Imagine, a world without pirates

by B. Johnston

The Age — February 28, 1984 [OCR text]

 

If the Federal Government goes ahead with retrospective legislations to protect computer software by copyright, then Albert Langer, several prominent user-groups, and various educational institutions will be sued. This is a promise from Jodee Rich, managing director of the major software supplier Imagineering. "Our business is suffering from the current software copyright situation and it is a problem that has been around for a couple of years well before the Federal Court decision last December which brought it out in the open," he said. "Computer games on disk have been extensively copied, illegally, for a couple of years now and it has affected a large part of our business. "But our legal advice has always been that it would cost us around $100,000 to mount a test case. It has also occurred in some of the microcomputer business packages as well, but the Federal Court decision last December in the case involving Apple threw doubt on the whole matter of legality of software copyright." That case, he said, had shaken the whole computer industry in Australia and countries which export business software. "But if there is one thing Justice Beaumont (the Federal Court Judge who made the decision last December) and Albert Langer (Software Liberation) have done, is that they have forced the computer industry to join together, get our own house in order and look at some of the issues involved."

Jodee Rich is only 24 but he is a young man totally committed to the company he started from scratch a little more than three years ago and has built up to a multi-million dollar concern. Imagineering is a wholly-owned company of Studio Australia, a concern owned by four members of the Rich family, including Jodee. It is believed to be the largest national supplier of entertainment games for home computers and business software packages. Last year the company had a turnover of $4 million. This year it is expected to be $10 million with 65 per cent being derived from the supply of business software, and the remainder from computer games packages. The company is a wholesaler, not a retail outlet, and carries a total of 1500 different product lines, ranging from micro-computer business software, right down to some of the most popular home-computer games on video disks. It employs a staff of more than 50 and every member is totally rigid in the belief that computer software must be protected from illegal copying, whereby royalties to developers are avoided. It is doubtful if any staff member is more than 30 years of age. The whole company simply abounds with youth from the bottom up.

"The Australian microcomputer software market is estimated at about $200 million each year, and it is growing at about 50 per cent each year," says Jodee Rich. "About $5 million of that yearly sales total constitutes Australian-developed software packages - those written in this country. "It is still only a fledgling industry in this country and it must be protected. Otherwise it will never get off the ground and it will mean yet another local industry will die. "It's as simple as that there is no in between," he said emphatically. Until two years ago, Imagineering, had been a hardware and software developer and retailer but the company was in danger of being too diversified. It was then that Jodee Rich decided there was only one way to go - become a software importer. Apple and Commodore computers were still comparatively new in this country but he was convinced they would be the tools of the future and banked his business on this belief. It was a calculated gamble but one that is paying off handsomely for the Rich family. The company now has the distribution rights of such business packages as Wordstar, Visicalc, and the latest success, VisiOn.

Imagineering has been one of the primary targets by organisations such as Public Domain Software Library, which sells unauthorised copies of popular microcomputer business software, minus documentation, for around $30, several hundred dollars cheaper than they are available for at most of the computer retail stores. A spokesman for Public Domain Software Library, Albert Langer, told this writer several weeks ago that he believed Imagineering was also making excessive profits from microcomputer software, and that the company was merely an import organisation for American software multi-nationals. "Yes, I have heard claims that our products are considered expensive by some microcomputer users and various groups like Mr. Langer's," Rich said. "But I can assure you we do not make excessive profits. We run a very lean ship and simply depend on volume turnover to keep business growth and profit on targets. "More than 80 per cent of turnover comes from only 300 product lines, but we carry $3 million in stock for the 1500 product lines at any one time, and that has to be funded from the business. "But as I said earlier, some of the best-selling games and business micro software packages we supply, were developed right here in Australia."

Jodee Rich is unlike many proprietors in the computer industry. He does not blink an eyelid, nor evade any question, even if asked some of the most probing or direct questions, personal or professional. He spent 15 minutes showing the cost components of three business software packages selected by this writer. They were Wordstar and two others. The recommended retail price of Wordstar is listed at $595 by Imagineering. Of that amount, only 40 per cent constitutes the mark-up margin incorporated by Imagineering. As with most business products, the Government is the big winner with sales tax and other duties. Imagineering buys a master copy of the software package from the developer plus an agreed amount for the number of copies distributed in this country, for royalties. The company then copies the disks at its head office in Sydney and distributes them with the relevant documentation.

"What some people don't realise is that we have to stock large quantities for each product, and provide a great deal of support to the 600 dealers around Australia who retail the products. "Because we handle all the problems that the dealers are unable to solve, that cost also has to be included in our prices," he said. He also made the point that it is highly unlikely illegal software copiers are paying Government sales tax and other duties on each package. He estimates that alone could be costing the Federal Government up to $5 million a year. "And what about the locally-developed microcomputer software? I bet that developers are not being paid the royalties to which they are entitled. No, it's not right whichever way you look at it it's simply not right." He also queried why organisations like Public Domain Software Library should charge around $30 for a copy of a popular micro software package when a blank microcomputer floppy disk can be bought in quantities for about $5 each and only two microcomputers are needed to make a copy.

Jodee Rich is emphatic about his intentions. And he is a young man who means business. He made his way in business the hard way. At the age of 12 he started his first business venture, supplying and cleaning aquariums in offices in and around Sydney. He charged $100 a month and employed a school friend to clean the tanks. At 17, he bought his first car with the profits from the aquarium business and invested the rest in the stockmarket. Since then. Rich has not looked back, although he claims he still works 70 hours a week and does not have much time for his favorite sports, swimming and alpine skiing. He has a degree in economics and is a great believer in delegation-style management. He does not tell his staff how to do their jobs and the only time he interferes is when they ask for help, or cannot meet their respective targets.

In the past few months, the company has extended its product line into new areas, such as the supply of Apple disk drives and a range of IBM PC-compatible add-on and add-in memory devices. However, one of his principal ambitions is to see Australian-developed software become successful overseas, particularly in US markets. And he has put his money where his mouth is by opening a branch of the company there to distribute some of the Australian software to major American micro retail outlets. "You can see how well local products do there by the success enjoyed in recent months by Profin (distributed by Arthur Young) and Attache (Gary Blorn).

He said the current software copyright situation had caused a few problems with American software houses, a couple of whom wanted to withdraw the packages from Imagineering but were talked into continuing supply. "They are most upset and have every right to be," said Rich. "They said that any Australian-developed software will be declared "black" in the US unless we quickly sort out the current situation. "But it is the local industry that must be thought of in this whole issue. Software development here is at a very sensitive stage, and is still not big enough to stand on its own feet. "Australia's future in the technology race is in software and most of it in the microcomputer arena, the market which needs the most protection if it is to thrive in this country."

 

Software Pirate Buster sticker


 

$25m in five years, imagine that!

The Sydney Morning Herald — November 26, 1985 [OCR text]

 

Jodee Rich began dabbling in computers when he was 20. Five years later he is the founder and managing director of Australia's biggest microcomputer software and peripheral distributor, Imagineering Technology Ltd, with sales last year of $25 million and which only last week announced plans to go public. SUSAN HELY reports.

When you meet Jodee Rich, the comic book character Richie Rich springs immediately to mind. Richie is a kid with spectacles who sits at a big desk with millions of dollars at his fingertips. Jodee is a slight 25-year-old bespectacled managing director who sits in a huge, pale-grey, ultra-modern office with an enormous fish tank, pots of pretty, artificial silk flowers . . . and in command of Australia's biggest microcomputer software distributor, Imagineering Technology Ltd.

But while Richie's millions came from his dad, Jodee's have come from building up Imagineering from sales of $13 million four years ago to $25.68 million for the year ended August 31 last and a network of 1,500 dealers in Australasia, making Imagineering just ripe enough to be listed on the stock exchange next month. Rich Jodee that is - is beginning to dabble in the delights of the newly acquired success and has just moved from a self-contained flat at the back of his parents' Bellevue Hill house to buy the house next door.

His computer boffin looks prompted one leading stockbroker to say : "He looks like he broke into the Australian Defence Department's computer when he was 10." Rich, who must wear the tag of a whiz-kid millionaire until be turns at least 30, says: "in this industry you see people who go to market on futures and we feel quite strongly that we are presenting a picture of a company with a track record and a well-founded distribution.."

Ord Minnett approached Imagineering two and a half years ago and tried to sweet-talk it into going public "But we didn't feel it was the right time," explains Rich. He also claims to have rejected takeover offers from Thorn EMI and Consolidated Press. Ords persisted and recently won the business as underwriter when Imagineering was ready. The broker admits it has had "every computer buff in Australia knocking our doors down looking for stock". The heavy demand has made it very difficult to keep everybody satisfied, as about 15 per cent of the company's 40 per cent public issue of 9.6 million 50c shares went immediately to staff (who swallowed up 10 per cent), dealers and suppliers. Rich is obviously proud of the response from the staff and believes it will involve them more in the company. He admits it was one of the two main reasons for going public. The other was to be independent of his father's guarantee facilities.

His academic air is matched by an impressive record beginning with dux of Cranbrook, followed by a year of medicine before transferring to economics law. But the lure of business prompted him to drop law and finish economics, majoring in accounting.


PHOTO CAPTION: Jodee Rich . . . "We are very aggressive in keeping contact with our customers."


Rich made his debut with a commodities analysis software package for an Apple Computer for merchant banker, Hill Samuel. The program analysed commodity futures trends both graphically and statistically and even predicted the movements in the futures market. But he was attracted to bigger profits which could be made from selling microcomputer software. He initially financed the business with $20,000 earned from an aquarium-hire business he started at 13 and $30,000 from a bank overdraft. In 1982, Imagineering was $49,000 in the red, by 1985 net profit rose to $1.05 million and its major clients include Computer-land, K mart, Grace Bros, IBM and Apple. Rich and his father, Steven, retain 60 per cent of the company. The stake is valued at $7 million.

The $4.8 million raised from the float will be used to promote a 100 per cent increase in growth in Asia and a 50 per cent expansion of its New Zealand arm. It will also be used to distribute new products such as RSI-proof monitors. Rich says the future plans are limited as it is unable ever to sell computers or go into retailing "as we will be competing with our existing customers such as IBM". Instead it must develop its distribution network and "acquire small companies in the industry which will complement our distribution". This means swallowing any of its 20 smaller competitors who control the other 50 per cent of the market share. But Rich backs off from revealing any firm plans. He also believes Imagineering's unique distribution system could be applied to other industries in the future.

Imagineering has won its 50 per cent market share of the Australian independent microcomputer software market estimated to be worth $35.6 million by very competitive pricing and vigorous special treatment of its customers. "We are very aggressive in keeping in contact with our customers and our suppliers so that when we have a new product we tell everybody about it very quickly through our telemarket"

Telemarket is a group of people telephoning the clients with information about the new products. Each operator makes 800 calls a day. The client can dial up the teleservice on a computer and see for himself what is available. Another product, Promptservice, is also designed to please the dealer, with a system whereby the dealer places an order anywhere in Australia by 3:30pm in the afternoon and receives its products by 9am the next morning throughout Australia. "We are just trying to be responsive," he says, summing up the company's strategy.

 


Computer wiz at 22 (sssh!)

by Trudy Storey

The Sydney Morning Herald — November 28, 1982 [OCR text]

 

JODEE Rich, who runs his own microcomputer, software company, Imagineering, does not think of himself as being only 22.

He does not like to talk about his age or the ages of his bright and energetic staff, the oldest of whom is 31. He implies that people associate youth with a lack of professionalism. Not so in the case of Jodee and his team in their offices in Sir John Young Crescent at Woolloomooloo. They may be young but they are cool, keen and highly professional. "I work about 12 hours a day - most of us work hard," Jodee says. "I really enjoy working at the company because everyone has so much energy."

In February, 1980, Jodee started the company with two other people. They began as dealers in micro-computers, or personal computers, when there were about eight dealers in Australia. Now, Jodee says, there are about 150 dealers. They realised there was not much software - the programs fed into a computer to tell it what to do and when - available in Australia and that this was holding up the sales of computers. Jodee says they decided to approach software companies in the US and bring the programs here. The programs for micro-computers can be used for accounting, word processing, playing games, teaching children arithmetic, learning to type and as hundreds of other educational and business aids. Most of the program packages Imagineering sells are developed in the US. The company takes the master disc from the US company and copies it in Australia. Jodee or, his partner go to the US every three months to look at the new programs and bring back the best. He estimates that Imagineering produces 2000 to 3000 program discs a month. They are put into a manual and are distributed to computer dealers in Australia, New Zealand and Papua New Guinea. People from the company teach dealers how to use software and they also write reviews on the latest programs for computer magazines so people can see what is available.

After he left school, Jodee started studying medicine at university. He changed to economics and did computer science. "I always wanted to do my own thing and I was always interested in computers and when the opportunity came up I thought, let's do something," he says.

Jodee considers computers to be personal tools which increase productivity. "People are perhaps thinking computers are stealing jobs," he says. "They are not. They allow people to work smarter, not harder. Because we are able to make our business more efficient, we are able to put more people on who do more productive things." To relax Jodee sails and says that he has a "very understanding" girlfriend.

AMBITION: "I would like to see micro-computer software get bigger and become a little industry within itself. I would like to see Imagineering grow. I would like to see Australian people more computer literate."

IMPORTANCE OF COMPUTERS: "People who use them can be more productive. They have more time to do the things they like to do. They help people to be more organised."

EDUCATION: "It does not bother me what level of education people attain. What is important for me is that people have had experience in what they are doing and, more important, that they are fully committed to what they are doing."

UNEMPLOYMENT: "I think we have an opportunity at the moment with the level of unemployment in Australia. We have a large number of people who have been displaced from what they were doing and we have an opportunity with computers to retrain them and to perhaps take somebody doing a manual job and put them in a situation where they are using their intellect more."

STATE OF AUSTRALIA: "No doubt we are in a recession. It is starting to impinge on the industry but at the moment only to a limited degree. People are still buying computers because they want their businesses to be more efficient. I think we do have a real problem with wages."

 

PHOTO CAPTION: JODEE RICH and some of his team. 

 

 FURTHER READING 

     

   

"In 1983, Apple, worried about the increasing number of illegal clones on the market declared war on the manufacturers. Their first victim was Computer Edge, the Australian distributor of a Taiwanese clone, the Wombat... At the end of 1983 the Australian Federal Court found in favour of Computer Edge... This led to an uproar which resulted in the Australian copyright law being amended so that it applied to software. In 1984 the full bench of the Federal Court reversed the original decision by a majority of 2-1. However, the final appeal, decided in 1986, supported the original judgment by a 3-2 majority." — The Age (May 3, 1988)

                              Where in the World is Carmen Sandiego? (Imagineering Apple II release)

"With an unprecedented $500,000 television campaign, Questor Entertainment Products has arrived. Launched by Imagineering, the new company plans to create a high profile for its range of entertainment software. With exclusive access to products from some of the world's top software houses like Activision, Micro Illusions, Mindscape and MicroProse, Questor seems set to make quite a splash. Although taking over the entire range of Imagineering games, which is comprehensive, national sales manager Alan Bowman promises to seek out and deliver "all the hottest new titles". — Sydney Morning Herald (October 19, 1987)

                     

 

        

Imagineering “Le Floppie” 5Ό diskettes (sold by Myer & Grace Bros)

 

Imagineering Ultra PC/AT 286 advertisement (December 10, 1989 — Sunday Times)

 

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