The new media industry

The new media industry

The writers guide chapter 2

By Jennifer Wilson

Before we go too far, let’s take a look at the digital world as a whole, cover some of the history, developments and services most relevant for writers, and take a look at a few Australian companies in this space. This chapter provides an overview of the new media industry landscape and a foundation upon which writers can build as they launch themselves into cyberspace. Regardless of how you want your content to work in the digital space – as a stand-alone product, a game or linked to a product published elsewhere – you need to know the basics of the digital industry as a whole. The information and resources provided here are designed for writers in Australia and internationally and, as in each section of this book, links to articles, podcasts and websites are provided online at [http://del.icio.us/WritersGuide/].

If you’ve got a great script, great game, great adventure or just a great story that you want to tell, it’s relatively straightforward – get some money and build, make or create it. Mind you, if you want to make a living from your writing , that’s a different thing altogether.

Industry overview: what is the industry?

Sit back vs lean forward
Any definition of the digital content industry is doomed from the start by setting boundaries, which limit the market. With digital film, digital TV and digital radio all in common use, the fact that the content is created or delivered digitally is no longer sufficient to define it as ‘digital content’. The definition needs to look to the manner in which content is consumed such as via the Internet, mobile phone, game terminal or DVD. Simplistically, content can be divided into linear content (also called ‘heritage’), which we sit back and consume, or content that we lean forward and engage with, such as via the Internet or in a game.

In terms of sit back media, we cannot control the linear flow of what is being delivered, so we sit back and passively let someone else (the programmer) decide what to tell us and in what order. TV, movies and books all follow this model – a linear sequence delivered in a specific manner. In contrast, lean forward media allows us to dictate the flow of the narrative, control the direction of the story and drill down or move in different directions through the content. These definitions do not successfully deal with content such as serialised drama sent via SMS or MMS to your mobile phone (which you cannot control or interact with), but the majority of digital content tends to be more of a ‘lean forward’ experience than a ‘sit back’ one.

Key digital content is that which is accessed via the Internet, dedicated gaming devices or mobile phones and these are the industries, which we will look at in more depth.
The Internet industry

The Internet, as in computers connecting to each other, has been around since the early 1970s, but its use was mainly for education, government and defence purposes. For an interesting history of the Internet (based on the personalities involved rather than just the facts) [http://www.netvalley.com/intval/07262/main.htm?sdf=1]. It was the development and open release of the World Wide Web in 1992 and particularly HTML (Hypertext Markup Language – the format language for web pages) that provided the conditions through which the Internet became an open, mass-market source.

Marshall McLuhan stated in 1964 that ‘a characteristic of every medium is that its content is always another medium’. In the same way that early television was ‘radio with pictures’, so the first Internet sites were effectively online magazines with TV-like video segments – a feature still common for most portal sites. Since then the Internet has expanded to include online commerce sites as extensions of existing businesses (‘clicks and mortar’); brand sites (company information online); online-only retailers (such as Amazon); and directories and guides.

More recently, we’ve seen the creation of ‘Internet native’ services, which don’t always have a real-world equivalent. These include search, webmail, social networking and social media (tagging) sites; user-generated content sites (YouTube, PhotoBucket, blogs, etc.); and even complete alternate worlds (Second Life, Lively, etc).

The Internet has several social roles:

  • as a key media source – providing information, entertainment, text, images and video
  • to store pictures (Flickr, PhotoBucket), videos (YouTube), life stories (Blogger, WordPress), lists of things we like (del.icio.us, dig, StumbleUpon), even documents (Google Docs) and lists of tasks (Remember the Milk)
  • to communicate with those far away (email, Skype, MSN)
  • to maintain social connectedness (MySpace, Facebook, Bebo)
  • as the biggest and most frequently accessed research tool (Google, Wikipedia, WhitePages).

For many people the Internet is dominated by portal sites, which provide entry into a vast range of content (often referred to as broad and shallow). The number of pages of content created by these sites is massive – ninemsn has over four million pages and Yahoo!7 has about nine million. Most major online portals that provide digital content, such as BigPond, ninemsn and Yahoo!7, regardless of their initial business model, now consider themselves media companies in the new media industry. For writers, this means that the idea of ‘media’ is changing and that ‘publishers’ in the digital space are often companies seeking to control their content as well as produce and license content from other producers. What they seek to ‘publish’ includes video, information, guides, gossip, fact, documentary and, occasionally, narrative. In addition to the ‘broad but not-so-deep’ portal sites, there are also deep, rich sites of digital content from existing publishers such as ABC, News Ltd and Fairfax.

Key developments in the global digital content industry

One of the first internet developments relevant to writers was the effective, but surprising domination of the (online) bookselling market by Amazon. Suddenly writers, or at least, books, were big business online – something the bricks and mortar booksellers (Barnes and Noble, Angus and Robertson, Borders, etc.)  had failed to see coming. Amazon created a brilliant system, being able to buy books as required (based upon demand) without needing to store books for display purposes. Key to Amazon’s success was solving the problems of warehousing and distribution, allowing them to compete against the main street resellers. The traditional retail book stores distribution system was now  at a disadvantage as their online rivals only needed to hold stock when required to fulfil existing orders. Additionally, Amazon’s move to capitalise on the information provided by users, including book reviews, ratings and recommendations, kept them ahead of their more traditional competitors. Interestingly, the success of Amazon  appears to have benefitted the book market as a whole, with all of their traditional bricks and mortar competitors  reporting increased sales over the last eight years [http://www.fonerbooks.com/booksale.htm].

In 2005, YouTube sparked an Internet video revolution with a site that enabled the easy uploading and sharing of video content, much as Flickr and PhotoBucket had allowed photo sharing. Content on YouTube quickly grew, with both amateurs and professionals realising there was a hunger for entertainment and video content. With no copyright protection in place, many of the major video owners remained suspicious, however the ‘open’ nature of YouTube resulted in a huge variety of content being uploaded to it (current estimates are around ten hours of video being uploaded every minute – equivalent to more than 11 years of content being added each week!) [http://www.telegraph.co.uk/connected/main.jhtml?xml=/connected/2008/05/27/dlgoog127.xml].

It’s also estimated that only about 25% of the content on YouTube is ‘amateur’, the rest either professional content uploaded by users (clips of TV shows or movies) or made by professionals to attract a more user-generated contenttype market. One of these, Lonelygirl15 [www.youtube.com/user/lonelygirl15] created a huge uproar (and an increase in audience) when its professional nature was made public. The creators were then contracted by the social network service Bebo to create KateModern – bringing a form of TV (video) to social networking services. Lonelygirl15 has the (dubious) accolade of also being the first Internet series to introduce product integration (product placement) when the episode ‘Truckstop Reunion’ featured the characters eating and displaying Hershey’s Ice Breakers Sours Gum. Additionally, content created on YouTube has, on occasion, spawned TV shows or started TV careers for vloggers (for example Chris Crocker: [http://en.wikipedia.org/wiki/Chris_Crocker_(Internet_celebrity]). YouTube was purchased by Google in late 2006 and, as a result of parents with deeper pockets, is now more active in its attempts to reduce copyright infringements for fear of reprisals.

The publishing and book industry is now seeing the value of the Internet not just as a distribution and sales channel for printed books, but also for digital books (e-books) and increasingly for new formats not seen before such as collaborative writing. The blogging revolution has highlighted a huge appetite for online writing, and users will consume text in many formats, and, in many cases, will want to interact, edit or mash up the content in some way. Interest in e-books is growing as people look to consume digital versions of the printed work, the printed word itself going digital as ‘consumer initiated publishing’ such as print on demand (PoD –printing a physical version of a book upon request) becomes a reality. Books can be ordered online, printed and delivered for roughly the same price as purchase from a bookshop, but for the reseller there are no overheads in carrying (or storing) the physical stock. Whether or not it is due to Amazon or simply our continuing attachment to the physical form, books are the most bought object on the Internet, with 41% of Internet users buying one in the last three months [http://www.webpronews.com/topnews/2008/01/28/books-most-purchased-item-online].

So far, business models other than the selling of books online are few and far between. However, it is apparent that major trade publishers are prepared to invest in publishing new formats such as collaboratively written works published online only, works printed on demand (and therefore always up to date), and single chapters available as teasers. See the interview with Anna Maguire from Random House at the end of this chapter for one publisher’s take on this.

Penguin UK has taken two innovative steps in this market: in March 2008 it agreed to offer free PDF downloads of the first chapter of every fiction title it publishes; secondly, it launched a new digital fiction project – We Tell Stories: Six authors. Six stories. Six weeks., [http://wetellstories.co.uk/] We Tell Stories, done collaboratively with fêted alternate reality game designers ‘Six to Start’ [http://www.sixtostart.com/], will see six Penguin authors create six stories for an online audience over a six week period. Readers are invited to search for clues within the innovative tales, which will lead them to a seventh story hidden somewhere on the Internet. Penguin UK has challenged some of its top authors, including Man Booker-short listed Mohsin Hamid, bestselling author Nicci French and popular teen fiction author Kevin Brooks to create new forms of story – designed especially for the Internet. See [http://www.thebookseller.com/news/55291-alternate-reality-game-from-penguin.html ].

While these forays into the digital space are currently delivering more in terms of PR than sustainable business, major publishers in Australia such as Random House, Scholastic and Penguin, as well as independent publishers like Allen & Unwin are all looking for business models to underpin future growth as they address the changing consumption patterns of readers (and go digital). Indeed, Penguin’s online release of the first chapter of each fiction title follows a six-month, more limited trial as they tested this market. Sensibly, Penguin UK extends downloads to smart mobile devices (iPhone, Backberrys and Palms). This online presentation by Elizabeth Weiss of Allen & Unwin elaborates on the current issues faced by publishers: [http://www.australiacouncil.gov.au/the_arts/projects/about_story_of_the_future/events/digital_publishing_seminar].

The market is created by those who spend money marketing the e-readers. You have to spend money on launching them, getting the price right, the in-store training, demos and customer support. To launch a consumer electronic device is a major thing: you need a big manufacturer to get involved. Sony’s continuous commitment to the market is very welcome by us.

Fionnuala Duggan, Director of Random House Group Digital, UK, 1997

The link of the supply of digital content to a digital device has proven to be the ‘killer combination’ for both parts of the equation. Apple proved this through providing a good online music store (iTunes) at the same time as they launched the iPod, resulting in their domination of the digital music market, despite being a late entrant. In the same way, it is hoped that Amazon’s launch of Kindle and more recently in Australia, Dymock’s release of the iLiad, may kick-start the nascent e-book industry. Amazon already has 147,000 e-books available for Kindle, and the iLiad, both a reader and a writer that lets you transfer notes back to your computer, has 95,000 digital books available. The launch of these e-book readers in late 2007 saw a 25% increase in the sales of e-books in the US in the first quarter of 2008 and this trend is expected to continue [http://www.openebook.org/doc_library/industrystats.htm]. As Apple has added new content (Pixar short films, audio books and more recently, iPhone applications) to iTunes, the addition of e-books to the iTunes store will likely herald a ‘coming of age’ for these formats.

Key players in the Australian Internet industry

This list is not designed to be exhaustive, but all of the companies below are Australian, very active and dominant in the Australian Internet industry. Indeed, the Internet Advertising Board (IAB) was founded by Fairfax Digital, News Interactive, ninemsn, Yahoo!7, Sensis and Google. Each of these companies has large numbers of staff focused on ‘writing’ specifically for the digital content industry. While most use journalists, some companies have creative writers (designed to attract new audiences), some have small games development teams and many commission digital content (notably ABC2) to help deliver audience.

Ninemsn: Largest Internet portal in Australia. Joint venture between Microsoft Networks (providing tools such as MSN Messenger, Hotmail and Spaces) and PBL Media (Channel 9, ACP Magazines). Provides original online content as well as brand support (magazines, TV program) content.

BigPond: Telstra owned company. Started out as an Internet service provider (connectivity) and is still the largest in Australia, now re-branded as a media company. Provides video, news, entertainment, music and downloadable services. Aims to provide convergent services across both online (Internet) and mobile phones.

Sensis:  Another Telstra owned company. It mainly focuses on search and directories and  includes Sensis (search), WhereIs (maps and local information), WhitePages, YellowPages, Trading Post and CitySearch. Sensis also has an advertising arm that provides the online sales for BigPond, Telstra and some non-Telstra customers.

Yahoo!7: Joint venture between Yahoo! and Channel 7 (includes Pacific Publications magazines) – similar to ninemsn.

Fairfax Digital:
The digital division of Fairfax Media. Apart from digital versions of newspapers (Sydney Morning Herald, Age, Financial Review) offers digital guides (Drive, Domain), transactions (Stayz, RSVP) and has recently moved to digital-only news sites (Brisbane and Perth) and demographic-focused sites (Vine, Essential Baby).

News Ltd: Similar to Fairfax, responsible for the digital versions of news mastheads (Daily Telegraph, Herald Sun, Adelaide Advertiser, Brisbane Courier, etc.), news classifieds (online classifieds – cars, real estate, etc). Very active in the mobile space mainly across their own titles and services.

ABC: ABC TV content, news – extensive local services. Also additional children’s focused services outside of programs, including user-generated content services (Rollermache). Currently have a new Internet TV player product (iView) and in their digital channel (ABC2) commissions new media content.

Making the Internet your own

Search, The Long Tail, Tagging, Discovery and Filtering
As the Internet has grown, some important concepts have developed that relate to how audiences discover and consume content. In looking to find and engage an audience, an understanding of these is important as the structure of the content offered needs to incorporate these concepts. The section on Marketing & distribution  explains in greater detail how some of these concepts work to secure audience and distribution for content. These concepts are:

Search: While most sites on the Internet assume users will come in via their home page (or front door), in reality, search allows the whole Internet to be indexed, with users landing on any page within a site as a result of a link from a search request. This makes Search Engine Optimisation (SEO – making the site easily found, but also adding relevant words to assist in the resultant page rank) critical. Additionally, it is important to think about the experience users might get when they first find you via a page other than the home page. For more information on SEO see [http://bigmarketing.wordpress.com/2006/09/26/seo-for-dummies-demystifying-optimization/].

The Long Tail: This term was first coined by Chris Anderson in an article in Wired magazine in 2004 to describe the niche strategy of particularly online businesses, such as Amazon or Netflix, that sell a large number of unique items in relatively small quantities. Simply put, The Long Tail is based on the idea that while the most popular products will have a ready market, there is a niche market for almost any product. In the case of Amazon, a significant portion of sales are obscure books not available in brick-and-mortar stores. The Long Tail is a potential market and the distribution and sales channel opportunities created by the Internet can enable businesses (or producers) to find and then tap that market.

The tail is bigger and longer in new markets (such as online bookstores)
Tagging: When we read a book and like specific sentences or pages, we sometimes mark them or put a tag in the book so we can find them easily. Tagging sites such as Del.icio.us, Digg, StumbleUpon and Technorati allow us to do the same with websites, the big difference being these can be made public and shared. Most tagging sites aggregate the tagged articles, providing a quick way of seeing what people are stirred up about. Making it easy to tag your site, your content or your story can help you be discovered by people who might not otherwise find you.

Discovery and Filtering: Basically, we all know that search engines can be ineffective in finding what you really want. Seven million Google results may be impressive, but people rarely go past the first ten or so. As a result, we are increasingly reliant on peer groups (friends, social networks, etc.) to do the filtering for us by recommending what or where we should go. Similarly, we also use these groups for discovering new things we might not otherwise find. Generating ways to encourage these peer communities to talk about your site or recommend you is a good way of being discovered amidst all the noise on the Internet. More discussion on discovery and filtering can be found in the chapter on Marketing and distribution.

The Internet has a variety of uses for writers, depending on their focus.  It is also important to remember that the Internet has the ability to be interactive and does not necessarily have to be used on a PC:

For those creating original digital content the Internet is the prime creation and consumption tool. Even if your content is targeted at mobile phones it may be the mobile Internet you are developing for. Even if this is not the case, your market will be Internet connected and you will need a presence (so you can be ‘discovered’).
For those seeking to take content from another medium (TV, radio, print, etc.) to the digital space, it is likely that your original content is already ‘digital’ and a website can give you a virtually instant ‘home’ for your content. Where your story is an extension of another medium the Internet provides a rich means for interacting and engaging with your audience – and even fulfilling their demand for a copy of your original work.

For those looking to use the Internet to promote their work there are hundreds of different communities online and the Internet is a good way for them to find you – by being where they are.

The Internet for writers

The Internet offers great tools for writers, digital or otherwise, including things like bkkeeper [http://www.bkkeepr.com/] which tracks your reading and bookmarks at the same time, and, more importantly, BookAlert [http://www.mcqn.com/booklert/] which will keep track of your book’s Amazon rankings and send you regular emails or even Twitter messages of your current rank (you set the frequency) – so you can watch your rank soar as your book becomes a bestseller.

It is important to remember that users are selective, but will pay for what they want. One of the key Internet sites for writers is the print on demand site: [www.lulu.com]. Lulu provides the self-publishing elements required to let you upload content and images, format, save, set your price and sell the finished product. They print and ship each book as it is ordered and return to you 80% of the revenue received. The site can provide you with an ISBN for your book, hosts blogs and forums and is a rich and vibrant community that talks books and writing.

The games industry

Well before the Internet, there were games. These ‘arcade games’ existed in places like TimeZone and IntenCity, and featured racing cars, shoot-‘em-ups and, when digital started to happen, tabletop games like Pong, Pacman and Space Invaders. These games (the arcades) are still around, but gaming has emerged from the costly ‘big box’, to dedicated gaming units (Xbox 360, Nintendo Wii, PlayStation), handheld dedicated units (PlayStation Portable2, Nintendo DS and Game Boy), the personal computer (from stand-alone games such as Grand Theft Auto, SimCity and Myst; through Internet-connected games like Massive Multiplayer Online Role Playing Games (MMORPG) such as Eve Online, World of Warcraft and Habbo Hotel) and the mobile phone – which, similar to the computer, are morphing from stand-alone games to connected games and even some slimmed-down version of MMORPGs.

Games are the fastest growing segment of the entertainment industry (around a 24% increase each year – roughly doubling in the last four years). Despite common assumptions, more adults play games (25%) than teenagers (11%), but certainly the amount of time spent is higher in the younger age brackets, possibly due to time available. Globally, the games industry is estimated to be worth roughly A$24 billion with the Australian component generating approximately A$110 million per annum and directly employing over 1,500 people [http://www.gdaa.com.au/docs/GDAA_Industry_Profile_Report_221106.pdf].

While the global games industry is dominated by major companies such as Sony, Electronic Arts and Vivendi Universal, the Australian games industry has a well-earned reputation for quality and its representative industry body is the Game Developers’ Association of Australia [http://www.gdaa.com.au/]. Highly regarded Australian games include Dark Reign from Auran, Jurassic Park from Blue Tongue and Sin City – based on the comic and subsequent movie of the same name. More titles can be found at: [http://en.wikipedia.org/wiki/Category:Video_games_developed_in_Australia].

Even when a game is developed as an extension to other content forms (Matrix, Harry Potter and Jurassic Park, for example), there remains a high percentage of original creativity in constructing the game-lead, narrative, environment and story extensions. That said, games have one of the highest original content creation levels – where original ideas are developed into games not linked to other digital media forms. In some cases, games are the original concept that are then migrated to a new mediums – Super Mario Bros, Lara Croft, Doom and the 11 Pokémon films are testament to the quality of the narrative, characterisation and storyline in the games.

The amount of original narrative content in games is higher than for any other sector of the industry, but the lead time for very rich games is long – from about nine months for a good quality game up to about four years for a richly detailed game such as Halo. The most compelling games such as Grand Theft Auto are both plot and character driven, offering an extensive level of interaction at different layers and with different characters. Simple plot-based games can be developed at a relatively low cost, but the higher the quality, the more expensive. Final Fantasy 7 is estimated to have cost US$40 million to make, before promotion and advertising – thus requiring a strong business case to justify such a spend.

Games devices (formats)

The industry is compounded by different types of game machines and the corresponding formats that are required to make the games work. On the whole, each dedicated game machine such as Nintendo, Wii, PlayStation or Xbox require different formats and different navigation options for the player. As a result, games are easier and quicker to develop for the online (PC) market, which while broader, has less dedicated game players. The exceptions here are MMORPGs, which require an Internet connection and therefore began life on PCs. As dedicated game devices such as Wii, PlayStation and Xbox become wi-fi, we are likely to see MMORPGs move into this arena too.

More recently, there has been an increase in mobile phones as non-dedicated game playing devices. Nokia sought to create a converged game device/mobile phone through their N-Gage device, which was a mobile phone with dedicated keys for game playing much like a GameBoy. The hybrid product was not a huge success largely due to the keys not being extensive enough for dedicated gaming but equally not so suitable for use as a mobile phone. N-Gage has now migrated to become the game engine application for Nokia Smart Phones, with approximately 25 titles available.

The games industry’s main business model to date has been through sales of the game (transactions). However, games are exploring new business models such as free games with payment for additional levels (freemium or the ‘free then fee’ model); games with payment for specific skills or assets (Habbo Hotel, Adventure Quest and Entropia Universe); subscriptions for access (common for MMORPGs including World of Warcraft, Eve Online and Runescape); and in-game advertising. In-game advertising can be static (hard-coded into the game) or dynamic (updated over the Internet) and is a growing business model, expected to exceed $1 billion by 2010. 

The mobile industry

Mobile formats

The mobile content industry remains the youngest of the key digital content environments, moving beyond simply a communication device only in the last five years. Mobile digital content has mimicked that on the Internet and we are likely to see the development of different services and content for the mobile phone as the market matures. Developments are likely to take into account the locative nature of the mobile phone, the personal nature of the relationship we have with it, and native communication elements.

In terms of mobile, the book industry is lagging, although there are some interesting developments – notably in Japan where it was reported in 2007 that half the top selling books were written on mobile phones. One book sold over 1.2 million hard copies and perhaps even more than that in the form of mobile downloads [http://www.techcrunch.com/2007/12/02/in-japan-half-the-top-selling-books-are-written-on-mobile-phones/]. Reading on mobile phones is also popular, with many books, called ‘keitai’ or ‘mobile phone’, written specifically for this consumption method. Deep Love is the best selling keitai book in Japan. In relatively typical fashion, its scandalised story deploys teenage prostitution using erotic and violent situations that contribute to its captivating plot. Success in the mobile phone version has made it a natural for turning into a film, a television series and also a manga comic given the highly visual short, sharp, shot’ .nature of the story.

In Europe, over 20,000 titles are available as mobile books through [www.mobilebooks.org]. There are also mobile phone book readers, some in the form of applications for smart phones and many as books available for consumption via WAP (wireless application protocol – the HTML-equivalent for early version mobile phones). Australia is not far behind: in 2003, HarperCollins Australia released a MobileReader, an application downloaded to your mobile phone to which they would then send chapters of books. More recently, this reader has been updated to allow you to‘Browse Inside’  where a  digital experience replicates that  of browsing the pages of a book prior to purchasing – even on your mobile phone. The site includes a link to Dymocks to purchase the book.

Games on mobile phones remain the most commonly purchased content. Many are now in the form of full character-driven games such as Doom RPG and Assassin’s Creed which are slimmed down from their online/PC/games unit version to fit the mobile handset. The failure of the N-Gage has resulted in ‘dedicated device’ games not moving to mobile with the same force, however the PC versions of these are migrating successfully to highly Internet-capable handsets. As an example, Crash Bandicoot and Super Mario Bros have been released on the iPhone.

The iPhone is also being used for collaborative fiction development in a variety of forms, similar to ‘We Tell Stories’, including one through the Twitter (short message service) mobile interface called ‘twittories’ [http://twittories.wikispaces.com/] where each ‘author’ adds a single Twitter message (up to 140 characters long) and once the story has 140 lines – it ends. While the initiatives in Japan are unlikely to play out in Australia in the same manner, we do have other writers of fiction on mobile and ‘portable media’ festivals which include mobile films and mobile stories.

Mobile delivery

The Australian mobile industry is dominated by mobile carriers, who are the major providers of content – each to their own consumer base within what is referred to as a ‘walled garden’ (content selected and supplied by the carrier with the consumer encouraged, or in some cases restricted, to using only this content and not seeing content more broadly for themselves).

Recently, there has been a shift in the mobile content and services market to what is referred to as ‘off-deck’ services. This is the development, by a mobile content company, of services, which can be accessed by any mobile phone on any network using the equivalent of a mobile URL. However, the fact that billing on the mobile phone is predominately (and most acceptably) done by the carrier, means that off-deck services need to consider alternative business models.

Where content or services within a carrier’s ‘deck’ are provided by an external company (rather than the carrier themselves), revenue is collected by the carriers then split between the carrier and the content provider. The forms of charging include a one-off service charge (e.g. buying a video or article); ‘package’ charging (a single fee for a number of transactions); or subscription charges (for access over a period of time). When providing services off-deck, outside the carrier’s own portal, it is not normally possible to use the carrier to collect money or your behalf and the industry is now looking at alternatives such as advertising (popular), one-off charging through premium rate SMS or the possibility of subscription through an alternative payment such as PayPal or credit card.

When delivering rich content to consumers off-deck, two key considerations are: the data charges paid by the consumer for accessing your content and how you will generate revenue. There is a move in data charges levied by carriers, with mobile data plans now in the gigabyte range at reasonable costs – a trend that needs to continue to ensure the data charge element of mobile content becomes as irrelevant as data costs in wired Internet. Business models that might help generate revenue are investigated in more detail in other chapters. It is important to bear in mind that whomever you use to handle money on your behalf (PayPal, credit card or mobile carrier through some form of premium charging), you will pay them a percentage of your revenue, from about 3% at the low end (credit cards, PayPal) to as much as 50% (mobile carriers).

Market analysis: what is the market made up of?

The changing nature of the market

Key to the development of the new media industry has been the growing technical competence of consumers, often resulting in older citizens being left behind as a consequence of being less technically comfortable with the Internet and new media. Not surprisingly, it was ‘geeks’ who first engaged with digital content, both on the Internet and subsequently, mobile phones. This quickly spread to the technically savvy, on to the well (technically) connected and then the broader market.

Market segmentation (demographics)

The majority of digital content is consumed by people aged between 15 and 45, with different types of content dominating different age groups. Text- and video-based news and information content are strongest in the older (30+) group, with entertainment coming a close second; while entertainment content is far and away the most sought after content in the younger (15–30) bracket.

Key to the market is a well connected, tech savvy demographic – often referred to as ‘Generation C’. This highly connected, community dominated, celebrity aware, content savvy generation (the ‘C’ referring to any or all of those descriptors) is influenced by peer networks (community). And their advanced word-of-mouth sharing techniques, mainly through social network services or instant messaging systems, move at a rapid rate. Appealing to this group is a key to success in the engaged youth demographic. (See references, notably Communities Dominate Brands.)

Consumers themselves are also content creators. Alan Toffler in The Third Wave (1981) first referred to this group as ‘prosumers’ a combination of the words ‘producer’ and ‘consumer’. The three roles can be differentiated as follows:

Consumers: those who read, seek out and consume content (also called ‘lurkers’)
Prosumers: those who, in addition to reading, participate through rating, adding comments to the blog, forwarding blogs and  reviewing blogs written by others
Producers: those who actively create original content, initiate sites, make videos, blog and post, seeking to have their productions consumed and interacted with by the above two groups. Thers are the real creators of user-generated content.

The assumed ratio is often quoted as 90:9:1, but more recently as participation levels have increased the ratio is approaching 80:15:5. Interesting, in some countries (notably China), a better summary of this ratio would be 40:40:20 – with the majority of Internet users actively contributing in some manner. Some statistics point to over 60% of Chinese Internet users having started a blog at some point (almost half on mobile phones).

Empowered consumers

The changing nature of technology and devices, along with a move from sit back to lean forward media is also impacting television viewing habits. Devices such as Foxtel IQ™ and TiVo™ as well as numerous brands of digital video recorders (DVR) are letting us record television and play it back as and when we want – frequently skipping the ads. Australians are now more inclined to watch television on the Internet (58%) than ever before, assisted by services such as YouTube, Joost [http://www.joost.com] and the male-targeted Heavy [http://www.heavy.com].

TV is also moving to the mobile phone – with three forms being provided: standard TV streamed to the mobile phone under a method referred to as DVB-H (Digital Video Broadcast – Handheld. Standard digital broadcast TV is referred to as DVB-T, where ‘T’ stands for ‘Terrestrial’.); looped TV channels delivered over the standard (3G) phone network (e.g. Foxtel by Mobile, and Mobile TV on Three) and video on demand services (including Mobile BigPond TV and Vodafone’s TV on Demand). Interestingly, a UK report found that of those who watched TV on their mobile (26% of the survey group), 32% changed their TV viewing habits as a result, with 4% substituting standard TV with that on their mobile (IBM ‘End of Advertising’ Report August 2007).

While current TV viewing habits of Australians reflect a society still enthral to traditional ‘when we serve it’ as opposed to ‘when you want it’ broadcasting, this is changing both through the increased availability and attraction of DVR devices. A recent report on Australian television viewing habits has identified we now spend more time online that we do watching television – 13.7 hours per week online as opposed to 13.3 hours watching television (Nielsen Online March, 2008. [http://www.netratings.com/pr/pr_080318_AU.pdf]. Further research identified a group referred to as ‘heavy’ Internet users (8+ times per week) mainly aged 14–24 years (1.332 million people or 7.8% of all Australians aged 14 years and over), who spend more time online than they do watching TV – 22.8 hours online versus 15.5 hours watching TV See [http://www.roymorgan.com/news/internet-releases/2008/734/].

Australia in the global context

The digital economy

The size of the global digital economy is best determined by the amount of access people have to it. At the end of June 2008, the number of users worldwide was placed at 1.458 billion – or just under 22% of the global population (6.676 billion). While Greenland tops the league in percentage terms (92.3%), in terms of sheer numbers China on 253 million people beats the US on 220 million. Australian estimates of Internet users are over 16.3m  or about 79.4% of the population – a very credible and notable community , despite our small size [http://www.internetworldstats.com/].

Our stable economy, thriving business environment and English language all combine to position Australia as a good place to do business. While global conditions such as the relative strength of the Australian dollar may impact this standing, we are building up a good reputation as a place for North Americans and Europeans to do business, particularly in the film and games industries. In terms of the Internet, Australia is an important market for all key Internet players, and many services are tested and trialled here before being rolled out in other jurisdictions. The MSN joint venture with Publishing and Broadcasting Limited, which formed ninemsn is one of the most successful MSN sites globally. TiVo, a US company who have expanded to the UK, has entered an agreement with 7 to make Australia their next market.

Australia’s importance differs depending on the digital industry. While, the world-wide Internet sphere may be dominated by the US, in terms of mobile phones, Asia (notably Japan and Korea) and Western Europe dominate, with Australia/New Zealand being a much more advanced market than the US (with the exception of iPhone development). While Asia is often held up as a model for mobile technologies, cultural differences and significantly lower home Internet penetration make this market quite dissimilar to that in the rest of the developed world. The success of keitai or Japanese mobile phone books is unlikely to be replicated outside of this region due to those differences.

Some Australian companies have become major mobile players including Jumbuck – the largest provider of chat services to mobile carriers globally (and provider of a Habbo Hotel styled mobile phone environment); Mig33 – a huge player in the SMS equivalent of Voice of IP (VoIP) services, where unlimited SMS messages can be cheaply sent at a monthly fixed price using a data plan rather than paying on a SMS-by-SMS basis; and BluePulse who provide a content- and information-based community service and have recently moved to the US to further their expansion. As mentioned earlier in this chapter, the Australian games industry is well regarded for the quality of our games.

Learning more: study and professional development

Building on your idea

Some courses that will help you develop your craft skills are listed in the Craft chapter [LINK] and those that will help you develop your business skills are listed in the business sections of the DIY chapters [LINK}. This section will look at how you can find out more about the digital industry in Australia.

The digital content industry is represented, at an industry level, by the Australian Interactive and Multimedia Industry Association (AIMIA) [http://www.aimia.com.au/]. AIMIA have a Mobile Industry Group to promote mobile content and services and an intern program to foster skills in the mobile space. AIMIA also runs several relevant events, including a recent conference on ‘The Business of Digital Content’ which looked at the market and business issues of small companies right through to major online publishers. AIMIA regularly runs short session to look at development in the digital space, as well as full length conferences often focussed on the business of digital content and is an excellent resource with chapters in most states.

The Games Developers Association of Australia [http://www.gdaa.com.au/] is the industry body for games developers and can assist with information on the industry, how to get started and career pathways. The website also has a range of video interviews with practitioners.

Initiatives focussing on the business of online and digital content are conducted by the Australian Film, Television and Radio School (AFTRS) who have a specific unit – the Centre for Screen Business (CSB) – to promote the development of business knowledge and skills in the screen content industries. CSB runs both short and diploma courses looking at business models, business planning and general commercial issues. While the centre has a strong focus on screen (film, TV, online and mobile), their work on the business of digital content is relevant across disciplines [http://csb.aftrs.edu.au/].

The Mobile Enterprise Growth Alliance (MEGA) is a workshop lab within which to develop ideas for mobile content and applications under the direct supervision of Australia’s leading industry experts before they are pitched to a panel of investors. Supported by private enterprise, education and government, and run in South Australia, Victoria and New South Wales, MEGA provided a series of workshops that covered market analysis, making the business case, feasibility testing, business plans and finally pitching, While MEGA has concluded for 2008, it is likely to run again in 2009 and the website continues to provide excellent resources, with some of Australia’s premier mobile business people presenting and mentoring groups.

From a business perspective, it is always worth considering mentoring. Organisations such as Digital Crossroads: [http://www.digitalcrossroads.com.au/entrepeneur_mentoring.php] provide mentoring for young (or new) entrepreneurs, while many of the mainstream advisory firms (KPMG, Cap Gemini and Accenture amongst them) have ‘Innovation’ divisions which look to support and mentor new businesses. These companies will help with business planning, feasibility, investment advice and personal advising to help develop business skills In addition to mentors, many of the production schools across Australia that help further craft (production) skills also offer courses in business and commercialisation of products.

> The new media industry references

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The writer's guide to making a digital living: choose your own adventure by Fingleton, T. Dena, C. & Wilson, J. for the Australia Council for the Arts is licensed under a Creative Commons Attribution-Non-Commercial-Share Alike 2.5 Australia License. For permissions beyond the scope of this license contact http://www.australiacouncil.gov.au/about_us/contact_us.