UKNM: a chance to make a difference

[Robin Grant]

Dear All


I have been asked to pass this on by Kay Henning who is conducting a study

for the Digital Media Alliance


The study is designed to address 2 basic issues -


1. the obstacles which are actively inhibiting the growth of the digital

media sector, and

2. the specific model or models  - structures and/or strategies - which

would help overcome these obstacles and enable the sector to flourish.


The full text of the discussion paper is below, and Kay is after all the

feedback/opinions she can get - you'll need to get back to her

(

KayHenningcompuserve [dot] com

) by Wednesday 6 May.


lets make a difference


Robin


----------------------------------------------------------------------

Robin Grant, Producer, Brann Interactive

100 Victoria, Bristol, UK, BS1 6HE - http://www.brann-interactive.com/

phone: 0117 914 6260, fax: 0117 914 6125, mobile: 0973 638 390

email:

rgrantbrann-interactive [dot] com

, icq: 362763

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DISCUSSION PAPER


THE DIGITAL MEDIA ALLIANCE (DMA) FEASIBILITY STUDY


'MODELS FOR GROWTH THE DIGITAL MEDIA INDUSTRY'


Your views are sought on -


- What you consider the key barriers to the

development of the digital media community and

industry in the UK?


- What vehicle/s, arrangement/s, organisation/s or

forum/s might minimise those barriers most effectively?



DIGITAL MEDIA ALLIANCE


The Digital Media Alliance (DMA) is an association of interested parties,

formed towards the end of 1997, including the ARTEC (Arts Technology Centre)

and PACT (Producers Alliance for Cinema and television) and a group on

independent production companies.


It is in close contact with BIMA (British Interactive Multimedia

Association), the New Media Group in Wales and IMAS (Interactive

Multimedia Association for Scotland).  The momentum for DMA arose

out of (i) an awareness of the increasing relevance of digital technology in

music, the arts, television and film production, (ii) discussions following

on from issues raised at The Artist, The Citizen and The Entrepreneur, an

international seminar for the Council of Europe, in London in November 1997,

and (iii) discussions in the Creative Media Sub-Groups of the ITEC


(Information Technology, Electronics and Communications) Panel.  This panel

is part of the government's Foresight Programme.


The DMA's first major initiative is to commission a feasibility study which

is focusing on the existing barriers to growth in the industry and how these

may be overcome.  It will also recommend an appropriate strategic framework

within which these developments could most profitably take place.


The study is called 'Models for Growth in the Digital Media Industry' and is

being conducted under the direction of ARTEC.  It is supported by the

Department of Trade and Industry and the Department of Culture, Media and

Sport and other sponsors.


In order to complete this study the DMA wishes to consult widely.  It's lead

consultant has therefore produced this short discussion paper as a 'trigger'

to

group discussions throughout the UK during April and May of 1998.



RESPONDING TO QUESTIONS


In terms of question 1 - what do you consider the key barriers to the

development of the digital media community and industry in the UK? - you may

wish to consider the summary of existing barriers listed below (pages 4 and

5).  Do you agree or disagree with this list?  Are there critical barriers

not included in this list or barriers included

which you consider to be relatively minor or inconsequential?


In terms of question 2 - what vehicle/s, arrangement/s, organisation/s or

forum/s might minimise those barriers most effectively? - you might want to

think in terms of the following.


Model 1: A Cross-Industry Lobbying Body

- the idea of an industry-wide association of organisations and companies

involved in the broad field of digital and new media.  This

association would have a wide remit as an industry advocate with commercial

publishers, the UK government and the European Commission on issues

including industry regulation and terms of trade.


Model 2: Digital Media Commissioning Body

- the idea of a digital media commissioning body or agency which,

possibly in association with the National Endowment of Science, Technology

and the Arts (NESTA), would provide a critical point of coherence, focus and

commissioning momentum in the industry.


Model 3: Digital Media Publishing House

- the idea of a digital media publisher or broadcaster designed to

facilitate product or programme distribution and create routes to market,

both nationally and internationally.


Model 4: Digital Media Investment Fund

- the idea of a specific digital media investment fund to encourage

culturally distinct and culturally diverse new media works, products and

programmes. A specific research and development role might naturally be

added to this model.


Please prioritise your list of barriers and your recommendations for

overcoming these barriers, citing your top 5 obstacles and recommendations.



BARRIERS TO GROWTH


The following presents a summary of the barriers to growth in digital media

in the UK. The issues are grouped under five headings viz. (i) developing an

audience or market, (ii) competitive environment, (iii) prevailing ethos,

(iv) growing a business, and (v) finance and investment.



Developing an Audience or a Market


. there are no obvious commissioning bodies or product development sponsors

for independent producers, thus there is no obvious routes to

recognition in the public domain or the marketplace

. there is no new media equivalent to publishers like Fourth Estate,

independent music labels, the Photographer's Gallery, the new Lottery Film

Funds or Channel 4 which have a remit to promote independent writers,

artists and producers in traditional media

. exactly because digital new media production has been, hitherto, centred

on computers (both multimedia CDs and Internet access has necessitated

relatively sophisticated PCs), its initial development has by-passed

traditional media structures and thus traditional media funding,

development, production, publishing and distribution routes

. the Internet is still an embryonic medium and thus one where it is

difficult to make a substantial profit: understandably, then, commercial

companies are reticent to invest or innovate too heavily where there is no

immediate or obvious return on investment.


Competitive Environment


Critical inequalities exist between the US and the UK in terms of producer

and audience access to the tools and content of digital media, for example:

. the cost of computer equipment is significantly greater in Europe than in

the US

. America Online (AOL), Microsoft Service Network (MSN) and CompuServe (now

owned by AOL) - all American owned - dominate Internet access

. critical issues surround Internet access from digital televisions or

digital set-tops: will we have access to 50 sites selected or controlled by

BIB, for example, or equal access to the 50 million Web sites on the

Internet?

. the cost of European Web access has built in additional costs relating to

telecommunications charges, not experienced by those accessing the Web from

the US, e.g., the key differential being local phone call charges which

apply in the UK but not in the US, and the different costs of digital line

rentals

. Microsoft's dominance of PC operating software worldwide and its close

Internet browser tie-in, Internet Explorer, pose monopolistic threats not

too dissimilar from Hollywood dominance of the European film distribution

business.


Prevailing Ethos


. the psychological distance between the science / computer / engineering /

technical community and the creative / arts community slows both fertile

collaboration and the exploration of creative space between different media

forms

. the dearth of regional venues or forums hampers the hatching / incubating

of new ideas or projects and networking across the creative, financial,

business and academic communities

. the lack of online information resources to find out who's doing what or

what's happening where slows cross-fertilisation: similarly the lack of

electronic venues for showcasing digital prototypes and emerging talent

. there is no co-ordinated UK presence representing independent producers on

the international stage

. existing new media associations or alliances are critically under-funded

. real, big opportunities for learning across traditional media boundaries


are not created: no one has a national role to facilitate this

cross-fertilisation.


Growing a Business


. independent producers are largely dependent on one-off commissions where,

like independent television producers, existing business practice is for the

commissioning body to retain intellectual rights to the work

. a product or work of art which is digitally conceived, composed,

marketed, distributed and 'consumed', i.e., where it may have no physical

existence whatsoever, means it particularly vulnerable to software 'piracy',

especially where legislation is not well developed

. the returns on investment required by venture capitalists have placed

small, embryonic digital industries under financial pressure in a volatile

and unformed marketplace: typically this has resulted in new media ventures

being hoisted on their own 'hype petard' and going to the wall, or being

overly focused on financial performance.


Finance and Investment


. financial bodies and business advice agencies tend to be uninformed of the

particular issues faced by business development in digital

media, e.g., dynamism and fluidity of the market, the nature of competitive

advantage, issues concerning intellectual property rights, where added value

resides

. it is exceptional for such banks and business links to have an informed

individual across the issues facing developers, producers and independent

publishers of digital media

. existing regional funds and sources of venture capital tend to focus on

digital technology rather than digital content

. this traditional caution of the UK investment community is compounded in

digital media where the work or product may never have a physical existence

at all, i.e., the company's assets are entirely intangible.



STIMULATING DISCUSSION



The following questions may be useful in stimulating discussion:


- how can cultural and artistic vitality be sustained and enhanced in a

digital world?


- how can the UK grow large integrated digital media companies and

microbusiness partnerships with strategic leverage and international

'clout'?


- how can emerging European companies preclude cultural dominance and

ownership control by large American content companies?


- what sources of targeted financial investment - private and public -

need to be in place as a catalyst to growth in this area?


- is there a need for a sponsored agency which would commission and

distribute interactive content enabling the UK to compete at a

global level?


- how can these developments mesh with, and complement, related developments

like the National Endowment for Science, Technology and the Arts (NESTA),

the National Grid for Learning, the Information Society Initiatives and the

work of the DCMS (Department of Culture, Media and Sport) Creative

Industries Taskforce?


You may also wish to visit the discussion forum at


http://www.interaction2.org.uk/

This website is based on the Interaction2 workshop event which was held at

Brighton on 26-28 March.  It was called 'Driving the Digital Economy' and

was sponsored by the Department of Trade and Industry, the Office of Science

and Technology, and the Foresight Programme.  It was designed to stimulate


discussion around the theme of 'How the UK can build a viable and

sustainable digital media economy over the next five years?'.


Kay Henning

Lead Consultant

DMA Feasibility Study

7th April 1998