A PIONEERING video game developer has predicted that crowdfunding will come to dominate the entertainment industry as new digital distribution channels disrupt traditional publishing and retailing business models.
Speaking at the 10th annual Venturefest in York yesterday, Charles Cecil MBE revealed how he was able to raise nearly $1m in just 30 days with the support of 15,000 fans of his multi-million selling Broken Sword adventure game series.
He raised the money through Kickstarter, the US-based funding platform for creative projects. Mr Cecil told the audience that his shareholders and fans “are the same people” while publishers and retailers have external investors.
“We have got a very pure relationship,” he said. He said crowdfunding is “brilliant” and will become dominant in other entertainment industries like film and music, but is not necessarily the answer for all projects. He warned that some ventures could attract heavy funding and then fail, resulting in bad publicity for the new financial model.
Mr Cecil, who was awarded an MBE for services to the video games industry in 2011, added: “In the UK, writing video games happens to be something we are very good at. It encapsulates a very British ability to mould creativity with technology. That’s steam through to the invention of the first computer.
“The key to a successful economy is the ability to deliver creative ideas using technology,” he said, highlighting York’s biotech companies as an example. “There are billions of people out there, particularly in China, who will be able to beat us on technology. That’s why we need to stick with creativity and indeed encourage it.”
Venturefest attracted more than 40 exhibitors and 1,500 delegates to York Racecourse yesterday for the one-day expo for science, technology and creative businesses. The centrepiece of the event was the annual investment competition, which presents young businesses with the opportunity to win nearly £40,000 worth of business services. Six finalists pitched investment opportunities to an audience of investors from the Yorkshire Association of Business Angels. The winner was Intuitive Business Intelligence, a Manchester-based company which brings together critical business information from a variety of sources on one interactive, easy to use dashboard.
The two-year-old business is forecasting a £4.4m turnover by 2016 in the fast-growing business intelligence market. Roger Stocker, a co-founder, said his company “empowers” decision makers with valuable insight into organisational performance. The prize package includes office space, professional services, HR and PR support and coaching.
Investors also heard from presentations from Ilkley-based TTOG Bike, which designs, manufactures and distributes folding bicycles. Paul Gott, the founder, said his patented aluminium frame designs are “the most compact, quickest and easiest” folding bikes in the market place.
Dean Sadler, the former chief information officer at Sheffield-based internet service provider Plusnet, told investors about TribePad, his social network platform for employers to screen potential new recruits. The company has 23m online profiles and customers including the BBC, G4S and Sodexo.
LPV International, led by former academic Hans Verhoosel, pitched for investment in its Lu-Lin luxury tea brand. The North Duffield company already supplies its handmade cube-shaped teabags to Harrods – retailing at £8.50 for eight teabags – and upmarket London restaurant Nobu.
Patrick Speedie told YABA members about In-Part, the Sheffield-based publishing company he co-founded to promote new ideas for academic research to potential industry partners.
Pet Dream House, of Hull, is run by two Chinese friends who moved to the UK to attend university. Wen Liu and Hua Xia invite designers to submit ideas for pet products. The most popular are manufactured in China through a family contact and retailed in the UK. All the finalists are looking for investment.
Chris Wilson, project manager for Venturefest, said: “I have been humbled and gratified by the positive feedback we have had in staging an event in a tough economic environment. With no regional development agency, no Business Link and the local enterprise partnerships still finding their way, we are maintaining that catalyst for future enterprise in the region.”
He said Venturefest will break even for the first time in three years.