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Comment on EU Green Paper on cultural and creative industries

July 23, 2010

As an independent film producer who is turning his focus on the new opportunities of the converging media, I applaud the Green Paper: Unlocking the potential of cultural and creative industries.
The text shows a fundamental understanding of the challenges CCI’s are facing and I much appreciate the opportunity given to all parties to answer and comment on the many issues raised in the Green Paper.

I have been in touch with our local film fund, the VAF (Flemish Audiovisual Fund) concerning this Paper. Together with the Creative Industry Platform of Flanders, they formulated the text Green Paper CCI’s: input from Flanders.
The text I hereby send you, was first written as feedback on their text. This is why my text is written from a Flemish angle. As the situation in many other regions is similar to ours, I believe this text might still be relevant outside of Flanders.

The Creative Industry Platform has received my comments on their text. They welcome it but because of the short deadline and the holidays, the timing did not allow to amend it to their own text. We will continue our constructive dialogue in the months to come.
Since all parties are allowed to give their comments on the Green Paper, I though I might use the text I wrote for the Creative Industry Platform as a basis for the letter to the European Commission.

The comments and propositions in this letter is my personal point of view. They result from my research of the converging media and my experience in developing and producing innovative content. The interactive documentary Where is Gary? was a successful experiment. I have been invited to give case studies on this project for EAVE, the Erich Pommer Institut, the Multi Platform Business School and various universities. The participative TV drama series The Artists is now halfway its financing and has received support from Media Interactive Works.

This letter has three main subjects.
The first chapter sketches the context of Flanders and comments the short term vision of the text from the Creative Industry Platform.
The second chapter describes the characteristics of the converging media and what opportunities e-culture offers for the CCI’s.
The third part formulates three main drivers for the innovation. This part of the text is mostly written as a direct answer to the Green Paper itself.

1. The innovation train

When it come to the creative and cultural industries, Flanders has and had very much to offer in cinema, music, art, architecture, design, fashion, etc… . As the Green Paper mentions “Europe’s long tradition and vast assets (…) clearly have a positive contribution to make to the EU’s relations with the rest of the world.” The same goes for Flanders.
Moreover, the media landscape in Flanders is quite unique because of its concentration of press groups, telecom operators and cinema’s that are locally owned and operated. This offers great opportunities for efficient networking, to create synergies, partnerships with educations, … in other words the ideal conditions to ignite innovation.

The economical crisis and the fundamental change in media-consumption should be seen as opportunities, not threats. These opportunities should be met by fundamental innovations.
“If Europe wants to remain competitive in this changing global environment, it needs to put in place the right conditions for creativity and innovation to flourish in a new entrepreneurial culture. ”
These conditions can be created by cultural labs, multidisciplinary project and new experimental funds but this is not innovation. These conditions should already be in place in Flanders if we simply want to keep up with our neighbouring countries.
In the Netherlands, the Mediafonds supports both development and production of e-culture. In France, Imaginove is actively supporting multidisciplinary education and building synergies in the Lyon-region. London has the conference Power To The Pixel and Durtmund the E-culture Fair . And the European Media programme grants development support for interactive works linked to film, documentaries and TV drama.
In Flanders we don’t have any of these programs or events. As mentioned, our region has a strong potential but we need to jump on the innovation train because it is leaving the station. Those who are ‘impatiently waiting for concrete actions and measures’ will be left behind.

This ambitious Green Paper needs to be understood in paper results from the goals set by “Europe 2020: A strategy for smart, sustainable and inclusive growth”, a text by the European Commission. The text written by the Creative Industry Platform does not grasp the spirit of the Green Paper because is written solely from today’s CCI’s concerns.
I also share its general concerns about copyright infringement and the role of telecom operators. Of course I also applaud the will to exchange knowledge and to sensitize the society about illegal downloading. These issues are indeed fundamental and pertinent for all players in the CCI’s.
But these concerns only looks at our current challenges. The text fails to look into the future and ask what challenges and opportunities lay ahead.

2. Converging media

In 2020 today’s teenagers will enter the professional market, also in the CCI’S. What will be produced in ten years time? How will our projects be financing and how will they be consumed? We can’t answer these questions today but they offer a frame of mind for the issues raised in the Green Paper.

The concept of media convergence offers the best technological and cultural context to look for answers. In Henry Jenkins’ words: “media convergence, can be used to describe the kinds of technological and economic changes which are fostered the flow of media content across multiple delivery technologies, cultural convergence describes the new ways that media audiences are engaging with and making sense of these new forms of media content.”

For today’s teenagers this convergence is already common practice. Their way of media consumption is where old and new media collide. Three characteristics from new media are at the core of this conflict. Digital content can travel from on platform to another, it can be copied and distributed at a near-to-zero cost and it allows participation.

Free to share
In the introduction to his book Free, Chris Anderson writes “This is the Google Generation, and they’ve grown up online simply assuming that everything digital is free.” Because digital content can travel so freely and is copied at no cost, it feeds the assumption that content is free. You can share it for free.
Internet piracy has become such a big threat to the old model because of the first two characteristics of the new media. Piracy is a threat, but the technical opportunities of near-to-zero and cross-media distribution are not. So how monetize on this? Where are the revenues when we make content travel freely?

Participation
“Sharing is the nature of creation” . These words from musician and former Brazilian Minster of Culture Gilberto Gil link the two first characteristics to the last: participation. The new audience interacts with content in numerous ways. From simple comments to remixes and parodies, people take copyright protected content and unleash their own creativity on it.
Strictly speaking this user generated content is a copyright infringement but do we need to resist it? As long as it is not used in a commercial context, we should stimulate our audience to share and create. Copyright protected content therefore needs to be mixed with ‘copyleft’ content. But what is the return of investment?

Content for the converging media needs to be (partially) free, shared and allow participation. We need to develop and produce content for consumers who are looking for new and enriching “experiences”.
As a result, Jenkins concludes “Convergence requires media companies to rethink old assumptions about what it means to consume media, assumptions that shape both programming and marketing decisions. If old consumers were assumed to be passive, the new consumer is active.”

3. Propositions

A new way of consumption goes hand in hand with a new business model. The old model is getting under increasing pressure but the new model hasn’t been established yet. Innovation is essential to make the transitions from the old to the to-be-defined new model. And it will inevitably come but who will take the lead?
This brings us back to the questions of the Green Paper and the particular opportunities for our region. How to create the right conditions for creativity and innovation?
In my suggestions I refer to the current situation in Flanders, but the general idea can probably be applied in other regions as well. I see three main drivers for the innovation:

1. Networking and training to bring together a new mix of skills and create partnerships
2. Innovate existing funds and create new streams of revenue
3. Tax shelter to support the spill-over effect

3.1. Networking and training to bring together a new mix of skills and create partnerships

What set of skills are needed to develop and produce content for the converging media? Storytelling is as old as language itself and will always be at the core of any content. What changes are the tools used for communicating stories. Oral, print, music, opera, radio, film, television, internet,… each tells stories using their own conventions, their own language.
As discussed before, the old media is confronted with an audience that wants to share and interact with their content. They want to get involved. This creates a new opportunity for storytellers.
Because the audience shares, the content/story starts to travel, building a viral effect. Because the audience produces, the content/story grows and feeds the viral effect. Communities are the engine of this mechanism.

Therefore, we need to bring storytellers together with the creative talent that works with communities (social media), viral (marketing) effect and interaction. This talent can be found in advertising, gaming and internet companies.
But they can also be found in schools and universities because the Google Generation is often more skilled in social media than media-professionals. This also brings us to the subject of training offered by university and schools. But I won’t go into this matter at this time and focus on how to bring together the above mentioned people.

MediaNet Vlaanderen is probably the most relevant network because of their broad scope of members. Other existing (eg. Mediarte) and new networks like the Creative Industry Platform can definitely also play a key role.
These networks should shift up a gear and receive the means to do so. The network of MediaNet Vlaanderen brings together the people from the business side of the media companies. Apart from some (recent) initiatives, there are no networking events specifically aimed at the creative talent inside these media companies.
As both networking and training is time consuming and only results in the long run, the necessary stimuli should be offered to attract a broad range of creative talent.

In short, the existing networking and training programs should involve and attract creative talent from various backgrounds.
In concrete, a yearly conference on the converging media should be set up bringing the international pioneers and experts to Flanders. Can this be linked to an existing event or festival?

3.2. Innovate existing funds and creating new streams of revenue

In Flanders three funds could play a key role in the innovation of the CCI’s: IWT, IBBT and VAF.

IWT (agentschap voor Innovatie door Wetenschap en Technologie) offers support for technological and scientific innovation in the broad sense of the word. For example, they are one of the financers of MediaNet Vlaanderen.
IBBT (Interdisciplinair Instituut voor Breed Band Technologie) focuses on ICT innovation. Various culture project in which ICT played an important role have been granted support (theatres, libraries, …).
But the structure of these innovative funds and their applications are clearly tailored for technological companies and hard to access for content producers. Moreover, companies based in Brussels are not eligible for IWT. This is a problem since most content producers are based in Brussels.

VAF (Vlaams Audiovisueel Fonds) is aimed at audio-visual storytelling. Though its FilmLab it offers a modest budget to project that experiment with storytelling. These experiments are mostly artistic, only a few are innovative in the cross-media sense. This fund lacks the means but not the will to invest in innovation in the media. Because of their good relationship with content producers and other funds in Europe, they have the potential to create the necessary conditions for innovation.
The creation of the VAF and its very positive effect on the Flemish film industry also demonstrates the role a fund can play for emerging industries. Not only is it a source of financing, it’s a policy maker, build networks, exchanges knowledge and builds brands (Flanders Images).

Extra budget need to be made available for innovation immediately. The EU set the ‘Barcelona target’ of increasing the investments in research and development (R&D) to 3% of GDP by 2010. In Flanders we hardly reach 1.5%. With extra budgets, these three funds can be motivated to team up and maybe set up a shared program.
Content innovates together with the technology that distributes it. The demand for new distribution technologies grows because of the content that feeds it. Therefore a closer relationship between a content-funds and two technology-funds seems a natural thing to do.

The same goes for telecom operators. 75% of all their revenues come from products that didn’t exist 15 years ago. Many of these new products are distribution platforms that need content to feed them. Like suggested in the CIP-text, telecom operators should do a contribution to the creators delivering content.
The motivation should not be negative (to compensate for the lost income) but positive. Interaction and sharing content generates more traffic. So the operators benefit more from content designed for the converging media. Their contribution should be invested in the innovation of content so it offers them a return of investment. Could this be a way to finance a VAF-innovation fund ? This fund could be similar to Media Interactive Works or E-culture of the Dutch Mediafonds.

Advertising agencies can also benefit from innovation in other ways than exchange of knowhow as mentioned above. As part of the content in the converging media needs to travel for free, it is ideal to be packaged with brands. In this concept of branded content, it is the advertising that pays for the free content just as adds pay for free services on for example Google. To make this work efficiently, brands, advertisers and producers need to team op already in the development phase.

To conclude on this subject one last remark: as the media is becoming more fragmented, sources of financing (and revenues) are becoming increasingly fragmented as well. As a result, the business model is shifting from few sources with large income to many sources with little income. The business model of crowd financing applies this to the extreme.

3.3. Tax shelter to create a spill-over effect

Similar to the arrival of the VAF, the Tax Shetler was a major step forward for the Belgian film and television industry. The effect was also double. Of course it created new financing opportunities, but it also brought the captains of the film industry in touch with captains of many other industries.
By extending the tax shelter to investments in innovating project, an extra source of financing is combined with networking with other branches of industry thus stimulating a spill-over effect.

Other fiscal levers of warranty claims as suggested in the CIP-text can also encourage investors and bank institutions to invest in creative enterprises.

The 3 suggestions bring together various partners with different backgrounds. Education, government, companies, creative talent,… they form the cluster around the ICC’s. Further research and planning should allow to develop a strategy to strengthen this cluster and to launch various incentives for innovation.

4. Conclusion

In Googled, Ken Auletta comments “Most old media companies were inexcusably slow to wake to the digital disruption.” Google took almost 4 years to find its business model and to start making profits. Today it has more revenues then the five major US broadcasters combined.

Where will our media-companies be in 4 or 10 years? Will they be flexible and innovating enough to explore new ways of communicating and distributing stories? And what will the new business model look like?
To my opinion, just as storytelling itself will become more layered and increasingly complex, so will the business model. Converging media suggests converging sources of financing.
The aim of the suggestions made in this text is to create new and increase existing sources of financing to enable the transition from the old model to the new, more complex model. The old model will stay at the core of the new model, just as traditional formats will be the core content. The digital disruption challenges us to take content and the CCI’s into the 21st century.

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