Category Archives: Suebee Blog Archive

Learning from Each Other: Digital Media Producers and Traditional TV Producers

I’ve been working on an interesting project lately, looking at the interaction of digital media production companies and the more ‘traditional’ television production companies in Canada. As you may know, the Canada Media Fund (CMF) now requires that any television production that comes to them for funding have an associated digital media component. But this relatively new requirement (only a couple of years old) has not necessarily been a happy or easy one for the traditional TV producers, or for that matter their broadcasters. Digital media producers come from a different space than TV producers and they don’t necessarily speak the same language.

In essence, DM companies are operating under more of a ‘creative agency’ model, where ideas are pitched and the successful agency wins the project and is paid a fee for developing the creative elements. The agency does not retain any IP to these elements. TV production companies work under the traditional ‘production’ model, where projects are pitched to broadcasters and producers are required to carry a good portion of the development costs themselves.  Larger successful production companies allocate their own funds for development while smaller companies often need to rely on funding from agencies etc.  However, in any event, the IP rights stay with the TV producer and are not transferred at any stage to the broadcaster.

By virtue of operating under different models, and given the relative immaturity of the DM industry there is a limited understanding of each other’s revenue models. While the consensus is that the revenue models for digital media are not quite there yet, there is growing evidence of the impact of second screen activity in driving audience engagement and therefore increasing advertising value and TV commerce opportunities. However, paying the costs of developing digital media components is creating stress in the relationship between TV producers and digital media producers, as funding of the digital media component has its own challenges. The CMF will fund part of the costs and the broadcaster is required to contribute 10% of the digital budget, but the remaining balance has to be funded by the TV producer and/or the digital media producer. Some provinces have tax credits to help cover this cost, but not all.

So while Canada may be seen as forward-thinking in driving Canadian-content digital media production, there are still some kinks to be worked out. But this has to be better than being left behind in the exploding digital content world.

Getting Real 5: An Economic Profile of the Canadian Documentary Industry

If you missed it, this week the Documentary Organization of Canada (DOC) released its latest report  on the state of the documentary industry in Canada.  I had the honour to undertake the analysis and write this report for DOC, and you can view or download a copy by clicking on this link.

The sad news is that the documentary industry in Canada is under severe pressure from a number of fronts. The number of documentaries being commissioned by broadcasters in Canada has declined significantly and the job loss is the industry is staggering at 4000 jobs lost over the past few years. Additionally, documentary funding programs such as the Canadian Independent Film & Video Fund (CIFVF) are no longer in business, reducing the potential for producers to finance documentaries that are not destined for the broadcast market.

The report notes that Canadian conventional private sector TV networks have reduced or eliminated the number of documentary one-offs (single programs) they’ve been airing over the last several years. At the same time, Canadian specialty cable channels have been increasing the number of ‘documentary’ series that they have been broadcasting, but I put this word in quotes for a reason. Much of this content is more reality-style programming, or what the Canada Media Fund (CMF) calls “living history” or “docu-soap” types of programs.  Both of which the CMF will fund.

The Canadian documentary production industry is greatly concerned about these two CMF exceptions that allow this ‘factual entertainment’ to be considered within the CMF’s documentary allocation and thus the dilution of the definition of ‘documentary’. Documentaries, under the CMF’s definition, are to provide an “in-depth analysis” on a topic and according to documentary producers these allowable exceptions are diverting funding from ‘true’ documentary one-offs and series in favour of factual entertainment.

Canada has a long and storied history of producing world-class documentaries and to witness this sector in serious decline is very disturbing. But from the broadcaster perspective, documentary one-offs do not generate sufficient audience numbers and factual entertainment series do. Broadcasters are in the audience business after all.

Interestingly enough, at the same time documentary festivals, such as the annual Hot Docs festival in Toronto each spring, are drawing record crowds. And international interest in documentaries, especially feature-length documentaries, is still out there.

So what’s a documentary producer in Canada to do these days? Well, either make a shift to factual entertainment programming of interest to broadcasters and try to fund the odd ‘true’ documentary every few years, or get out of the business here.  Hence perhaps, the job loss in the industry. Alternatively, with the arrival of Kickstarter in Canada this fall, alternate methods of raising financing might relieve some of the funding hardship. Documentaries are a popular type of project within these crowdfunding models. However, the amount of funding possible under these models is relatively small in comparison to the project’s overall budget, and the amount of work required to mount and maintain a Kickstarter type of funding initiative is quite intense. Plus in Canada there are still some securities regulation issues to overcome.

The CMF is launching its latest round of industry consultations in September and no doubt the Canadian documentary production industry will have something to say on these issues…

The CMF, Digital Media and Transmedia

The Canada Media Fund (CMF) requires Canadian production companies to incorporate a digital media strategy as part of their project’s production plan.  Since the CMF is the single largest funder of Canadian television production (more than $300 million in funding per year), it can force the issue. In fact this requirement is part of the directive from the federal government that provides a chunk of the CMF’s financing.

So what is digital media? Digital media is content that may be designed for a number of platforms, such as websites, viral videos, interactive on-line games (through websites), social games (through apps such as Facebook), augmented reality games (ARGs) or mobile applications (for smart phones or tablets/iPads). Digital content can be promoted and expanded through the use of social media, such as Twitter, Facebook, YouTube, Flickr, Pinterest, etc.

Digital media strategies are designed to engage a user/fan/audience in storytelling from another platform, such as television series or movies. The approach requires planning to determine the intended audience of the digital strategy and the best use of digital media, including websites and social media. In Canada this has required the tech industry, the digital media industry and the traditional media companies to come together. Digital media strategies by their very nature require an understanding of technology to deliver content, of digital media to create the right kinds of content for digital platforms, and simple old-fashioned story-telling experience.

One thing I’ve learned is that there is a difference between transmedia and cross-platform storytelling. Transmedia builds a multi-dimensional experience with diverse content strands for users, while a cross-platform strategy generally uses multiple platforms to tell one story, similar to websites promoting a television series. A transmedia approach will engage the user in the broader story telling experience, while cross-platform storytelling is more often used as an approach to branding a particular product or program.

In his book Convergence Culture, Henry Jenkins describes transmedia as storytelling across multiple forms of media, with each element making distinctive contributions to a fan’s understanding of the story world. By using different media formats, transmedia creates “entrypoints” through which consumers can become immersed in a story world.

Transmedia storyteller Jeff Gomez of Starlight Runner Entertainment defines it as “the art of conveying messages, themes or storylines to mass audiences through the artful and well planned use of multiple media platforms.”  If you want to see stunning examples of transmedia storytelling check out Starlight Runner’s website for films such as Avatar.  The first time I heard Jeff Gomez speak, I was awe-struck and enchanted by the various worlds he was creating through multiple platforms but connected across the platforms. It changed the way I looked at digital media.

In Canada we are still struggling to find ways to monetize digital media projects, particularly given the requirement by the CMF that all television projects funded by the organization have a robust digital media component.  But this forced marriage between traditional media producers and digital media producers is at least bringing these two separate groups together in a common purpose.  Without this drive, we risk being left behind the rest of the world in digital content creation and innovation.

Creative Economy and Cultural Policy

“There is no greater resource than the creativity, innovativeness, and productive talents of our people.”[i]

Subsequent to publishing our report, From the Margins to the Mainstream: Moving BC’s Creative Industries Forward (April 2012), I’ve been asked about the creative economy approach to cultural policy, so here’s a brief overview.  Creative economy is a relatively new approach that has emerged out of the shift to a knowledge-based economy over the past few decades.  Domestic and international research has increasingly documented an understanding of the relationship between creativity, culture and economics, forming the basis for the concept of the “creative economy”.  According to UNCTAD’s 2010 Creative Economy report, creative economy entails a shift from conventional economic and cultural policy approaches towards a multi-disciplinary model dealing with the interaction between economics, culture and technology, and centered on the predominance of services and creative content.[ii]

UNCTAD underscores that at the heart of the creative economy are the creative industries, which constitute a wide and diverse field of creative activities ranging from publishing, music and performing arts, film and television production, digital media and design.

A broadly accepted definition is one put forward by the UK government, which refers to the creative industries as “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”.[iii]

Creative Industries as Economic Drivers

‘The impacts of the creative economy emanate from the creative core and ripple through culture industries, and other creative industries, into the wider economy”.[iv]

Much of the research and literature strongly supports the belief that creative industries provide a breeding ground for creativity and innovation in the larger economy, and are critical to driving job creation for a digital future that relies more on creativity than physical labour.[v] Yet this is difficult to document by means of quantifiable measurements.

Numerous studies have therefore turned to documenting the degree to which creative industries provide significant contributions to the economic measurements of Gross Domestic Product (GDP), employment and exports. There are some difficulties in capturing all the elements of the creative economy.  The creative sector is comprised of a variety of activities and overlaps several different industries and therefore, measurements contain a significant degree of estimation.  However, there is a general consensus in the research that these measurements likely underestimate the full impact of the creative industries on the economy overall.[vi]

Creative Industries and Cultural Industries

“Today’s culture sector is centre stage in the creative economy. Its contributions are valuable on their own and also add significant value by stimulating more broadly based creative activity across the economy.”[vii]

Within the creative industries is the sub-set of the more traditionally defined cultural industries.  Cultural industries such as domestic film, television, music, publishing and digital media companies are the target of various funding initiatives at the federal and provincial levels, but there is no overall cross-sectoral approach to support these industries.  Cultural policy in Canada operates in a silo, which a creative economy approach seeks to challenge as we move increasingly into the digital age.

Some of the challenges for the creative industries include the growing role of intellectual property rights as a tool with which to generate earnings.[viii] In order to enhance the creative sector’s value chain, intellectual property rights need to be retained from development (or creation) through distribution.  In addition, copyright is fundamental to the business models supporting arts and cultural enterprise, and needs to be protected. In the creative industries, the right to use a product is the value—not the physical package that contains the content.”[ix]

Creative Industries and Technology

It is not technology alone that triggers demand for creative content; it is also the interplay between creative consumers and services providers that brings new creative demand to the surface and new opportunities for creative supply responses to meet that demand.[x]

Growth in demand for creative products has been a significant driver of the creative economy.  Several factors have contributed to this, including rising real incomes, lower costs of consumption as technology advances, and new generations of consumers using these technologies in ways that transform them from passive recipients into active co-creators of cultural content.[xi]

The internet and mobile applications have enabled consumers to exchange information and produce and co-create content.  These technologies have facilitated a rapid increase in user-led content, blurring the distinction between producers and consumers.  The central message is that producers and consumers co-drive the creative economy.  As a result, this is driving traditional creative producers to develop new business models and find new approaches to monetizing creative products.[xii]

Creative Economy and Cultural Policy

As noted in UNCTAD’s reports, creative economy is a multi-dimensional concept that cuts across a number of different sectors in the overall economy, such as economic development, urban planning, trade, labour, domestic and foreign investment, technology, tourism and education.  It is this cross-cutting nature that complicates matters for policy makers in recognizing the contribution of creative industries and targeting support.

Part of the difficulty, according to UNCTAD, lies in the multi-faceted nature of the creative industries, in that they can overlap and form part of several different industries, making it difficult to develop a comprehensive measurement of the impact of the creative sector on a broad scale.  Creative industries provide a breeding ground for creativity and innovation in the larger economy and are critical to driving job creation for a technology-driven future, yet this contribution is difficult to demonstrate.

New forms of measurement and a recognition of the role of the cultural industries in the creative economy is a necessary concept for Canadian policy to embrace, and not just from a cultural policy perspective but from a multi-departmental approach.

[iii] UK Department for Culture, Media and Sports, Creative Britain, 2008.

[iv] Martin Prosperity Institute, 2009.

[v] UNCTAD, 2010.

[vi] Conference Board, Cultural Industries in Canada, p. 15

[vii] Martin Prosperity Institute.

[viii] Conference Board, p. 9.

[ix] IBID, p. 69.

[x] Martin Prosperity Institute.

[xi] UNCTAD, p. 23

[xii] UNCTAD, p. 27

Overview of BC’s Creative Industries

BC’s creative industries have unique characteristics, as detailed in the recent report From the Margins to the Mainstream: Moving BC’s Creative Industries Forward (April 2012). This report examined the domestic film, television, digital media, music, book publishing and magazine industries in BC and below are some of the highlights.

As noted in UNCTAD’s Creative Economy reports (2008 and 2010), creative economy is a multi-dimensional concept that cuts across a number of different sectors in the overall economy, such as economic development, urban planning, trade, labour, domestic and foreign investment, technology, tourism and education.  It is this cross-cutting nature that complicates matters for policy makers in recognizing the contribution of creative industries and targeting support. Part of the difficulty lies in the multi-faceted nature of the creative industries, in that they can overlap and form part of several different industries, making it difficult to develop a comprehensive measurement of the impact of the creative sector on a broad scale.  Creative industries provide a breeding ground for creativity and innovation in the larger economy and are critical to driving job creation for a technology-driven future, yet this contribution is difficult to demonstrate. British Columbia has the strengths to capitalize on the global shift to the creative economy given its many assets, including a vibrant traditional cultural sector and our innovative and thriving digital media companies.

According to PricewaterhouseCoopers (PwC), BC’s creative sector experienced a steady 3% annual real GDP growth from 2002 to 2007, outpacing many of BC’s other major sectors, including agriculture, forestry, fishing and hunting combined.  By 2007, the creative sector GDP was $4 billion, contributing a comparable share of provincial GDP as the major sectors.  Additionally, employment in the creative sector grew to represent almost 4% of the provincial workforce, higher than the combined employment in agriculture, forestry, fishing and hunting. BC’s creative industries have developed over time due to a number of critical factors, including government policies supporting the development of these industries, the entrepreneurial spirit and business talents of individuals and companies in these sectors, and the appeal of British Columbia as a location for major international companies. There has been huge private sector investment in infrastructure, most notably in the film and television production sector.  It is estimated that capital investment made by the film and television industry in BC, including studio infrastructure, production services equipment, post-production facilities, exceeds $1 billion.

The creative industries in BC have developed a number of distinguishing characteristics.  The sectors are younger than in other established areas of Canada, such as Ontario, and there are few head offices of major companies, Canadian or foreign, in British Columbia.  As a result, most companies operating in the creative sector are small-and-medium enterprises (SMEs) and have had to develop cross-sectoral expertise in order to survive.  Being outside the centre has promoted more nimble and flexible creative producers that embody the entrepreneurial spirit, one of the cornerstones of innovation.

These unique characteristics are at the heart of developing new and effective industrial support mechanisms for these sectors in BC.  The agencies behind the Creative Industries Report continue to work with the provincial government to recognize the contributions of the creative industries and to work together to develop their potential as an important contributor to BC’s economic future.