Altruistic inventor

Growing up above a grocery shop in Tipperary town could hardly have prepared John Ryan for the role of being chief executive …

Growing up above a grocery shop in Tipperary town could hardly have prepared John Ryan for the role of being chief executive of a Nasdaq-quoted technology company but he puts his success down to a childhood love of tinkering with ham radios together with a sound Irish education . . . oh, and a bit of luck.

Based in California, he was in Ireland recently to hand over $850,000 (€942,000) worth of stock in the company he founded and runs, Macrovision Corporation, to the University of Limerick. He is also establishing a scholarship for students from his home town.

Why all the largesse? "I think I should give something back," he says.

The advantage of the stock gift is that it avoids paying the tax which would be due if he sold the shares to give cash. And because the university is a designated charity in the US, it does not pay tax on receiving the gift.

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His success is "to no small extent" because of his education. "There must be many Irish people abroad who have built companies and have been successful and benefited, as I did, from an excellent education." When he met the founder president of the university, Dr Ed Walsh, he was impressed by the work being done at the campus.

"The quality of education in Ireland is second to none and university graduates have an excellent advantage when they go abroad."

His gift is being used to go towards the building of an £11.4 million Materials and Surface Science Institute and to fund, in perpetuity, a scholarship for research students.

From the family grocery shop, he learnt about "some of the elements of doing business", although he puts the prosperity of his own business down to a combination of his expertise, the foresight of a businessman who gambled $75,000 of his own money to bankroll the venture and luck.

"I have been incredibly lucky. Some people will tell you that you make your own luck and that is true too, but there is no doubt that luck plays an important party in everybody's life."

His second-level education was at the Abbey School, Tipperary, and he went on to University College Galway to study physics. "It was not that popular a choice in those days but it was something I was very fond of."

Despite the love affair, which developed from his childhood ham radio hobby, he left the UCG course early to take up a job in television electronics in RTE's development laboratory in 1966. "I made that my career," he says.

That career also included a stint with Yorkshire Television in Leeds where it opened its studios in 1968. The job, then and now, involves the development of customised equipment. "You cannot always buy what you want," he says. "In a television broadcast company like RTE or Yorkshire, there is a lot of equipment that is necessary and is not readily available for specialist programming applications."

After six years, he moved to Sunnyvale, in Silicon Valley, to work for International Video Corporation in 1974, designing TV cameras and broadcast equipment, and focusing on video technology.

"I went seeking opportunity," he says of the move with his wife, Pauline, and their first child. Two years later, he moved to Ampex as director of research and development.

In 1983, he co-founded his current company Macrovision Corporation, which specialised in developing video security technologies. He provided the technology and a friend of a colleague backed the venture with $75,000.

"He had made a successful business in real estate and he was looking for an opportunity to invest in a technology company."

He describes the backer as a "gambler" and says he is one too "in the sense of being prepared to try slightly off-the-wall ideas". "I had, at that time, made a decent reputation as an inventor in the video field. He agreed to fund and research it for 12 months."

At the time, the war between the Betamax and VHS systems was raging and John Ryan "was on the sideline watching". The outcome was "critical", he says. "I had developed a technology to prevent video programmes from being copied by VCRs. That technology worked a lot better on VHS rather than Beta. Fortunately for my company, VHS was the one that won."

The company was floated on the Nasdaq exchange in New York three years ago, a launch that went "extremely well", he says. The early shareholders have seen a 30-fold increase in the value of their shares. "We went public at $9 a share in March 1997, and, adjusting for stock splits, it is currently trading at about $280 a share."

They have been volatile like many other stocks and are still below their pre-March levels. The year the company floated he was named as Silicon Valley's "Inventor of the Year" for devices which impede the copying of rented video cassettes. Nearly 50 per cent of US households own two or more video cassette recorders (VCRs), providing a temptation to engage in illegal copying. The demand is still there for the traditional video cassettes. Unit demand for VCRs grew by 28 per cent last year.

But the copy protection of the new Digital Versatile Disc (DVD) is Macrovision's biggest growth area, Mr Ryan says. The company is currently capitalised at about $3 billion and now has offices in Tokyo and London.

His skill as an inventor - he holds almost 50 US patents - comes from a love of electronics. He was a ham radio enthusiast as a teenager, spending long hours building transmitters. He says he was always fascinated by electronics and is self-taught.

"Software has the attraction for kids today that electronic hardware had for kids in my day.

"The ubiquity of computers has made it possible for anyone who has an interest in them to write computer programmes."

More than $13.5 billion is lost annually to video and computer software piracy. Mr Ryan believes record labels will have to change the way they do business, pointing out that in 10 years, online copying of material will be as big a problem for videos as it is in audio as people start getting higher speed access to the Internet. It is "the kind of opportunity we try to address".

Wide-scale video piracy in the Far East is unstoppable but containable, he adds. "You can manage it to some extent. It is managed by a combination of technology, which my company develops, plus legislation in various countries which makes it illegal to sell or barter illegal cassettes, and litigation."