Digital Content Roadmapping Study Sections 4.1/2 Commonalities and challenges within the Digital Content Industry

Optimism about the future is increasing Most companies felt that the industry was more stable than it had been, and would continue to improve. “We feel like we have come through the hardest times in the industry, and now it’s about capitalising on the ‘sweat and tears’.” - Focus Group Participant, Sydney “There is a feeling a genuine optimism in the industry at the moment. We had our best year ever last year, and feel like this one will be even better. It’s like the floodgates have opened up again after being closed for a while after the dot.com crash.” - Focus Group Participant, Melbourne

Exceptions to the general optimism The film and television production sectors Reasons stated include Difficulty securing funding for content production The impact of Australian dollar’s rise “We used to worry about looking for work about six weeks out, now we are doing it three to six months out because we know how little is around the corner. I don’t see it changing much for a while.” - Film production company, Melbourne

Exceptions to the general optimism The eLearning sector Reasons stated include Uncertainty surrounding the future of The Le@rning Federation Limitations of the domestic market size. “The market in Australia is in a bad way. The Le@rning Federation made a bit of a difference, but at the end of the day they own the IP and so it’s never going to be a great money-spinner. We are looking at putting our focus into the UK market, as we feel that we can’t survive on what’s available domestically.” - eLearning company, Hobart

Optimism of companies in digital content industry by sector

Common characteristics in the digital content industry The digital content industry is made up of sectors – and companies – with much in common.

Common characteristics in the digital content industry 1. Creativity and intellectual property are central assets, both of which are difficult to value and sell to financiers.

Common characteristics in the digital content industry 2. The industry is heavily reliant on technology infrastructure, and requires regular and expensive refresh to remain competitive. “We replace our boxes (hardware) up to every nine months.” - Focus group participant, Sydney

Common characteristics in the digital content industry 3. The industry is highly susceptible to technology shifts, including platform and format changes. “This year is a critical one for us, with the Playstation 3 and Xbox 2 to be released. Console changes are both eagerly anticipated and slightly feared.” - Focus Group Participant, Melbourne

Common characteristics in the digital content industry 4. Sectors tend to employ a high proportion of contractors. “My record was having a single person business and employment of more than 100 contractors on a particular project. That’s the only way I can do a project of scale.” - Focus Group Participant, Melbourne

Common characteristics in the digital content industry 5. Companies are increasingly susceptible to global market conditions. Content creators state domestic demand will not sustain the current market. “The business model in Australia is flawed, and dealing with the free to air networks is difficult. We need to go overseas, but haven’t got the resources to be able to get on the radar internationally.” - Content producer, Brisbane

Common characteristics in the digital content industry 6. Customers are increasingly sophisticated.

Common characteristics in the digital content industry 7. Commercial success relies upon the marriage of three very unique skills sets Artistic creativity Technical mastery Business management “It’s a strange bunch of people that you tend to get. You have the creatives doing their thing, the technical people putting it into action and the commercial people making sure that you can pay their wages.” - Interactive multimedia company, Hobart

Common characteristics in the digital content industry 8. Recruiting rather than retaining people is a bigger challenge. Animation and games development companies experienced skills shortages Post-production and production companies report few difficulties securing all but the best talent. Some companies found leading edge technical and management skills more difficult to source.

Common characteristics in the digital content industry 9. External financing is difficult to attract. Financiers see digital content as a relatively high-risk proposition. This is exacerbated by the small size of the Australian market and relatively small and immature risk-financing sector.