Personal contact with retailers is the key to success in the Australian software market.
That is the verdict from distributors and retailers alike upon hearing of the imminent launch of French publishing and distribution arm Vivendi Universal Publishing in Australia next month (see ARN June 6, p1).
Vivendi's move into the Australian market is set to coincide with the launch of the Diablo 2 Expansion Pack. The company will handle the distribution of its games software range, which will add titles such as Crash Bandicoot, Jurassic Park and Spiro over the next 18 months. The company has also signed a long-term deal with Tolkien Enterprises for the development of games based on JRR Tolkien's The Lord of the Rings.
"Our whole vision is to be the preferred and leading content supplier across as many distribution platforms as possible," managing director for Australia and New Zealand Pascal Brochier told ARN.
Brochier understands the transition will not be easy. It has made a significant initial investment and the company will gradually expand its presence throughout Australia.
"It would be unwise to pretend we will get it 100 per cent right from day one. Our objective is to continually improve our coverage and service level," he said.
"We are at the stage in our growth and commitment to Australia that we think we can do [distribution] ourselves, and we have a very strong catalogue to do that."
Vivendi already distributes its software throughout North America and Europe - a practice atypical of the US market, according to James Mackay, business development manager of Queensland-based software publishing and distribution house Manaccom.
"You don't often see the publisher/distributor setup in the US," said Mackay. "That's because the US market is so big, you cannot get into it unless you are already a player. In Australia, it is a great cost benefit to do your own publishing and distributing because the market is so small."
Mackay believes there is no reason why Vivendi shouldn't do well.
"I think Vivendi will do great things in the market," he said, although he stresses personal contact with resellers is of paramount importance.
It is a view shared by retailers, many of whom are often sceptical of new players entering the market.
"If a new player goes into distribution it means we have to establish contact, go through the old credit procedures again and so on," said South Australian software retailer Rob Beaumont. "As a retailer, we do not stand to gain much except more paperwork and different procedures."
Brochier admits the software
distribution market can be very tough.
"When we talk to our retail
customers, all are very supportive of the direct-with-the-publisher model because the information flow is easier, which in turn makes planning easier. There are software categories where distributors can add value and many different business models, but it can be tough."
Games software is one of the few categories with significant growth, he said.
Edward Fong, marketing manager at OziSoft, said it was difficult to compare different software publishing and distribution companies within Australia because each publisher operated under a different business model.
"It is hard to say categorically what works and what doesn't," he said.
Fong suggests publishers such as UbiSoft and Vivendi have decided to take on their own distribution because the software market - and particularly the games sector - has grown.
Ozisoft has been distributing third-party software in Australia for around for 18 years, catching the attention of publishing house Infogrames which bought a majority share around two years ago.
"It is a unique situation because our third-party focus has been in place since day one," Fong said.