MocoInterview: Tom Kennedy, Chairman of the Digital Content Industry Action Agenda, Australia

MocoInterview: Tom Kennedy, Chairman of the Digital Content Industry Action Agenda

Tom Kennedy[by James Pearce] Tom Kennedy, CEO of MediaZoo, is also the chairman of the Australian Digital Content Industry Action Agenda, “an industry-led and Government-supported initiative. Its purpose is to ensure that the digital content industry in Australia reaches its full potential and stays competitive in the global economy.” On the March 13th the report — Unlocking the Potential — was released.

I spoke with Tom about the report, and what the digital content industry needs to flourish. Some of the points are specific to Australia, but many are valid for any market — especially those wanting to export to larger markets internationally.
“Investment is the biggest barrier (to growth in the industry),” according to Tom. “How we attract investment in the sector, in innovation and content, some of that is tax driven, some is policy driven, some is just being able to better articulate the benefits and the growth potential.” Attracting sufficient investment is a problem in most markets, and sometimes the problem stems from legacy regulations and programs. For example, in Australia there are anomalies in tax treatment for analogue content versus digital content, creating inhibitions for the digital industry. There are also subsidies and grants for content that are unavailable to producers of digital content.

One of the things that interests me is how a country regulates digital content in relation to normal content, for example whether the local content standards that are so common in TV broadcasting should be applied to mobile content. The action group did not recommend introducing local content standards for digital content “because the digital content sector is still a sunrise sector, it’s still evolving, you don’t want to burden it with the same kind of production overheads yet — you may evolve to that over time,” said Tom. He said the group purposely stayed away from cultural arguments to focus on industry and economic outcomes such as jobs created and tax revenue generated, which is probably the best idea with the current Australian government. There is a common problem over which organizations will regulate digital and especially mobile content, the media regulator or the telecommunications regulator. Australia solved this by combining the two into the Australian Communications and Media Authority.

It’s important to have a strong domestic industry to export digital content, according to Tom. Although you can export digital content anywhere in the world on the internet (assuming you aren’t stymied by having to get the rights from a lot of third-parties), getting the business paradigm right is trickier, and “if you don’t have a strong domestic industry it’s pretty hard to export from a vacuum“. There are large competitors out there such as the US, UK, Canada and Asia pouring money into digital content and services which creates some very strong competition internationally.

“Also, this labour force is highly sought after and highly mobile, so it can move where the projects are and where the funding is fairly easily,” said Tom. This creates a problem Australia is familiar with, the so-called “brain drain”, and I’m pretty sure a lot of other nations are familiar with it also. “You can still produce this content from Australia and not necessarily have the value chain exist here.”

According to Tom the best thing that governments can do to promote the sector is provide investment certainty. “Especially in some of the new and emerging areas people want to know that the rules aren’t going to change in the middle.” As for the industry, it needs to work together to get the data and statistics to support its arguments.

Tom said that it is currently too expensive to produce content specifically for mobile, and TV stations moving into the space weren’t charging for the value of the content but rather minimizing the risk of loss. However distinctions in the medium used to view digital content would become irrelevant over time as consumers will want to transfer content across different devices and view it differently there, so digital rights management issues are very important, especially in terms of interoperability.

Another big issue in digital content is restricting viewers to a particular territory, which becomes a huge problem when dealing with international sporting events such as the Olympics or FIFA World Cup. Different companies are given the rights to show the content but only in a specific region or country — not a problem when the media was geographically controlled but with the internet it gets more difficult to restrict viewers to a particular territory. One of the benefits of the iTunes model is that it enforces territoriality. There are ways to control this, such as via IP address or checking a credit card or address, but it’s difficult to be foolproof.
We also talked about copyright issues in the digital age and the problem with Australia’s copyright laws, but since we talked that is in the process of being changed.

mp3logo1.gif You can download the audio of the interview here (2.56 MB, 22 mins).
Or you can stream it here … click on the arrow:

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