I come from a long line of retailers. I learned early in life that the shortest route between maker and buyer is the cheapest and most profitable. So at first I was skeptical about Singapore’s argument that the world’s most connected island should serve as a digital hub for U.S.-based companies wishing to distribute digital media like films and games throughout the populous, diverse and fragmented Asian market. While I was attending CommunicAsia 04, IDA , the organization hosting me, it introduced a digital “games bazaar,” which the hand-out press release described as, “ a scalable platform that allows games companies, publishers and distributors to test and deploy their game titles” into the region faster, easier and cheaper.
I doubted that it made sense for Hollywood and game developers to stop in Singapore. We already have direct access into India, Malaysia, Thailand, Vietnam and the three North Asian jackpots of China, Japan and S. Korea. Games and movie distribution was not the story I had come to cover, but digital strategy and broadband policy were and I did not immediately see the clear connection. With my signature paucity of diplomacy, I expressed my views to Thomas Lim, IDA’s director of Lifestyle, Education, Games and Entertainment, who is spearheading the island’s digital distribution hub ambitions with open-hearted passion. I felt badly the following morning, after he handled my comments with class at the end of a night which had gone too long. So the next day, I requested a meeting with Lim and he immediately made time.
Lim opened with a metaphor likening digital distribution in the 21st century to Singapore’s respected commercial port, which has thrived for 100s of years. It is a “trans-port,” Lim pointed out, meaning that nothing actually comes into the country, nor does Singapore make anything worth shipping, but the country thrives by providing a safe harbor for goods directed to other destinations. Lim pointed out Singapore’s value-added was in the port’s rock-solid infrastructure. It provides the right financial, governance and regulatory mechanisms. Things don’t mysteriously disappear from the port. It’s world class automation system, ensures efficiency in handling, storing, shipping and tracking. It has the right location, and bypassing it requires thousands of nautical miles through rough waters and past unstable countries. It has what Lim calls “soft infrastructure,” assets such as a common language. Revenue recognition and reporting systems are virtually identical to accepted western accounting systems.
Now Singapore aspires to serve as a trans-port in the Information Age. “But, how do you add value to zeros and ones when you are shipping them?” asked Lim. How safe is it to send digital content directly into Southeast Asia, where IP is pirated all the time? “Your IP is safe in Singapore. We vigilantly enforce laws. While all Singaporeans speak English, nearly all speak a second language, which of course is derivative of another Asian country. It understands how to conduct safe transactions throughout Asia. “Not all Asian kids have Visa cards,” Lim reminded me.
A piracy-free Asian culture is nearly unique. Lim points out that mainland optical and digital media piracy is rampant, while Singapore can provide secure pipes while safely guarding IP. IDA is working with Texas Instruments, who makes the chips that power digital cameras to protect digital movies with watermarked screens and scrambling technology. While Singapore can’t stop someone walking into a movie theater and making a low-quality camcorder copy, it “can eradicate higher-quality optical piracy in the region.”
Lim argues effectively that it makes greater sense to set up a single shop in Singapore where language and viewing standards can be remixed then distributed. “ after test marketing to sub-cultures in Singapore. Because it has ubiquitous broadband, multi-user games can be tested out and publishers can decide whether the game will appeal more to the Thai population, than say the Koreans. “It’s less practical to set up a single office in every country. We have security, skills sets and are investing heavily to become a digital exchange for big bandwidth as well as small bandwidth,” he says. While Singapore is “not needed” for CDs and DVDs from major publishers, Lim says Singapore hopes to serve as a digital hub for Asian music from China, India, Japan and elsewhere—but that part will come later and Singapore’s overall strategy is to move one step at a time toward a master goal in multiple areas.
There was one other asset, although Lim was hesitant to emphasize it. Singapore has no record of either innovation or piracy. Games sent to Singapore, it seems to me, won’t be imitated by local developers. Singapore’s core competency is a safe, reliable, value-added redistributor, moving from the oceanic tankers of the last century into the binary codes and codexes of the next. While the country is moving toward a more creative, innovative culture, no one would argue that it is present there today. As my retailing relatives would say, “There are no knock-offs to knock off.”
I am convinced that Singapore has the focus, resources and infrastructure to reach its aspirations, serving ever-widening circles from Pacific Asia, to pan-Asia to global. Over decades, it seems to me, that role will reach a crescendo of importance, then diminish as today’s issues and controversies inevitably get refined into standards.
By then Singapore, I have little doubt will have moved on to its next big thing.
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