’t just represent a step up for Christmas cyber shopping compared to last year – it’s a gigantic leap. 1999 will truly be Britain’s first cyber Christmas.’

    Half of the survey respondents said web sites would have to offer cheaper prices than the High Street and free delivery in order to make online shopping more appealing.

    The most popular online shopping goods are CDs and books followed by cinema, theatre and concert tickets, videos, DVDs, and holidays.

  • Catch the Web and Surf Away from Shopping Agonies

    Whoever dubbed shopping ‘retail therapy’ was clearly not thinking of Christmas when they coined the phrase.

    The seasonal spending spree is probably one of the great stress creators after moving house, divorce and filling out self-assessment tax forms.

    Whereas self-indulgent, mood-placating shopping trips are all about the buyer, Christmas shopping is all about the bought for.

    It is hours spent agonising over purchasing the prefect home/personal accessory for relatives you seldom see and whose interests you know nothing about.

    You battle from store to store, confronted in each by identical glittery gift packs filled with the type of items you wouldn’t normally grant shelf space.

    Indecision gnaws away at you as you hesitate, certain that the lucky recipient will know exactly which chain store you bought it from and how much (or how little) it cost.

    There is an end, however, to this agony and it is right at your fingertips. On-line shopping is the new vogue and this year, according to Mori, more than a third of Internet users will be flexing their digits rather than their feet and doing their buying from the comfort of their own homes.

    According to the poll, commissioned by on-line video and DVD retailers Blackstar.co.uk, around three million cyber savvy consumers will spend £130 each, a third of their Christmas budget t hrough their computers.

    The benefits, apart from free parking, guaranteed good weather and an escape from battling through crowds of other weary present hunters, are savings in both time and money.

    Twenty per cent of the people questioned believed that it was cheaper to shop on-line and 35 per cent considered it was quicker.

    The favourite purchases are set to be items that can be bought without needing to be looked at for quality or fit, such as CDs, videos and books. These are followed by concert, cinema or theatre tickets, holidays and computer equipment.

    The survey also discovered that it was more likely to be Midlanders who would embrace the new technology. Twenty two per cent of them anticipate spending nearly half their festive budget over the Web, compared with 19 per cent of southerners and 12 per cent of northerners.

    Jeremy Glover of Blackstar said: ‘Santa has swapped his sleigh for a surfboard this year. 1999 will truly by Britain’s first cyber Christmas.

    ‘We are accelerating our hiring plans for customer service personnel to cope with the anticipated pre-Christmas demand.’

    Two former City dealers are hoping to catch the surf-to-shop wave by establishing a virtual high street where customers can browse in familiar stores.

    Joe Green and Darren Liebman have already attracted 16 big name retailers to set up shop in the world’s first 3D internet shopping mall.

    WH Smith, BT, C&A, Somerfield, 24-7, Interflora, Thorntons, FH Hinds Jewellers and Thomas Cook can all be found on www.theonlinehighstreet.co.uk

    The duo came up with the concept to cut down on the time consuming task of trawling though individual websites.

    As well as general goods and services, Odeon cinema tickets and financial services from Barclays Bank and Nationwide Building Society are also available through the site.

  • Forget Sherry And Mince Pies, It’s Dear Santa.com

    SANTA could end up swapping his sleigh for an e-mail address this year as 3.6 million shoppers turn to the Internet to order presents, a new survey reveals.

    Almost a third of Britain’s Internet users will be cyber-shopping this Christmas, according to the MORI survey of 500 Internet users commissioned by online video and DVD retailer, BlackStar. co. uk.

    Those planning to buy Christmas gifts online said they would spend around £130 each, representing about a third of their total Christmas shopping budget of £446. Thirty-five per cent expected to save time and 20 per cent thought they would save money by buying online.

    Men were more likely than women to see the benefits of online shopping, and were twice as likely to see potential costs savings as a benefit.

    Only five per cent said they planned to shop online to avoid crowded high streets, and just two per cent of men said they would buy lingerie online.

    The most popular items that Internet users are likely to buy online this Christmas are CDs and books (27 per cent), theatre, cinema and concert tickets (14 per cent), and flights, holidays, computer equipment, videos and DVDs (13 per cent).

    Most cyber-shopping will be done from home with only seven per cent considering using the facilities at work.

    For half of those surveyed, websites would have to offer cheaper prices than the high street, while a third wanted free delivery to make online shopping appealing.

    People said they would be encouraged to shop online if websites had fewer hidden charges, such as VAT (28 per cent), and offered assured delivery dates (26 per cent), a no-quibbles exchange policy (25 per cent) and a wider range of products than the high street (21 per cent).

    Jeremy Glover, co-founder and director of BlackStar, said: ‘This doesn’t just represent a step up for Christmas cyber-shopping compared to last year. It’s a gigantic leap. This year will truly be Britain’s first cyber-Christmas.

    ‘We are accelerating our hiring plans for customer service personnel to cope with the anticipated pre-Christmas demand, as our customers say our personalised service and free delivery make online shopping more practical for them.’

    The Internet is becoming a forum for other types of retail schemes that go beyond direct selling. The UK online bookstore, www. bol. com, has created an affiliates scheme allowing Internet users in Britain to turn their websites into virtual bookstores and earn 20 per cent of the net BOL discount price on every book sold.

    Alexander Broich, BOL’s UK managing director, said: ‘With the BOL Affiliate Programme, every owner of a website, whether it is a personal homepage or a large portal site, can make money out of selling books on their website and by building these partnerships, BOL gains new and powerful distribution channels.’

  • Still Time To Weave Your Way To The Web

    A new survey of Internet users suggests that as much as £450 million of Christmas spending this year will be online, with books and CDs proving particularly popular.

    As many as 3.6 million Internet users could spend as much as 30% of their Christmas shopping budgets on the Net.

    The MORI survey, commissioned by online video retailer Blackstar, reveals that many of those interviewed expect to save time and money by shopping online, with men more likely than women to avoid the traumas of the High Street crush.

    When this cyber Christmas materialises, it will be bad news for the traditional retailers, many of whom still offer no facilities for customers to shop from the parlour rather than the pavement.

    But it is an enormous opportunity for the entrepreneur with good products and fast feet. It is still possible to have a website up and running in a matter of days and cash in on the seasonal spend – if you have the nerve to do so.

    A visit to www.mydomainname.co.uk might enable you to find an appropriate name for your site, particularly if you do not plan to be too subtle about your market.

    Sitting on the shelf, for example, they have such gems as santaclaus.uk.net, xmas-present.co.uk and christmas.uk.net.

    If you want other, more sophisticated names they may have these as well. But if you want to check whether a specific name has already been taken, then www.internetters.co.uk offers a free search facility.

  • Stars Come Out For Online Movie Alliance

    BlackStar.co.uk, Europe’s leading online video and DVD retailer, today announced a strategic customer fulfilment alliance with BigStar Entertainment Inc (Nasdaq: BGST), which operates www.BigStar.com, the US’s leading online movie superstore.

    Under the terms of the agreement, BigStar will use BlackStar to complete orders for its customers based outside the US who require PAL format videos and DVDs. Likewise, BlackStar will refer its North American customers who require goods in the NTSC format to BigStar. Income on referred sales will be shared between the two companies.

    Darryl Collins, co-founder of BlackStar, said: “BigStar.com has the American market’s most comprehensive offering and generates higher traffic and sales per visitor than any other online movie superstore in North America. So it is the ideal partner to fulfill the requirements of our US customers. At BlackStar we are committed to providing the highest level of customer service – a passion which I know is shared by the team at BigStar.”

    David Friedensohn, CEO of BigStar Entertainment, said: “International partnerships such as this will ensure that we can fulfill the needs of all our overseas customers who visit www.BigStar.com to take advantage of our low prices and access our extensive proprietary content on the movie industry. BlackStar offers more film titles in its store than any other online retailer in Europe. Our overseas customers will now be able to purchase every video and DVD title available in the UK.”

    BlackStar recently secured second round funding of $6 million from Atlas Venture Ltd and the partners of Texas Pacific Group, including David Bonderman. The new investment will be used to fund infrastructure and marketing initiatives to propel itself onto the world e-commerce stage and prepare for future competition from established High Street and online retailers. 75 new jobs are being created over the next six months in Belfast and London.

    BigStar.com recently signed a strategic content and commerce agreement with FortuneCity.com, one of the world’s fastest growing global online community networks and the 25th largest Web property in the U.S., and a marketing alliance with America Online (NYSE: AOL), the world’s leading interactive services company.

  • Videos from cyberspace

    It is a common complaint. You go to the video store looking to rent a film for the evening, only to spend what seems like an inordinate amount of time finding something you might actually want to watch but have not seen before.

    And the situation is not much better when it comes to buying videos. Even the largest shops sell only a fraction of the 50,000-odd titles available in Britain, where the market for video and DVD is worth £1bn a year.

    Which is why three young entrepreneurs from Belfast saw an opportunity to make their contribution to the e-commerce revolution. And it seems their hunch was right, since BlackStar, the internet video sales company created by Darryl Collins, Tony Bowden and Jeremy Glover, is one of the few internet start-ups to be making any money.

    Set up in an office above a builder’s yard just 18 months ago, it has just secured a second round of funding. It has raised $6m (£3.8m) from Atlas Venture, a specialist in financing technology firms, and from investors in Texas Pacific Group, the firm that has recently been involved in deals with Punch Taverns and Ducati motorcycles. And this will be used to fund infrastructure and marketing initiatives aimed at helping prepare the fledgling company for competition.

    Such is the rate of progress that the latest financiers, who are building on the investments made by local business angels when the company was started at the end of 1997, could be seeing a quick return on their money. BlackStar, which is chaired by James Osborne, the prominent Irish entrepreneur who oversaw last year’s flotation of Ryanair, is looking to go public in the next 18 months, via either the London Stock Exchange or New York’s Nasdaq exchange.

    Much impressed by the example of Amazon.com, which revolutionised the book trade before moving into selling other products online, BlackStar’s three founders say they have got to this position through an absolute dedication to customer service.

    Mr Collins, an award-winning film maker who came up with the idea of BlackStar with Mr Bowden, a video fanatic, says that from the start they have asked people what they liked about the service and what they felt could be improved. “We’ve had constant nudges towards what has turned out to be obvious.”

    As an example, he cites how one early customer suggested that the company publish films’ catalogue numbers on its website at www.blackstar.co.uk. That way, said the customer, dedicated fans like himself could tell at a glance whether the film would be of interest. BlackStar made the change within half an hour, says Mr Collins, pointing out that many larger companies might have asked consultants to look at the issue first and so wasted valuable time.

    This reputation for paying a lot more than lip service to customer service has won the company customers all over the world. It has, for example, built up such a strong relationship with a customer in Turkey that he recently visited Belfast specifically to see the people he had been dealing with electronically.

    “We took him out to lunch and he’s an even better customer now,” says Mr Collins. A German fan, who was one of the company’s first customers, regularly sends chocolates.

    BlackStar, which is planning to have 75 employees – still at the original office – by end of the year, is living proof of how the internet can change the economics of business. If a little-known start-up based in a part of the world hardly associated with high technology can promise to supply customers in 95 countries with videos from a list of 50,000 within days, just about anything is possible.

    But, although it is the web that has given them their opportunity, the company’s founders are not blind to its limitations.

    First, for all their nods to Amazon.com, they insist that their business model is much more in line with a conventional retailer than the mail-order operations that most e-commerce ventures adopt. The price the customer sees quoted is what they pay and there are no hidden costs. Moreover, delivery, which is promised within 48 hours in the UK, is free and the process is tracked until the package reaches the customer.

    Second, BlackStar realised from the start that brand building has to be done using conventional media in the “real” rather than virtual world.

    It is this confident approach, the company believes, that has attracted investors, and will help it reap even greater rewards.