Roadshow Entertainment will wind up its Interactive software distribution division next month, forced out of the market by falling margins and increasing freight costs.
As of October 4, Roadshow Interactive will be disbanded. The closure affects around a dozen staff, some of whom have been with the company for more than 20 years.
Roadshow Interactive, which was taken under the umbrella of parent company Roadshow Entertainment in 1999, distributed hundreds of education and games titles to retailers and resellers around Australia, from publishers such as The Learning Company, Encyclopædia Britannica and Activision. The company will honour all returns and rotations until it closes.
It is believed freight costs had a major impact on Roadshow's decision to wind down operations. The demise of Ansett and the expiry of the distributor's long-standing freight contract late last year had "markedly increased freight costs", managing director Chris Chard explained in a letter to business partners. The distributor was forced to pass on freight charges to its customers at the beginning of this month. Chard was unavailable to comment on the closure at press time.
Publishers have already begun appointing distributors to fill the gap. Activision will extend its existing relationship with Queensland-based distributor All Interactive Distribution (AID), which will exclusively handle the independent retail channel for the publisher.
AID managing director Sherard Kingston said he wasn't surprised by Roadshow's decision to close down. "As it is, the margin in distribution is very small. In sub-distribution it is even smaller," he told ARN. "I can imagine it would be near impossible for Roadshow to make the same kind of margin it does from its movie business and I think it just got to the stage where it couldn't justify the investment."
The deal between Activision and All Interactive will officially kick off next month.