Introduction
The aim of this paper is to stimulate ideas and provoke lively debate with regard to the development of the entertainment industries over the next seven years, with particular emphasis on the future of entertainment content. Entertainment content producers include television and film production companies, the A&R departments of record companies and music publishers, games developers, artists, writers, and live events producers. We chose 2010 as our focus because the end of the current decade is within the sights of current medium-term strategies. 2010 is also the date set by the UK Government for analogue switch-off, there is thus incumbent in this year an expectation that the UK’s technological and communications infrastructure needs to have developed beyond a certain critical level, causing ramifications throughout the entertainment industries.
We hope the ensuing discussion will inform the business decisions of all producers, distributors and publishers of entertainment content, whether they be television programme-makers, film, music or live events producers, or games developers. Our motivation in producing these scenarios is based on one prime assumption, namely that the boundaries between different types of entertainment content, ie: music, television, film, gaming or live performance are becoming increasingly blurred. Today we have publishing companies running television channels (eg: Emap), broadcasters becoming live event producers (eg: Radio One, MTV) and website publishers becoming television producers (eg: Zeppotron). We see such diversification as set to continue, whichever of the following scenarios predominates.
Running in tandem with this trend, and at times intrinsic to it, is the increasing pace and complexity of technological development. All entertainment content producers are facing disruption to established value chains and traditional business models through the emergence of new digital technologies, enabling communication and interaction on a scale previously undreamt of. However, investment in new technologies is costly and the rewards unclear. As entertainment content producers, a key question we face is: “Should we be investing more in interactive ideas and projects?” And, if so, how should we go about establishing ourselves in these new markets with the minimum risk?
The two axes
Out of the many uncertainties affecting the entertainment industries today, two stood out as central to our question, namely:
• The pace of technological development and uptake (‘convergence’ axis)
What will the technological landscape look like in seven years time? What will be the level of consumer demand for new technologies, and how much will they be prepared to pay? Will there be a highly developed infrastructure in place?
• The degree of corporate consolidation, both vertical and horizontal
(‘Consolidation’ axis)
Who will have control over our technological infrastructures, publishing mechanisms and distribution systems? Does size matter? Are large organisations necessary to compete effectively in an ever more complex technological world or will intellectual property laws and digital rights management systems be robust enough to enable smaller corporate entities to prevail? Can the law develop ways in which to protect our intellectual property sufficiently; enough to ensure the content creator receives payment and curbs piracy?
The outcomes of these two uncertainties will determine the viability of the business models that are essential for us to justify investment in interactive content. In the current economic climate, it appears that many interactive projects have been shelved – perhaps indefinitely. In debating, the validity of these scenarios, we seek to identify the key drivers and barriers to creating digital interactive content; in essence, to answer the question, has the much-vaunted ‘interactive’ revolution been postponed – or simply cancelled?
The Scenarios
(1) e-Giants
high convergence – high consolidation
Consumer demand for interactivity is high. People engage readily with the media at all levels and at all times. Many have webcams in their own homes; The Truman Show is virtually reality. Always-on, all-pervasive multimedia stimuli are everywhere. Content flows almost seamlessly between the different communications channels, constantly updating and with the capability to be highly personalised, responsive and intelligent. Communications technologies, IT & media are integrated to the extent that consumers do not consider them separate services. Indeed, they are marketed and paid for as one and the same by one provider.
A few large corporate entities populate the market landscape. These are vertically integrated and cross-media (mostly international) conglomerates that control both the creation and provision of media to consumers. These new household brands are not necessarily traditional content developers but those with marketing and distribution muscle; they have names such as Wallmart- BSkyB and Unilever-RTL. There are a dozen or so of these incredibly powerful entities globally, making profits through ‘brandcasting’ – effectively offering a ‘lifestyle experience’ to consumers.
The basic content desires of the mass consumer are fulfilled as and when required by these e-media Giants, which behave much like the Utilities (water, gas, electricity) did in 2003.
Because all media is available via any channel, anywhere, at anytime, context-sensitive and personalised services are highly valued. As total convergence and intercompatibility of networks and devices becomes a reality, interactive delivery and basic media such as the top news stories and the top 10 singles of the day become commodities - usually included in the price of connection. Some media is valued at a premium, such as music written specifically for personal occasions, but only the very wealthy can afford products such as exclusive personal soundtracks to their lives…otherwise, content is practically a public good. You just have to pay to have it delivered. Besides, the pace of technological change has been such that intellectual property has become almost impossible to protect. The economic model for entertainment industries no longer focuses on IP but on the ‘packaging’ around the content – services, marketing, choice of channel etc.
(2) Digital Diversity
high convergence – low consolidation
The technological infrastructure is highly developed. Society is egalitarian and inclusive and access to technology is available to, and desired by all. Peer-to-peer networks abound and grassroots communities broadcast content across all channels. Individuals consume media voraciously and expect to be able to access content ‘any time any place anywhere’ through the technological device of their choice. Communications technologies, IT & media are integrated to the extent that consumers do not consider them separate services, but the companies that deliver these services remain independent from one another. Consumers see genuine personalisation of content as the key differentiator and companies that facilitate this ‘need’ are the most successful.
Technological change and individual consumer passions are so fast moving, that specialisation is the key to survival. The entertainment landscape is populated by a multitude of content creators and providers. Technological standards are such that these independents can co-exist peacefully in spite of content & service specialisation. The standards that make this co-existence possible also provide the platform for consumer to artist payments, meaning that consumers pay for both the content they enjoy as well as its delivery. Consumers respect this and are genuinely happy to reward creators directly for their work. Digital Rights Management and watermarking systems are also highly developed and widely available. Because individual, bespoke content is so desirable, and because of the incessant clamour for new ideas, creativity is highly respected and economically valued. In fact, the majority of consumers are creators of content themselves, so are happy to reciprocate where necessary. Individual artists easily make money from their work and do not need large corporations and teams of lawyers behind them to ensure that content is protected.
(3) Land of the Monoliths
low convergence – high consolidation
The few media and technology conglomerates that dominate the marketplace strongly shape consumer desire for what and how media is consumed. Smaller content providers are effectively slaves to the whims of the larger distribution channel owners. The BBC, BSkyB, BT, Vodafone and AOL continue to act as gatekeepers. These network operators and broadcasters, whose business models continue to be dependent on advertising, have seen continued massive slumps in revenues due to the continued economic slowdown caused by intermittent global political uncertainty.
In this ambiguous political climate, personal security is paramount and technological investment and development has focused mainly on improved safety devices and the protection of existing communications networks. As international air travel becomes problematic due to the continued terrorist threat, videoconferencing and mobile telephony have become increasingly important; however there has been little convergence of IT, communications & media; ADSL never really took off, 3G failed to excite and broadband Britain is a lost dream.
Non-discriminating consumers are spoon-fed content from their television screens while the PC sits in the corner of the bedroom and is used for paying bank bills and picking up the occasional email from travelling children. The couch potato rules…in fact, it could almost be 2003! Because the distribution networks are controlled by a few established players and broadband does not exist to distribute multimedia content, the risk of piracy is much lower and digital protection of intellectual property has become far less of an issue. Although there is little mass-market convergence, grass roots interactive communities exist and contribute to the number of players in the marketplace. The marketplace is basically split between a large segment of consumers who follow mass media and those that follow the independent scene, contributing to it in turn.
(4) Lo-tech Maze
low convergence – low consolidation
Prolonged war has had a catastrophic effect on global GDP levels; virtually all Western nations have been in recession for a number of years. The majority of large American-led global media and entertainment companies have filed for Chapter 11 sometime over the past 5 years and only lean, smaller companies remain. Governments, in an effort to re-invigorate media and communications have relaxed market rules, lowering the barriers to entry. In the UK, after the collapse of the larger commercial broadcasters, ITV and BSkyB, broadcast distribution licences have been re-auctioned and snapped up by fast-moving smaller players. The BBC still exists but in basic form and has ceased to invest all but essential new media.
Post-redundancy and completely disillusioned with corporate life, many consumers now run their own companies. Lean, hungry co-operatives consisting of creative entrepreneurs populate the business landscape. Community channels run on shoe-string budgets appeal to audiences hungry for local information and keen to support local talent. Society has become increasingly introspective. Consumer ignorance and distrust of new technology combined with a lack of infrastructure and clear revenue models has led to a return in popularity for grassroots entertainment. Live sporting events continue to be popular and karaoke down the pub is a favourite Saturday night activity. Escapism rules and cinema continues to entertain, although the old fashioned film formats are still considered the best.
The legislative framework for protecting intellectual property is such that content creators see value in investing their time and effort in producing new ideas. Ideas and creativity are respected and protect-able, and lack of technical sophistication means digital piracy died a death some time in the mid noughties. Independent record labels, niche writers and low-budget filmmakers benefit hugely from this situation and quirky, highly creative content is widely available. However, it will be a long time before the technology is there to justify creation of interactive ideas and interest in digital products and services remains low.
Jemima Gibbons & Alison Linskey, March 2003
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Key Bibliography
• Gibbons, Jemima & Linskey, Alison: “Scenarios for Interactive Media 2002-2010”, Futurequest, ed.5, February 2002
• Foster, Robin; Daymon, Christine & Tewungwa, Sam: “Future Reflections: Four Scenarios for Television in 2012”, Bournemouth University/ITC/BASC, November 2002
• Lant, T; Lampel, J & Shamsie, J: “Uncertain Globalisation: Evolutionary Scenarios in the Future Development of the Cultural Industries”, August 2002, chapter forthcoming in their book, “The Business of Culture: Emerging Perspectives on Cultural Industries,” Stanford University Press, publication date tbc.
• Rosenfelder, Jo: “Channel 4 and the challenges of interactivity”, MBA thesis, City University Business School, September 2000
• Simpson, John; Auckland, Marc; Kemp, Jeroen; Pudlatz, Marc; Jenzowsky, Stefan; Bredehorst, Bernd & Torek, Elizabeth: “Scenarios for Future Work in the Knowledge Economy”, Deliverable 1.2: Trends and Visions in Km, European KM Forum, 2000
• Spectrum Strategy Consultants, “From Exuberant Youth to Sustainable Maturity” (report on the games industry), DTI, September 2002.
