Project Timeline 2005–2010

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Report by Andy Lloyd James and Ross Gibson

The Context

This is a report on the first half of a major study funded by the Australian Research Council in partnership with Foxtel, the Australian Communications and Media Authority, and the Australian Film Television and Radio School, the University of Technology in Sydney and the University of NSW. The academic investigators are: Philip Bell, Ben Goldsmith, Hugh Pattinson, Annmarie Chandler, Ross Gibson and Andy Lloyd James. The project is called ‘Outside the Box: Scenario Planning for Australian Television in 2017’. Its purpose, as stated in the original grant application, is ‘to develop a set of strategic conversations about the future of television in Australia’.

Notably, the project is an investigation of the best ways to be ready and responsive in the midst of rapid change; it is not exactly an exercise in prediction. All participants hope to understand how to move nimbly into the future, but no one is promising to describe a singular scenario which we expect to be true. Rather, we hope to gain a systematic understanding of the myriad factors or drivers that are presently at play or looming for the television industry in Australia, and by perceiving these factors systematically we hope to develop ways to speculate about likely developments and re-definitions in the industry during the next ten years.

As it goes into greater detail, the project aims not only to intensify our understanding of television but also to help us know more about how narrative works as a means of negotiating complex, dynamic situations. Particularly, we aim to contribute new knowledge to the scenario planning industry as well as to the television industry. To some extent, this is a matter of defining more carefully what is a scenario and what is a narrative; it is also a matter of investigating precisely what happens when groups of people tell stories to each other in corporate or industrial settings. In other words, we are looking to understand the dynamics of the industry — its people, its technologies, its drivers and impediments — as television and the society that uses it get shunted into the future, impelled by the sudden burst of restlessness that has occurred since the
worldwide rise of online and interactive networks, data-casting, and globalised
economies.

Already there is much to report. Here in this report, mostly in the words of Andy
Lloyd James, we will outline the predicament of television as we discern it after 18
months of investigating the current dynamics of the industry, having interviewed
more than twenty participants in the industry and having also conducted a day-long workshop to synthesise and challenge the experts’ interpretations of the present and immediate future, given that these interpretations were gathered more than a year ago. This report comes at an opportune moment, as we are poised to move into the second eighteen months of the project, a phase when we will be looking to build on the first push of research, in order to develop a richer and more imaginatively challenging array of drivers and scenarios with which to account for possible futures as time moves on evermore urgently.

The Story so far …

In the world of audiovisual entertainment and communication, this is a time of great change, marked by a great restlessness: restless capital, restless governments, restless audiences, restless creators.

One of the common expressions of this is a general belief that the future is
incomprehensible and “too hard” to think about. It isn’t and we should. What’s
happened is that a sector which was mature for a remarkably long time has suddenly been rejuvenated. It’s happened to many other sectors: transport/medicine/finance and they have come though with massive add-on benefits to society. This is no different.

The key point is that much of what we took as fundamentals remain sound: people
are still looking for entertainment, escape, leisure, information, emotion; they are still prepared to pay for it and they are still prepared to accept advertising. The key
difference is that they want these things when they want them, not when broadcasters or exhibitors tell them they can have them. Classic example: MTV here in Aust now has as many mobile subscribers as on-air subscribers.

The digital environment has enabled that wish to be fulfilled and for the first time
content has been uncoupled from time and place.

It’s that shift in the balance of power that has caused most of the angst. The old
model was so solid: government or advertisers gave the broadcasters money to
aggregate very large audiences, the broadcasters gave money to production people to make content that would allow them to achieve that, the viewers bought goods and/or supported good government … and everyone was happy.

What it meant was that as a TV Exec I didn’t really need to know about each of you
as individuals: broad demographics were enough and hit or miss didn’t matter too
much because the audience had to be there. It’s what led Lord Leverhulme to say
that he knew that half his advertising budget was being wasted but that sadly he didn’t know which half!

So we have arrived at a more detailed view into the first major point of difference in the new world of digital communications as it relates to television. Here, on the next two pages, are two mindmaps which pull together some of the key issues we’re facing. The first shows you the world of issues; the second shows you the most important change … people.

[restless tides image] + [consumer /audience image]

These mindmaps show you some of the ways in which we now have to think about
audiences. And the first thing is to call them something other than audiences because audience implies bulk and we have to find these as individuals scattered all over the technological options from cinema to mobile to virtual worlds. These maps represent some of the things we need to know about consumers and some of the places to go looking for them.

The key here is that this is NOW and the people we used to address as passive
audiences have already taken up new technologies and developed new ways of ‘being with’ and ‘being in’ content.

The second major change is that opportunities to make high quality, high value
content are growing exponentially:

The digital content industry is estimated to have generated output worth $18 billion in 2002-03 or about 3.3 per cent of Australia’s total industry gross product (which is akin to GDP). This is decomposed into digital content production (41 per cent), embedded digital content activity (51 per cent), and value added by digital content distribution (9 per cent). Production appears to have been the slowest growing component. Between 1996-07 and 2002-03, this component of the industry grew by an average annual rate of 2 per cent, compared with 4 per cent for embedded digital content, and 5 per cent for distribution.

The Digital Content Industries Action Agenda noted that digital technology:

has major implications for productivity growth in many important industries beyond the core Digital Content Industry itself. Digital content and technology are becoming an important input to other industries and an enabler which helps transform the way they do business.

Without coining the phrase, the action agenda was referring in this instance to the ‘the long tail’ — not just long but bushy, and something that cannot be ignored.

As you go round the mindmaps, what you are really looking at are some of the key
influences that will shape our audiovisual world for the next decade or more. The real meaning of the maps though is the interconnections to be made between the different main headings: the relationships and cascades of changing outcomes that occur when you begin to draw them across each other. One of the changes that we’re already seeing from this is the growth of new kinds of content aggregators from Google down to local and domestic ones all the way down to personal blogs, and we’ll see how BRAND will be a key driver at all levels in the next couple of years. Evidently this is how the savvy broadcasters will develop fastest, particularly as IPTV takes off.

Clearly the opportunity for program makers is to seize the benefits of Web 2.0. The contemporary web at its best is an enabling environment. Think of Ebay and think how that model might be used to introduce new funding mechanisms and new direct relations with consumers BEFORE production begins. And Producers should think of their content as user-driven, offering them opportunity to engage with it in every conceivable environment.

Used effectively the developing web will provide real capacity for Independents to
support their central creative endeavours by locking into the production opportunities growing across industry as a whole and taking advantage of a full range of potential short and long-term distribution outlets. None of this will happen easily but the opportunities are already there. They just need thinking about strategically.

Upwards, sideways, and downwards, the key is “Only Connect” It’s a huge change.

Imagining drivers in the future, we need to include Wild Cards: the obvious ones of damaged economies, oil prices, water, warming, terrorism and strife and dome less obvious. What will it mean that 2.8 billion people are currently struggling on less than $2 per day. Or that the planet has 1.9 hectares of biologically productive land per person to supply resources and absorb waste … but the average person already uses 2.3 hectares and in both cases within forty years there’ll be forty per cent more of us. What will that mean to ageing consumer societies?

But at this moment midway through the ‘Outside the Box’ project, the most important thing to draw out is the risk that is faced by australian quality content producers as and when the advertising the advertising revenues of commercial television begin to slow or to change their particular content focus. We do not for a moment believe that we are looking at the end of television but its contents, funding and delivery methods will change and the indies need to be in a position to lead on this. Seven’s recent announcement of a deal with STBox manufacturer TIVO is a clear indication of the long staying potential of advertising.

In this regard, a major question mark hangs over the future of Public Broadcasting, which has been so studiously marginalised by the Federal Government. The ABC and SBS may well survive, though the latter will be privatised at some stage. But that is not the same as public broadcasting surviving with the diverse and innovative slate of programming that used to be its ‘branded’ raison d’etre.

In one way or another almost every independent production company is dependent on the federal government to secure a living; predominantly through regulation or direct funding through public broadcasting and the funding agencies including Film Australia. And they have been emphatically disadvantaged by the Government allowing the regulatory requirements of the commercials and the national responsibility of the ABC to be paid for via deficit funding. They have been disadvantaged by the decline in the regulated percentage of television commercials.

Disadvantaged also by the structure of DCITA which separates the big end of town
from the Indies and provides no real R & D as should occur in any robust industry … and disadvantaged by the Free Trade Agreement with the US.

The independents also face problems now because the two big agencies, AFC and
FFC will be internally focussed possibly for as much as two years. With reference to the Federal funding agencies, once again we have had a partial review of a
strategically vital sector … a sector that has been partially reviewed dozens of times over the past few decades but almost never has it been reviewed holistically and from the perspective of making and disseminating an increased volume of ‘quality’ Australian content. It’s worth noting that 25 years ago Australia had a good tax-based system (surely, it needed some fine-tuning) and a healthy volume of product coming through. Remember, twenty-five years ago there was NO UK independent production industry. Today we are limping along, and the UK industry — after wholistic realignment — is in a very healthy state and delivering a high volume of export dollars.

The coming development of IPTV (signalled clearly by the 7/Tivo deal) will define a new future for Australian Television and we need to be able to benefit from it. You can read the real power of IPTV in Google’s ambition to service every
TVCommercial on the Planet!

The harsh truth is that the Austrlain industry is in a very exposed and imbalanced
position. Unless there is a clear and powerful voice for Australian content, the
rumble of the bottom line will silence everything. The free-to-air broadcasters have been allowed a dubious 55% Australian content quotient, and the ABC has been reduced to this ratio (and below) too. Subscription TV is all-but unregulated in this regard and what regulations there are cannot be increased. Moreover the pressure will be on to depress the regulations further and again the Free Trade Agreement with US says no ratchetin-up is permissible. And there are no real regulations or quotas for “new media”/ Next question … is IPTV “new media”?

In the face of all this the really desirable outcome is to develop a robust local industry which can attract investment dollars.

Perhaps more than any other State NSW needs to move quickly: this State has largely ignored the reality of digital production and distribution for a decade now. It has lost a lot of the future games business to Victoria and Queensland and it is noticeable that NSW is not hanging onto its historically dominant production base here now.

Can a new way be conceived and delivered for television. The “Outside the Box’
project will have the majority of its work done within twelve months and it will
deliver challenging and stimuating scenarios for the next ten years. An associated
AFTRS consumer research project should be up and running with industry partners within six months and will be feeding us brand new and vital info on what consumers are doing with their media opportunities. All this meshes in with an AFTRS research strand looking in combination at industry structure, regulation and terms of trade here and in the UK/NZ/Canada and the US with the purpose of coalescing the best ideas into a structure appropriate to Australia..

If we can gather a strong consortium of researchers, combing these various projects in order to gain a systematic view of this restless industry, discerned simultaneously at a local and an international scale, we stand a chance of having some optimistic stories to tell about Australian television in 2017.