Digital media faces the same struggle as software sector

14 Jul 2008

The emerging digital media cluster in Ireland is going to run into the same issues, particularly funding and scalability, as the software sector in Ireland has faced over the past decade.

The director of the Irish Software Association, Shane Dempsey (pictured), told that Ireland has some exciting digital media companies which could go very far internationally.

“But I think the digital media companies have run into the same issues as software companies in achieving scale,” he said.

“When starting off they can be lucky in attracting funding, locating at the Digital Hub, incubating there for a few years, but then there’s a lack of funding after that.

“Firms typically identify an area of the market or technical expertise they want to target, an area they have a panache for, but the problem is following through in a market where funding is not as plentiful as in Silicon Valley,” Dempsey said.

“It needs to be realised that the digital media sector in Ireland in 2008 faces the same issues as software companies realised in 2002. These firms need greater support in getting their products to international market, as well as greater academia/industry involvement to ensure the business talent is up to scratch alongside the technical talent.”

One reason why firms face a struggle, Dempsey continued, is the lack of a ready-made home market, which companies in the UK, Europe and the US have.

“Irish digital media firms need to look internationally very quickly. That costs money.

“Because digital firms are on the same trajectory as our software industry, they need to scale to bridge the funding gap and that means acquiring the first and second customer really quickly. This makes it nearly impossible to take a breath and look internationally at the product market.

“We have huge potential in the digital media sector and efforts like the Digital Media Forum skillnet will help a lot. We could have a very exciting industry on our hands.

“The software industry has an advantage in that it’s been around for a while and has a lot of serial entrepreneurs with the scars on their backs to prove it. Many of these people have developed from technologists into business people and there’s a mature cross-pollination between technologists and serial entrepreneurs.

“If we could foster a cross-pollination between software entrepreneurs, digital media start-ups and serial entrepreneurs – it would be a powerful combination,” Dempsey said.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years