How much do you know about Sony DADC? Did you know that it stands for Digital Audio Disc Corporation? Or that its first work was on Bruce Springsteen’s Born in the U.S.A. in 1983, or that its distribution centre in Enfield was destroyed during the 2011 riots? Maybe not, but the chances are you do know that Sony DADC makes discs. Lots and lots of discs.
Now unless you’ve been living in a cave since the 2011 riots, and who could blame you, then you’ll probably be aware that physical disc sales of games, movies and music don’t have a clear future. So DADC is expanding its business, starting with video game peripherals, and it’s got industry veteran Chris Spearing, previously at PDP and Logitech, among others, to head-up its new consumer sales division as vice president. We sit down for tea with him to have to talk about the company’s new direction and how it can offer pan-European services that other distributors simply can’t.
Why has a disc manufacturer decided to expand into other areas?
Sony DADC is a huge distributor that offers lots of services across Europe. It’s the disc replicator for PlayStation games, DVDs and music CDs, for which it provides packaging and logistics. They get shipped to retailers all over Europe, that’s the core business.
But as you’re aware the physical disc business is a little more challenging these days, so what else can you do with all these physical distribution services? If you’re already shipping PlayStation games to large retailers then why not add other things in there as well, such as video game accessories?
"We’ll start with a smaller product offering and grow fast. We are looking for other brands as well. We want a nice offering that fits together well."Chris Spearing, Sony DADC
So the company is diversifying into new areas?
I’m starting the new consumer sales division. It’s a startup within a large company, which is wonderful. I’m having huge support, everyone is excited about something new. There’s a lot of diversification conversations going on at the moment and this is the first one that’s real. I’ve turned up, I’m hiring people, and everyone is saying: ‘this is wonderful, what do we need to do, how can we help you?’.
Dreamgear is the first company onboard, how did that deal happen?
Dreamgear is a North American business, it’s a big player in the market there, and its new accessories brand, Bionik, is now coming to market for the first time globally. It’s transforming its business from what was Dreamgear packaged product into this more premium Bionik brand.
I’ve seen the product, it looks high quality, and Switch is obviously a big opportunity for peripheral and accessories manufacturers...
Switch is a great opportunity, and we’re working with PlayStation as well. We want to support Sony companies obviously, but we’re also carrying products for other consoles. We’re starting with Dreamgear as it didn’t have a big presence in Europe. It had taken some orders and products were going into market from its MyArcade brand, but that was it. We’ll start picking up some of that and with the new Data East license that’s getting quite serious now, retro is growing and becoming its own category. We’ll play a part in that.
"DADC has been doing all the heavy lifting in the background, but now we can really offer a end-to-end full solution."Chris Spearing, Sony DADC
So you’re helping a US company crack the European market, rather than the other way around?
It’s very, very difficult for a US company to say ‘we want to get into Europe.’ What do you do? There’s the UK, France, Germany, all big markets, you can go and hire some people and start it, but you’ve got to talk to a hell of a lot of distributors. They’ll always tell you they can do lots of things. Whether they’ll do it or not is another thing. Can you manage that from the US? No you can’t.
It’s very, very complicated. Different cultures, different languages, different relationships. Business is all about relationships and you can’t do that if you’re on a different continent and time zone.
So this is more than just logistics then?
This is the first time Sony DADC is having a direct to retail sales team essentially, because all the sales of all the products that Sony DADC distributes are being sold by Sony Music, by EA, by numerous publishers.
DADC has been doing all the heavy lifting in the background, but now we can really offer a end-to-end full solution. That’s pretty amazing, no one else can do that anyway, let alone pan-European. This is the difference.
The potential is massive then?
Yes, huge. I’m in a startup phase, I’m staffing up, we’re bringing these brands to market, and we’ve talked to huge retailers across Europe. And they have been very positive. Everything we had coming in for Christmas was pre-sold.
"I want to make it easy for brands. We know that Europe is complicated, you just want to be successful. How do you do it? You can only talk to me."Chris Spearing, Sony DADC
How many countries are you starting out in?
Our original plan was a UK and Spain launch, but we’ve got people from all the other countries around that want to buy now. We can’t do everything in one go, so we’re spreading the product a bit thinner, but we want to get into those markets as quickly as we can. Get established and grow out from there. We’ll start with a smaller product offering and grow fast. Starting with Dreamgear, we are looking for other brands as well. It doesn’t just have to be in the games accessories space. We don’t want conflicting brands, we want a nice offering that fits together well. We’re talking to some brands in the video game space, talking to some brands outside of that space as well, consumer electronics, collectible figures. If we’re shipping PlayStation games for publishers, or DVDs or music, into those retailers then what else can we ship?
So what kind of deals are you looking to make?
What I really want is pan-European, to take over representing those brands in Europe. That’s warehousing, logistics, sales, PR, the full package, all in one. That sets us apart from the local distributors in most cases, the fact that we are talking so broad across Europe.
I was speaking to a large US brand, who asked: ‘With the business we’re doing in the US, what should be the split between US and Europe?’ I said they should be looking more at 50/50 though it takes time to build that. And their European business is significantly smaller than that, so they know they are under indexing.
It’s those relationships, you can’t sit in the US and UK and say ‘we’re going to conquer France tomorrow’, it doesn’t work like that, you have to have local people who can do those deals.
I want to make it easy for brands. We know that Europe is complicated, whether you’re in it or not, you just want to be successful. How do you do it? You can only talk to me.