OPINION: THE ROLE OF DISTRIBUTION
Distribution is not a dirty word
Koch MD Craig McNicol explains why video game distributors are not all about delivering boxes into shops anymore
SAY THE WORD distribution in the games industry and what comes to mind? A warehouse, an articulated lorry, at most perhaps a telesales team. Say the same word in the film business and the monoliths of Warner and 20th Century Fox turn their heads because they would describe themselves as exactly that. Even in music, the major industry players would describe themselves as distributors. So why has our industry terminology not mirrored these fellow entertainment categories? Here at Koch we have developed our offering though all these industries and we believe we understand best the extensive re- business modelling that needs to be adapted to over the coming years. We see vertical integration just as important as cross industry exploitation in order to give continuing value to partners.
THE DOCTOR IS IN Vertical integration is no better illustrated by our recent BBC tie-up. The full service distribution role that we perform for developer-cum- publisher Asylum on the Doctor Whogames sounds conventional, but our motivation did not end there. The deal was deepened by our desire to link the game distribution with our accessory division, resulting in the Sonic Screwdriver Wii Remote. This was not some finished product to put in our warehouse but required the full research, design and tooling that goes with creating such a device. Doesn’t sound like the normal occupation of a distributor does it? And yet the synergy is obvious, it only needs a partner to look deeply enough at the wider opportunities. Of course the desire to earn monies from a physical (non-digital) product was a motivation here. The much vaunted downloading of games is a matter which any company with investment in physical assets to sell
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to retailers has to be mindful of. We believe in the continuing role of the High Street, and we want to perform relevant services to it for years to come. This is one of the main reasons why we had to cross industries into film.
Cross industry exploitation is of deep interest, why wouldn’t it be if it mainly consisted of the same set of customers? It would perhaps raise eyebrows to know that we are not only distributing DVDs but that we exploit them through the cinema, through rental and retail customers and via free/pay TV and video-on-demand. Our
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Koch’s MD Craig McNicol says ‘vertical integration’ and ‘cross industry exploitation’ are key for all distributors
collaborators but also
because the way
We believe in the future of the High Street, and this is one of the main reasons we crossed industries into film. Craig McNicol, Koch
recent tie-up with G2 Pictures will see us acting as their partner as we build the Horror Fest brand in the UK to support the release of the ‘After Dark Originals’.
YOU’RE IN THE MOVIES Handled by Lionsgate in the US, Koch will be working with G2 to maximise the brand’s launch in the UK where the titles will be showcased theatrically from late January 2011. This is before we turn our attention to the launch of five Joel Silver- produced movies beginning with Transitand then the next movie Dragon Eyes starring Cung Lee and Jean Claude Van Damme. Our move into film came not only because we see the two industries as natural
that films are financed is similar to how we have built relationships in the games business. In film, the role of a producer is to raise the finance to turn a promising script into a film, sometimes working with a sales agent they will sell the film country by
country. The resulting
‘sales guarantees’ from local distributors are then leveraged into working capital at a bank or other finance provider who advance the monies to the producer. For many years we at Koch have worked closely with partners in a similar symbiotic way. They provide the idea, the development know-how and in some cases the desire to self- publish, we provide the sales guarantee, the marketing and logistical infrastructure to fully bring the project to market. Again I’m sure you’ll agree that this does not meet the normal definitions of a distributor. Next time you are looking to review your distribution make sure to talk about it first. Because discussing something as elementary as telesales, might just lead you to new categories of interest.
November 12th 2010 39
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