Digital driver
As head of Woolworths-owned Entertainment UK Digital, Matthew Porter explains why the firm's B2B strategy gives it a unique selling point. Matthew Wall reports
Matthew Porter loves driving fast, whether on two wheels or four, and dreams of one day owning a Caterham sports car. But with two young children needing him to stay in one piece, his beloved Honda CBR600 motorbike has had to go.
This doesn't seem to have slowed him down, though. Ever since leaving Cardiff University he's been wheeling and dealing, setting up businesses, negotiating mergers and moving on to the next challenge, mostly within the digital publishing and enterprise software industry.
Entertainment UK, owned by Woolworths Group, is a wholesale distributor of home entertainment goods. It supplies online and high street retailers with more than a quarter of the UK's entire entertainment output and has a turnover of more than £1.5bn. Porter joined Entertainment UK's digital arm in 2006.
"I started to think about how entertainment formats were moving from physical to digital and how the supply chain would have to follow suit," he says. "It became clear there was a role for a digital aggregator that could handle the complexity of content and metadata in all their formats coming from hundreds of suppliers."
His answer was the Digital Vault, a central distribution platform for delivering digital entertainment content across any channel, be it internet, mobile, in-store kiosk or set-top-box. Developed with Real Networks, it took over two years to build and cost "several millions".
The database contains 2.8m music tracks, more than 13,000 films, TV shows and music videos, 500 games and over 5,000 ringtones, Java games and wallpapers for mobile devices. Digital books will be added in the future.
Digital Vault is a white-label product on offer to EUK's retailer clients and media owners, such as Woolworths, Real Networks, Zavvi.co.uk and Northern & Shell titles Daily Express, The Star and OK!. Obviously EUK is hoping the product will appeal to a wider spectrum of retailers, but there are no plans to market directly to consumers. "We're not interested in developing our own brand," Porter explains. "Digital Vault is strictly B2B. We've built this to simplify the process of digital distribution and allow our clients to sell digital content however they want. It's about adding value for our customers."
Handling multiple terabytes of data across a range of formats isn't easy, but Porter believes the effort has been worth it to create a unique platform that spans most entertainment content types. "There are no direct competitors that do everything we do," he says.
His background in digital publishing for the entertainment industry has helped him learn the art of developing trusted business relationships and pitching new ideas - skills tempered in the heat of the dotcom crash. "Content providers have been understandably very cautious about security and DRM issues, but our existing real-world relationships and trusted reputation have helped allay such fears."
Although Woolworths Group may be suffering on the high street, EUK Digital itself is profitable, with a number of strings to its bow. For example, another product it has developed is the in-store kiosk that enables customers to buy digital content using cash or cards. The units cost around £3,000 each and offer a range of interfaces - USB, memory card, CD/DVD and Bluetooth. HMV is trialling a similar concept.
"The aim was to make the kiosk as simple as possible to use," says Porter. "Customers have access to a selected range of content, not the full Digital Vault database, because we wanted to ensure a shorter dwell time at the kiosk and so increase the number of people accessing it."
The kiosks are being rolled out in the Middle East following a deal with the Al-Fozan Group's consumer electronics retail brand Zonik.
But EUK's digital jukebox business - broadband-connected touchscreen jukeboxes with access to a database of 2.8m tracks - is faring less well. Launched in 2004, it has since been affected by the troubled pub industry on which it relies heavily. The smoking ban, a general fall in pub attendance, the recent credit crunch and the growth of the iPod and the personalisation of music listening have all taken their toll on digital jukebox revenue.
In its mobile division, efforts are mostly directed towards developing location-based promotional services for retailers. Although mobile video content has yet to take off in a big way, Porter is convinced that as large-screen multimedia phones, such as Apple's iPhone and Nokia's new N96, become more widespread and data transfer rates continue to improve,then a growing number of people will consume entertainment this way.
"I see more and more people watching video content on mobile devices," he says. "The main barriers to growth now are data download costs and the availability of good content, and these are being overcome as we speak."
EUK is also keeping a watchful eye on set-top boxes as entertainment distribution channels, although Porter admits that this market is still in its infancy.
Despite his zeal for his job, he still has enough energy to walk the Chilterns in training for the Three Peaks Challenge - climbing Snowdon, Scafell Pike and Ben Nevis within 24 hours. It seems that in the fast-moving world of digital entertainment distribution, you have to be fit to keep up.
CV
Name Matthew Porter
Title Head of Entertainment UK Digital
Age 34
Education 1992-95: BSc Hotel and Institutional Management, Cardiff University
Career 1996-98: International sales manager, Fast Forward Electronic Publishing; 1998-2002: Founder, Hypnosis Media; 2002-04: MD, Magnetic Media; 2004-06: Business development director, Inspired Broadcast Networks
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