Gordon Robson’s preferred meeting place in London is Home House, the exclusive, uber-chic members’ club on Portman Square whose clientele is a veritable who’s who of the capital’s media and entertainment elite.
On my arrival he leads me through a labyrinth of oak-panelled rooms and corridors, before settling for a table under an expansive window on the first floor. We are the only people in the room – if you exclude the almost invisible staff.
‘I come here because my office is too small and too crowded. It’s private, quiet and discreet – the ideal place to conduct business when you’re heading a public company.’
His company is Stream Group, an AIM-listed venture that he hopes to build into a dominant global player in the ever-evolving world of mobile telephone services.
Thus far, he is not doing badly. His company has doubled in size in the last three years, having ploughed a very profitable furrow in the cut-throat world of chat lines, ringtones and mobile images. This, however, is only the start of the Stream journey. His end goal is to attain a strategic position in the burgeoning world of mobile financial and leisure services – ‘the real telecoms holy grail’.
An unlikely 80s hero
Few are betting against Robson succeeding, largely because there is probably no other entrepreneur in the UK who knows so much about this sector – nor who has been so instrumental in its growth.
Back in 1984, having realized that he ‘probably wouldn’t make it as a musician’, he joined BT, which had just been privatised by Thatcher’s Conservative Government.
‘I was basically approached by BT to help set up premium rate chat and entertainment services. The company was very innovative back then and within a short space of time we had formed Talkabout. It was the first multi-chat entertainment service of its kind.’
Further innovations followed, such as Dial a Disc (consumers would phone up to listen to their favourite track, introduced by pop stars such as Kim Wilde) and Radio on the Phone (‘Mike Smith would come to our office and create clips of very popular music,’ he says).
It might all sound rather quaint now, but it was a highly attractive and high margin line of income for BT at the time.
Chasing the tabloids
Through his friend Martin Dunn, the then journalist on The Sun newspaper’s Bizarre column, Robson was able to set up a meeting with Kelvin Mackenzie and pitched the idea of The Sun running telephone entertainment and information services.
‘Kelvin has a certain reputation, but he is every inch the entrepreneur. He could see immediately how popular and profitable premium telephone services could be and decided to run with it there and then.’ Thus was born the astrological, weather and other phone products all newspapers now operate.
The invention of the phone-in
Having conquered newspapers, he turned his attention to television, where Robson and his team came up with the idea of running telephone-voting services for entertainment programmes.
The first one launched in the UK was for the final of ITV’s New Faces in 1986. Such was the success of this event that the phone network collapsed under the weight of calls. However, the technology was quickly improved, a vastly bigger phone line platform built and within a short space of time all the major networks were beating a path to the telephone voting door – led by the BBC and its Eurovision Song Contest show.
Out on his own
By 1987, Robson was ready to break free of BT. He approached The Sun, the BBC and other clients and gauged their reaction to his plan to set up his own company. The reaction was almost universally favourable and with his partner Justin Byam Shaw (incidentally also a Stream director) he created Legion.
‘We basically put our houses on the line, borrowed some money from private investors and launched in September 1987 – a matter of weeks before Black Friday. We were very lucky.’
His plan for Legion was ‘to drive the business internationally as soon as possible. We had proved the model in the UK so it was just a matter of replicating it.’ This was done with aplomb as deals were secured in Australia, South Africa and Germany. By 1992 Legion had 12 subsidiaries worldwide and by 1994 it was the world’s largest provider of premium rate information services, whereupon Robson promptly sold the business to Matra Hachett of France.
In retrospect, however, he doesn’t consider the sale a success. ‘It was not good timing. Soon after we sold, the telecoms industry was deregulated and the prices you could charge for premium services soared exponentially. We sold out at the wrong moment for the wrong price.’
More bad timing
Between 1994 and 1997 Robson was involved in two main projects. The first was the creation of gaming services for two Australian State Governments. These ultimately failed when John Howard’s new government passed laws that blocked all future developments in this area.
Returning to the UK he acquired a stake in Redstone Telecom and proceeded to form Pipertel to resell Redstone’s premium rate services. He sold this business on to PNC Telecom in 1998, accepting cash and shares in payment. This proved to be another mistake.
‘After I sold to PNC the shares soared from 12p to over 400p. But I accepted aggressive lock-ins and therefore couldn’t sell. Then the market crashed and the company went bust. I’ve still got a million worthless shares.’
A cut above the rest
With Stream though, he doesn’t believe he will suffer the same fate. With the help of managing director Michael Spenser, a man with executive experience at BSkyB, QVC and Disney, he floated the group in 2001, raising £3.6 million.
Its operations mainly consists of Stream Live Services, which sells live fixed-line and pre-recorded services (psychic and astrological phone lines are still big hits), and Stream Mobile, which sells chat services, ringtones, pictures and associated products. Last year, these two divisions were largely responsible for Stream making £1.9 million on sales of £13.8 million in a tough market.
The future of the company though, is elsewhere. ‘I would be the first to admit that Stream operates in a highly competitive market at present. But where we differ is that we are very technically minded as an organization and we are looking to the future to see where our markets are heading.’
To this end Stream is currently developing betting games for Ladbrokes and working on other ways to make inroads into the mobile gaming sector. ‘Mobile betting/gaming will be huge. It is the single biggest market for mobile telephony. We are there already and reckon we will have strong revenues and profits by late 2006.’
The other big hope is mobile banking, a market the group entered by acquiring MChex, which gave Stream a long-term exclusive contract with MobileATM. Says Robson, ‘MChex is a carrier grade platform built by Morse and approved by the Link network for mobile banking transactions. Although we are small, we basically have a core component of the mobile banking market in the UK and direct connections to the five major mobile networks. Mobile banking is coming and it represents a wonderful opportunity, so you’ll forgive me if I think these are extremely exciting times for us.’