Boxman

» see boxman.com as it lived, on the wayback machine

~ the eulogy ~

Boxman shipped to eight European countries and Turkey was not one of them. In 1999 I was online on a modem and buying nothing at all over the web, because the card and the shipping address that the whole model assumed were not things a Turkish teenager had. Music arrived here from a shop you walked into, or later from a download that took most of an evening. Ordering a CD to your door and waiting a week for it was a European convenience I read about rather than used.

The company was founded in Sweden in 1997 by Ola Ahlvarsson and moved its headquarters to London, selling CDs and later other media into eight markets that ran from Britain and the Nordics down through Germany, France and the Netherlands. Its chairman was Jan Carlzon, who had run Scandinavian Airlines. Its five hundred or so shareholders included Bernard Arnault and Alain Levy, the former chief of PolyGram, plus Suggs from Madness and two Swedish bands whose music it was selling, Roxette and Ace of Base.

That was the pitch and for about two years it worked. Boxman announced a subscriber base past 550,000 after christmas 1999, roughly four times what it had a year earlier, and by then it had taken in over eighty million euros. It was the largest thing of its kind in Europe and it was losing money on every order, which in 1999 was not considered a problem worth solving yet.

~ the dossier ~

~ the money ~

The plan was a flotation in april 2000 valued somewhere around four hundred million dollars. The Nasdaq broke in the middle of march and the window closed before Boxman got through it. The offering was pulled and never came back.

What that left was a company burning cash with no route to more of it. The half-year figures to 30 june 2000 showed roughly $36 million of losses against a little over $8 million of sales, which is a ratio nobody was funding by that autumn. A second round was attempted at about £30 million. It raised a fraction of that. On 11 october the site was suspended and the board went to shareholders and creditors asking for a voluntary liquidation, with a buyer supposedly still in conversation. The meeting happened at the end of the month and nothing was saved.

~ the part that actually broke ~

Bill Odqvist, a founder who had walked out in december 1999, went public a fortnight after the collapse with a specific complaint. Boxman had spent around £16 million of a £24 million budget on an IBM and SAP back office that could not do the one thing a record shop needs. Adding a new CD to the catalog, or changing a price, took up to three weeks.

Think about what that means for a music retailer. Every new release is a race, every chart move is a pricing decision, and Boxman could not respond to either inside a month. It ended up building its own front end and its own database structures because the platform underneath had neither the speed nor the flexibility, which is to say it paid £16 million and then wrote the software anyway. Odqvist said he resigned over the deal. The prospectus said the system had hurt customer service. Both were describing the same hole.

~ what it became ~

Boxman was the third Swedish internet company to fall inside six months, after Boo.com in may 2000 and Dressmart in august, and the three of them together are why the phrase Swedish dot-com stopped being a compliment quite suddenly. What is easy to miss is that the diagnosis at the time was wrong. Selling music over the internet was not a bad idea. Shipping a plastic disc in a box to do it was the part with no future, and nobody involved in the argument in october 2000 was talking about that.

Napster had been running for a year while Boxman was failing to add records to its catalog. Apple opened the iTunes Music Store thirty months later. The boxman.com address is now parked with a broker, waiting for someone to make an offer, which is a quiet enough ending for a company that once had Roxette on the share register.

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