For years industry giants such as Electronic Arts have ruled Vancouver’s digital media roost, employing thousands and pumping billions into the local economy. But in the wake of the mobile revolution, a burgeoning crop of pint-sized competitors is muscling in on their territory, offering up innovative new games and applications more quickly and more cheaply. Too bad nobody’s making any money.
At 7 o’clock on a Wednesday night, the basement of a trendy Gastown pub has been taken over by young men speaking in a strange foreign tongue. As they talk in the acronym-filled dialect, referring excitedly to SaaSs, APIs and MAUs, you could be forgiven for thinking you’d walked into another country called Open Source whose inhabitants worship a mysterious deity called “the cloud.”
In reality it’s just startup night at the Alibi Room, a meet and greet put together by some unofficial leaders of the digital media circuit, including Vancouver’s Bootup Labs, a sponsor of young digital media companies that’s part venture capitalist firm, part mother hen. In exchange for giving Bootup five per cent of a company’s equity, the founders get office space and mentors for an eight-month term as well as access to a $100,000 line of credit, which, when spent, gives Bootup another 10 per cent stake.
On this night, representatives from about 40 companies are scattered through the bar. They quiz each other about business models, revenue streams, microtransactions and subscriptions, and debate whether today’s big release, the Apple iPad, will take off. From the din of conversation pops the inevitable question, from one young techie to another: “Yeah, OK, but how do you make money?”
It is, indeed, the question facing entrepreneurs at the forefront of B.C.’s digital media industry, a nebulous conglomeration that spans web development, video gaming, digital animation and effects, e-learning and mobile and wireless content and applications. According to industry association DigiBC, the cluster (centred in the Greater Vancouver area) accounted for 1,300 companies, 22,000 employees and $3 billion in revenue in 2009 when it fell under the catch-all phrase “new media” – but don’t use that term here. It stops the conversation flat, like nails on a chalkboard.
“The term new media has been around since we were doing CD-ROMs and it never got updated,” says Boris Mann (above), managing director of Bootup Labs. A wry, sandy-haired 35-year-old, Mann proudly sports a T-shirt decked with his own company’s logo. “New” media generally describes familiar content producers such as filmmakers and video game studios, he says, not this new crop of companies selling their own products electronically. Here, everything is online, heavily geared toward a growing mobile market where smartphones are expected to eclipse PC sales by 2011. And that market is favouring small companies.