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EDITORIAL COMMENT ELSPETH TAVARES
The Digital Revolution
Entertainment & The Independents
A compilation of independent companies and content for worldwide multi-platform distribution
For the Independents the overall sketch below of the Companies behind the Internet plus reports from other organizations such as The Broadband Commision illustrate that Entertainment's Digital Revolution in the Digital Age is a vital component of the complexity that is the Global Digital Revolution. The most obvious elements for Independents in the Film and Television industry to consider are that the digital revolution has removed the gatekeepers to the crucial aspect of distribution, penetrated other layers such as producing films via crowd-funding, and as the Mobile Broadband increases it will give consumers who desire to 'transact' Content and entrepreneurs who make Content even more accessibility and connectivity worldwide.
The Art Form of Film is the Visual Communicator of the 21st century and it plays a crucial function within society because filmed entertainment is not only viewed for relaxation but can also be employed as means to advance democracy in its broadest concept. We saw this with the Arab Spring that began in December, 2010 and the growth of the Documetary genre. One could argue that the availability of unlocked access to distribution is a recognizable yard stick. Within the incubator of our filmed entertainment industry it is the Independents who push the boundaries of creativilty and innovation.
The digital revolution and technology have unlocked the structure that we are familar with and broken it down. With the speed at which technology advances, new structures that we have no control over are constantly being put into place. The savvy indepednent entrepreneur in any industry will watch and interpret the trends and absorb them into his/her own modus operandi.
What we do have Control over is how we use the Digital Revolution to run our film, television, and allied industry companies. From conversations with a number of people in different sectors of society for this TBOF feature, it becomes apparent that our greatest assets in this ever-evolving Internet world are our knowledge and reputation. Moreover, as Meyer Shwartzstein commented, "Film is Emotion".
Technology is speeding ahead at an alarming pace fuelled by the factors touched on below. The last two years have seen the Film and Television Industry change dramatically, and the Independent primarily by virtue of size is often slow to respond to change due to a number of factors. Cannes 2013, however, was a watershed year.
It is now evident that the dramatic change for both Film and Television is the rapid integration of VoD in its many forms driven by the companies we mention below. In May 2013, the Mavise database reported that, in Europe alone, there are more than 3,000 on-demand audiovisual services being established or received in at least one EU country. European Union VoD services that offer only or mainly cinema film number 447. More than 130 Film VoD services targeting one or more EU countries were established outside the EU, mainly in the United States and Switzerland. The database also lists 45 services offering compilations of trailers and 10 European archive services.
For the moment, the world traditionally measures a company's performance by its First, Second, Third and Fourth Quarter results. In the Global socio-economic structure of countries and their interconnectivity, society measures 'progress' by a five-year cycle, taking into consideration and including the Global economy's evolution, a country's GDP, the Global effects of working through any crisis in the three-cornered Global Village and its economies, the global movement of labor, and the creation of individiual and corporate wealth with the Stock Markets.
For its Feature in the printed innovative AFM 2013 QR Reader Magazine & Product and also available here Online, The Business of Film asked Executives of three different companies in the business of both Film and Television for more than fifteen years (15), who have the benefit of three cycles of knowledge and experience, to share their views on the advent of the technological revolution, which offers great opportunities and exciting challenges.
In today's Online Edition, Gene George – EVP Starz Worldwide, Meyer Shwarzstein – Brainstorm Media, and Scott Jones – President, Artist View Entertainment give their perspectives on their companies, how they view the future of the Film and Television business, and the impact of Entertainment's Digital Revolution.
The Global Companies Behind & At The Forefront Of The Internet
Ericsson - The Networked Society.
Ericsson, founded in 1876, is the leader in the communication technology business, and created the Networked Society for which it expounds its mission: "To be the Prime Driver in an all-communicating world. Our core values – respect, professionalism and perseverance – are the foundation of the Ericsson culture, guiding us in our daily work – how we relate to people and how we do business." The documentary films the company produces for the Networked Society series are laudible. While not self-serving in essence, they offer insight into the Global social engineering of the Digital Age in the context of its past and future.
The fourth film in the series, On The Money: Can ICT change how we define value and interact with money?, looks at money systems and how connectivity is creating a new game when it comes to trading – both in value and trust. In the film Kosta Peric a technologist, whose interests lie at the point of fusion between technology, finance and innovation, and who holds the post of Deputy Director of Financial Services for the Poor Initiative at the Bill & Melinda Gates Foundation, says: "We have digitized Pictures, Books, Music with MP3, Movies with MP4. Next will be money, reputation, identity and then ourselves." On his website he describes the film's context: "The movie shows deep disruptions to the real world brought by the parallel, networked digital world. It talks about different ways the technology is changing us – digital money (rather than cash), crowd sourcing as a way of investing (rather than the traditional exchanges), online value and trust and reputation (based on social network connections rather than real world credit ratings).
The Documentary film On The Money( 16mins) is a must for anyone interested in what is going on now and in the future. http://www.ericsson.com/news/131009-on-the-money_244129226_c
The Multinational Conglomerates Controlling The Global Footprint
At the core of the digital revolution is the Internet which is driven by multinational telecom and technology companies with tentacles that spread from statellites to the mobile devices we use everyday. Most of the top 10 Global telecom companies driving Internet interconnectivity worldwide are names we are not familiar with, such as NTT and Softbank (Japan), Deutshe Telecom (Germany), Telstra (Australia), Telfonica (Spain), América Móvil (Mexico), Vodaphone (London), Verizon & AT&T (USA), and China Mobile (China). These top telecom companies have a collective Market Value of US$956billion(bn), Revenues of US$814.1bn, and Profits of approx US$65bn, giving scope and context to the size and global worth of the Internet business.
Although they all have international subsidiaries in other countries, the geographical home bases of the companies are important, reflecting Global engineering alongside their Governments, the creation of jobs, Education, and a myriad of international social engineering all interconnected irrespective of the Cultural or Polictical diversity
of the West and The East.
The Consumer Interface & The Functions That Drive The Global Machine
The consumer interfaces directly with technology companies, the top names we are more familiar with being Apple Inc, Samsung, IBM, Microsoft, Hewlett Packard, Cisco, Google, Oracle, Hitachi, Dell, Toshiba, Panasonic, and Hon Hai Precision.
In Front and Behind the Camera, all these leading technology companies are at the forefront and driving the inner working of the Internet including: design and manufacture of devices, selling networking equipment; motherboard chipsets, network interface controllers and integrated circuits, flash memory, graphic chips, embedded processors and other devices related to communications and computing; products, technologies, software, solutions and services to the consumers; developing, manufacturing, licensing, and supporting a wide range of products and services predominantly related to computing; selling computer hardware and software, offering infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology; selling consumer electronics, computer software, and personal computers; the development and marketing of computer hardware systems and enterprise software products: tools for database development and systems of middle-tier software, enterprise resource planning software (ERP), customer relationship management software (CRM) and supply chain management (SCM) software; the support of computers and related products and services; and makers of electronic components. Apple's best-known hardware products are the Macintosh line of computers, the iPod, iPhone and the iPad. Google specializes in Internet search, cloud computing, and advertising technologies.
The above gives a simplified background to a complex bitmap that comprises the competitiveness of the Internet, the speed with which technology has grown to feed the infrastructure that underpins the digitization of our society, global social engineering by Governments and its GDP, and working with companies that have led and are leading society into the biggest revolution that outstrips all previous industrial revolutions. At present our society is only part-way into this phenomenon which has occurred in a very short space of time.
The issue of the Internet and its global growth is colossal and can be seen from a variety of angles and agendas. TBOF does not mean to imply that the sketch entirely covers the rapidly expanding technology universe, but rather that those who understand its scope are confident that knowledge and reputation play key roles in how we conduct business on the Internet just as they always have in real life.
According to The Broadband Commision Report 2012, information and communications technologies (ICT) have seen unprecedented expansion of information avaibable online. Digging further into the core is the establishment of affordable access to broadband networks, based on a multilingual approach. "We are moving towards a world with a multiplicity of devices, including new specialized devices in a pervasive "Internet of Things". With laptops shrinking in dimensions, and as smartphones gain in functionality, the space between smartphones, tablets and PCs is shrinking fast, while the gap between smartphones and basic feature phones is widening. Tablets remain a great enabler for broadband usage, as they are able to deliver more content via a larger screen. In reality, there is an important role for all of these different devices (smartphones, tablets, netbooks, PCs, and fixed devices), with people choosing the appropriate device for the task at hand – but they all need broadband."
From the same report: "There were 589 million fixed broadband subscriptions by the end of 2011 (most of which were located in the developed world), but nearly twice as many mobile broadband subscriptions at 1.09 billion. Of a stock of 5.97 billion mobile cellular subscriptions worldwide by the end of 2011, some 18.3% related to mobile broadband subscriptions. Nearly a third of all handsets shipped in 2011 were high-speed devices (IDC,)According to Ericsson, to date, mobile broadband subscriptions are growing by approximately 60% year-on-year and could reach around 5 billion in 2017. Worldwide, the total number of smartphones is expected to exceed 3 billion by 2017 (Ericsson, 2012), with the number of smartphones sold in Africa and the Middle East expected to increase four-fold from 29.7 million units sold in 2011 to 124.6 million by 2017.
Also highlighted in the report: Engineering of the global interconnectivity between East and West is the proposal of The Trans-Eurasian Information Super Highway Project (TASIM) which aims to improve the international Internet connectivity of central Eurasia and to establish a major new transit route between Europe (Frankfurt) and Asia (Hong-Kong). TASIM will provide a regional Tier 1 backbone network, improving the global topology for Tier 1 backbone networks. This international infrastructure project will improve connection speeds and reduce access costs, delivering long- term economic and social benefits for the whole region and remote, underdeveloped areas of Eurasia in particular. Developed countries will benefit through improved connectivity for their operating companies abroad, enabling effective provision of multimedia and cloud computing services to fast-growing Eurasian markets. Azerbaijan proposed the establishment of TASIM in November 2008. In December 2009, the 64th Session of the UN General Assembly adopted a Resolution on the Transnational Eurasian Information Super Highway (A/res/64/186). Major regional telecom operators, representing Azerbaijan, China, Kazakhstan, Russia, Turkey and the EU have been in talks on establishing a commercial TASIM consortium since 2010, with several milestone framework documents having been signed.
By the end of 2011, some 2.26 billion people were using the Internet, a figure which suggests that approximately a third of the world's population is now online. The Boston Consulting Group (BCG) predicts that global Internet users will reach 3 billion in 2016, significantly boosting the proportion to around 40%10. In the developing world, Internet penetration stood at 4% in 2011 and at just under 6% in the world's LDCs (Least developed country). At current growth rates, Internet user penetration is unlikely to achieve this target, and further impetus is required to achieve it. The question is whether mobile broadband will deliver the extra growth in access that is needed.
This interconnectivity is as well a source of practical means for developing countries, such as the 9 miillon mobile users in Uganda who have grown their economic infrastucture by using Mobile money. With mobile phones, the need for entertainment content grows exponentially and mobile broadband enables the consumer to choose what he wants, when and where he wants. The key to the end game of total immersion of the Internet lies with Mobile Broadband, which is not fully deveolped globally.
Information available from the latest Ericsson report states: "There are as many as 754 million mobile subscriptions in Africa. The ICT revolution has not only transformed the way people live, it is the driving force for economic development in the world today."
It is easy to see how this will impact future needs across Africa for Content in its many forms providing not only Education and financial services, but also Entertainment from Sports to Feature Films. The report went on to emphasize: "Every ten percent increase in broadband penetration is shown on average to deliver a growth in GDP of 1 percent. In developing and emerging markets, broadband penetration has a significant effect on economic growth, with some 80 jobs created for every 1,000 broadband connections. The potential is evident: the challenge is to unlock it for the benefit of the "last billion" users at the base of the pyramid. From increasing GDP growth and boosting livelihoods to enhancing access to education and health, the "last" billion users at the base of the pyramid can benefit enormously from connectivity".
The issue of the Internet and its global growth is colossal and can be seen from a variety of angles and agendas. TBOF does not mean to imply that the sketch above entirely covers the rapidly expanding technology universe, but rather that those who understand its scope are confident that knowledge and reputation play key roles in how we conduct business on the Internet just as they always have in real life.
As Independents we need to be aware of and be proactive at technology's impact on the Film and Television business, while attempting to anticipate the change that lies ahead before it hits us as it did the Music business. Now is the time to go boldly where we have not gone before, with new approaches to how we do business in both buying and selling films. The accessibility of Internet connnectivity and technology offers borderless opportunities and new challenges in Entertainment's Digital Revolution. Acquired knowledge from the past, and actively seeking out knowledge of and in the present, coupled with the ability to adapt is the key.
Sources of research and information courtesy of the following websites:
The European Observatory. Ericsson. Peric Kosta. The Broadband Commission.
Online publication based in India.
The above article also appears in The Business of Film's innovative AFM 2013 Printed QR Reader Magazine & Product Guide launched in 2011 and available during the AFM Market.